Value chain risk and biodiversity loss
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THE WORLD’S RELIANCE ON IMPORTS – THE EXAMPLE OF RICE PRODUCTION IN MEKONG DELTA Large parts of the world do not have self-sufficiency in their food production 112 and some of the world’s largest economies rely heavily on food imports to feed their populations. 113 Nearly all cropland areas brought into production from 1986 to 2009 were used to grow export crops, 114 and by 2050 more than half of the world’s population could be fully reliant on food imports. 115 The world’s population is expected to increase by two billion persons over the next 30 years, from 7.9 billion today to 9.7 billion in 2050. 116 This increase in global population will require increased food production, putting further pressure on biodiversity and interconnected value chains. The rice paddy fields of the Mekong Delta are man-made wetlands, 117 which produce 90% of Vietnam’s rice, the world’s third largest rice exporter. 118 The condition of the rice paddies have been negatively affected by salinity intrusion caused by climate change. 119 In 2020, amidst the Covid-19 pandemic, the Vietnamese government estimated 460,000 metric tons of rice production was lost due to an increase in salinity. 120 Given the global reliance on the Mekong Delta for rice, a staple food for numerous countries, this is an acute example of the threat to global food security caused by environmental factors transmitted through value chains.
THE FIVE THREATS TO BIODIVERSITY
Land and Sea use change
Pollution
Species overexploitation
Climate Change
Invasive species and disease
Make the environment unsuitable for survival directly and indirectly.
Forcing the animal to shift range or confounding the signals that trigger seasonal events and more.
Example: Agricultural land use which is responsible for 80% of the global deforestation, including habitat loss and degradation.
Example: Overfishing, which may decimate global fish populations by 2050.
Compete with native species for space, food and other resources; sometimes spread disease that native species have no immunity of.
Source: The Living Planet Report 2020
The drivers of biodiversity loss
While value chains impact biodiversity, they are also at risk. The cross-border and hyperconnected nature of global value chains can act as a multiplier of biodiversity risk – translating disturbances and shocks from one company or region into disruptions in other parts of the value chain in other regions. The link between biodiversity and economic output is most obvious in the construction, agriculture, and food and beverages sectors, where a combined USD 7.9 billion of gross value added (GVA) is directly dependent on nature. 110
In other industries such as chemicals and materials, aviation, travel and tourism, mining and metals, and real estate, the GVA directly dependent on nature represents only 15%, yet more than 50% of the GVA of their supply chains is highly or moderately dependent on nature. 111 This hidden dependency means that value chains are a primary determining factor in many industries’ exposure to biodiversity risk.
112 Graham K. MacDonald, Eating on an interconnected planet, Environmental Research Letters, 2013. 113 Lanessa Cago, Countries Most Dependent on Others for Food,World Atlas, 5 December 2017. 114 Thomas Kastner et al, Rapid growth in agricultural trade: Effects on global area efficiency and the role of management, Environmental Research Letters, 20 March 2014. 115 Graham K. MacDonald, Eating on an interconnected planet, Environmental Research Letters, 2013. 116 World Population Prospects 2019, United Nations Department of Economic and Social Affairs, Population Division, 2019. 117 Phil Carter, The Ramsar Convention and Japan’s rice-paddy ecosystems, The Ecologist, 6 July 2020. 118 Robert Akam and Guillaume Gruere, Rice and risks in the Mekong Delta, OECD, June 2018. 119 Nguyen Huu Quyen et al., Impact of climate change on future rice production in the Mekong River Delta, CCAFS, October 2018. 120 Salty land turns productive in the Mekong, ACIAR, 26 March 2021.
110 Celine Herweijer et al., Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy,World Economic Forum, January 2020.
111 Ibid.
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