Greenflation and Agribusiness in Italy: how to ensure a sustainable future in a conscious, socially inclusive and fair manner
The ecological transition, i.e. the abandonment of coal as a source of energy production and the gradual replacement of all fossil fuels with renewable sources, cannot be considered without its criticalities. professionals and companies.
The recent surge in gas prices, partly as a consequence of environmental policies, has led to a sharp rise in energy prices with inflationary consequences.
A trend that has affected many European countries, including Italy, where the Government, to curb high energy bills, has put in place contingent and structural strategies, also requested by Confindustria, to prevent increases linked to sustainability from impacting families and businesses.
The phenomenon called Greenflation – the green inflation generated, precisely, by the ecological transition – has highlighted the problem of benefits and costs related to the fight against climate change: an unavoidable challenge that the global economic system will be called to face in the coming decades.
The ecological transition has long since entered the economic agendas of developed countries. Even the German economist Isabel Schnabel, a member of the board of the European Central Bank, has stressed the importance of adopting appropriate fiscal policies shortly to counteract the undesirable effects so that it is socially acceptable to all.
A just ecological transition
The economic costs of the green transition require, in fact, collective solutions, coordinated and inserted in a global context: otherwise, the action of a single state would have little value. To prevent and limit the costs, we have been talking for some time about a just transition, a concept already present since 2015 in the Paris Agreement to underline the importance of integrating, within climate policies, actions aimed at minimizing the negative impacts on citizens and employment policies.
The debate ignites, therefore, the political and economic sphere on a global scale and we wanted to listen to the opinion of Professor Raffaele Maria Maiorano, Professor and Director of the Online Master in Agribusiness Management of Rome Business School who said:
“The ecological transition is a global issue that needs strict planning as far-sighted and consistent with economic activities. The world is living in this moment a sort of paradox: on the one hand, we are trying to quickly reach a sustainable development – as foreseen also by the European Union with the Green Deal – on the other hand, the high costs sustained by final consumers and by the various economic chains could slow down the process itself.”
According to the latest report of the IPCC, the Intergovernmental Panel on Climate Change, it is necessary and urgent to make drastic cuts in greenhouse gas emissions, with a consequent shift from fossil fuels to renewable sources of energy. The same call for immediate action to combat climate change, which took place last November at the end of the COP26 in Glasgow, seems to have been once again ignored, precisely because of the high economic costs that would fall in various ways on the community.
The rising cost of essential minerals for the transition
From a long-term perspective, it is foreseeable to imagine a further increase in the price of some raw materials such as lithium, silicon, aluminium and copper, all minerals essential for the tools for the transition: such as for electric cars and photovoltaic panels.
“The conscious, effective and efficient transition must come from the top with a Top-Down effect – Maiorano points out – with the adoption of synergic policies at inter-state level, but it must also be Botton Up because the companies that are asked to change their processes and the way of doing business must see an economic advantage. Companies must understand where they fit within a larger system and must be able to recreate a complex system with a different paradigm that takes into account the needs of individual players. Only in this way will the transition have a positive impact from an economic, environmental and social point of view. Only then can it be considered inclusive.”
The agribusiness sector is also strongly influenced by the energy transition. The transformation of food systems is crucial for the achievement of all sustainable development goals. Organic production contributes to the preservation of the planet and biodiversity but is characterised by lower levels of production per unit area. Lower production corresponds to an increase in raw materials that have an important impact at all stages and activities involved in the production, processing and distribution of food.
“Without support capable of compensating for the decreases in production, inflation is generated, which inevitably falls on the consumer”, says Maiorano.
Professor Maiorano, in the book Sdg 4 Business, written in collaboration with Professor Alessandra De Senen and Professor Roberto Reali, reiterates the importance of the Botton Up model, also for the agricultural sector, which indicates the possible path to sustainability with explicit reference to the SDGs (Sustainable Development Goals) established by the UN.
“The agri-food sector, which is often mistakenly considered secondary, must be given greater attention. In our country, the sector accounts for almost 18% of GDP (Gross Domestic Product) and is one of the most important drivers of the Italian economy. The average European spends between 11% and 14% of their monthly income on food, in contrast to developing countries where people spend up to 50% of their income. Creating such strong imbalances between geographical areas is ethically unacceptable because it further lowers the standard of living in countries where it is already difficult to survive and where it is becoming increasingly difficult to get food. From this point of view, Europe, with the creation of the European Community and the adoption of the CAP, the Common Agricultural Policy, has been far-sighted because it has allowed its citizens never to have to face a situation of food shortage.”
Research, innovation, training and the creation of networks will therefore be important to enable the transition for a sector that wants to modernise with professionalism and rigour, hoping for a renewed social pact for sustainable and inclusive agriculture.
Raffaele M. Maiorano is an agricultural entrepreneur in Calabria and Marche where he produces Pecorino Crotonese DOP, organic extra virgin olive oil, cereals, vegetables and citrus fruits. He is the national delegate for Sdg’s and sustainable development in Confagricoltura Lecturer in agri-food management at the University of Camerino, he coordinates the master’s degree in Agribusiness Management at the Rome Business School; he assists many innovative start-ups in the agri-food sector. With a degree in economics and finance, he has a background in journalism – working for national newspapers, magazines and parliamentary agencies – and was national president of Confagricoltura Giovani. He was national president of Confagricoltura’s Young People – ANGA for six years, as well as a member of the Advisor Board of Carrefour and interim chairman of Gfar, the Global forum on agricultural research and innovation at FAO.