Food System Shock: The insurance impacts of acute disruption to global food security
This is a report produced by Lloyds based on a scenario exercise to investigate the consequences of a climate change extreme event. In this case, the event is a warm El Nino phase leading to reductions in key crops and the impact on global food prices and subsequent consequences based on political economic responses.
This is a scenario development exercise applied at the global scale, but considering key national level consequences and responses.
To investigate the possible consequences of global scale disruption to the food system caused by climate change.
The study is global in coverage, with the inclussion of specific impacts nad consequences in many countries.
This is a scenario exercise so does not use a specific model, but builds upon the work of IFPRI, AgMIP and other organisations and modelling initiatives.
The scenarios were developed based on expert opinion, with input from the Global Resource Observatory project based at Anglia Ruskin University, and the IMPACT model developed by IFPRI.
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The magnitude of the shock for each commodity is based on de-trended FAO data from 1961 to 2013.
There is uncertainty in the accuracy of global food stock data.
The report is produced by Trevor Maynard, Head of Exposure Management at Lloyds.
The scenarios were prepared by a research team led by Aled Jones and Molly Jahn with significant contribution from Tobias Lunt. Assistance was provided by David LeZaks, William Mulhern and Carol Barford.
Expert consultation and review were provided by Stephen Baenziger, Catherine Cameron, Corey Cherr, Nancy DeVore, Kenneth Donaldson, Joshua Elliott, Charles Godfray, Maryam Golnaraghi, Jonathan Hellin, Marc Levy, Tom Lumpkin, Niall Moten,
Michael Obersteiner, Sherman Robinson, David Robson, Mark Rosegrant, J. Shukla, Jerry Skees, Keith Wiebe, Don Wuebbles, the International Food Policy Research Institute’s Global Futures and Strategic Foresight Program for IMPACT model runs, members of the UK/US Task Force on Resilience of the Global Food Supply Chain to Extreme Events supported by the UK Foreign and Commonwealth Office, and the Knowledge Systems for Sustainability Collaborative’s Multiple Breadbasket Failure Initiative.
Results
The following are extracts from the Lloyds report:
- The ability of the global food system to achieve food security is under significant pressure.
- There is a pressing need to reduce the uncertainty surrounding the impacts of an extreme shock to the food supply.
- Lloyd’s commissioned the development of a scenario of extreme shock to global food production in order to explore the implications for insurance and risk.
- The systemic production shock to the world’s staple food crops described in the scenario generates widespread economic, political and social impacts.
- The insurance industry is in a position to make an important contribution to improving the resilience and sustainability of the global food system.
- Scenarios are an important method of exploring emerging risks; they are not predictions or forecasts.
Discussion
A key conclusion is the recognition of the knock-on consequences of an extreme climatic event on the food system and its subsequent impact on a wide range of economic and political activities.
More accurate data on food stocks etc.
Parameter values
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Discussion
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