20th July 2011
This failure has been driven by the lack of the USA's ability to deliver a legally binding emissions cut, and has prompted key developing countries to hold back from strengthening their voluntary commitments in the absence of any legally binding targets on the developed world.
The International Environment Agency has reported that the chances of preventing a 2oC warming by the end of the century is highly unlikely.
Agriculture and the interplay with climate change
Schroders, which runs the global climate change equity fund, is publishing a special report into agriculture and the interplay with climate change – and recognises this as a key investment theme.
Simon Webber, fund manager of Schroder ISF Global Climate Change Equity, says: "Demand for agricultural produce will continue to increase due to the increasing global population, as well as the impact of increasing economic growth (improved diets).
"With the majority of population growth occurring in the developing world, where much of the global economic growth is expected to come from, this will result in a significant change in dietary demand. It is estimated that between 2001 and 2014 the global population will increase by 16% which will require a 30% increase in grain yields to support this. Compare this with the figures from 1989-2001, where population increased 19% and grain yields increased 11%, and the impact of the growing economies of the developing world become clear.
"While demand is increasing, available productive land is in decline, yield growth is reducing and there is a growing competition from the biofuel industry for feedstock.
"Then there is the issue of global climate change and mankind's need to mitigate it and adapt to it.
Agricultural production (excluding forestry) accounts for 14% of global emissions (if deforestation is included then the figure rises to 31%), and so as efforts increase to reduce global emissions we expect to see the agricultural production sector having to play its part (there are already some examples of climate change legislation impacting the sector). In addition, the sector will have to adapt to the impacts of a changing climate, which will impact growing patterns, rainfalls and disease vectors, for example. Climate change therefore presents risks and opportunities to the sector, and the Schroders' Global Climate Change fund aims to invest in those stocks that are clearly aligned with the opportunities."
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