In Part One and Part Two of this series, we covered why alternative proteins (APs) deserve more support given their potential to keep climate goals within reach and their co-benefits for people and the planet. This article will explore why government support for APs must increase if we want to capture their climate and other benefits, as well as, the practical steps required for international cooperation to increase.
The Need for Public Investment in R&D and Commercialization
APs are unlikely to realize their full potential without significant further investment in R&D and commercialization. A report commissioned by ClimateWorks Foundation and the UK Foreign, Commonwealth, and Development Office in 2021 estimated that unlocking the full potential of APs would require public spending on R&D and commercialization to increase to $4.4 billion and $5.7 billion per year, respectively. At present nowhere near this amount goes to APs: in 2023, funding from governments came to just $523 million (see figure below).
Data from the Good Food Institute
Investment is needed for two reasons: taste and cost. Multiple lines of evidence suggest that, once APs can compete effectively on taste and cost with conventional animal meat, consumers will choose AP products over conventional alternatives at high enough rates to achieve meaningful reductions in emissions and other environmental problems. At present, however, conventional animal products are outcompeting APs on both fronts. Dissatisfaction with the taste and texture of these products is the main reason consumers decide not to buy them again after trying AP products. The products that best satisfy consumers—Impossible Burger products—currently cost about twice as much as conventional ground beef.
These issues cannot be resolved without sufficient investments in R&D and commercialization. Once they are, demand will increase and production will ramp up accordingly, inaugurating a virtuous cycle in which learning-by-doing and economies of scale unlock further improvements in taste and declines in cost that, in turn, lead to higher demand.
Why Public Investment is Crucial for Alternative Proteins
There is an important role for private investment to play here, but public funding is essential for two reasons.
First, because private investors do not typically account for the many positive externalities of APs (including emission and pollution reductions, improved biodiversity outcomes, and reduced antimicrobial resistance and pandemic risk), private spending on RD&D and commercialization is expected to be below the optimal level.
Second, because private investors want a return on their investments, they are unlikely to fund R&D and commercialization efforts when the fruits of these efforts can be disseminated freely. Instead, they will insist that recipients closely guard intellectual property to maximize profits.
As a result, if the lion’s share of AP investment comes from private sources, there is likely to be significant duplication of effort, slowing the industry’s progress toward price and taste parity. If, by contrast, significant funds were to come from public investors who wish to speed progress toward global environmental and development goals and do not favor any one company, there would be far less duplication of effort, and the field as a whole would progress more quickly.
In addition, the outcomes of investment will be more equitable, since a freer flow of information will enable a much more diverse group of producers to enter the market and make it more likely both that production will be geographically dispersed and that products will cater to a broader group of dietary preferences.
Though the amount of funds required for APs to succeed is not insignificant, it is considerably less than the subsidies that governments provide to the agricultural sector now. In addition, this level of public funding is a tiny fraction of the support governments are currently providing to other, more well-understood climate solutions, such as renewable energy and electric vehicles.
Key Policy Measures to Support Alternative Proteins
Government support could take the following forms, among others:
▪️Dedicated funding for open-access research and development
▪️Loan guarantees
▪️Advance market commitments for alternative protein products based on quality and cost targets
▪️Expanding agricultural support programs to provide more resources for alternative protein inputs
▪️Tax incentives for alternative protein companies
▪️Workforce development programs
▪️Funding for demonstration projects
In addition, governments could collaborate to create export markets for alternative proteins. These efforts would complement efforts to increase domestic production of APs by increasing demand for domestic products abroad.
Countries could also consider a variety of other measures to advance AP innovation. The following are only some of the many possibilities:
✅ Make a joint, non-binding commitment to increase global public funding for alternative protein innovation to $10.1 billion per year ($4.4 billion for R&D and $5.7 billion for commercialization).
✅ Commit to embedding alternative proteins in national climate change implementation plans (NDCs, or Nationally Determined Contributions), including in food innovation and agriculture-related climate adaptation and mitigation strategies.
✅ Create a diplomatic forum for intergovernmental dialogue on advancing alternative proteins.
✅ Develop bilateral and plurilateral programs on alternative proteins via diplomatic or foreign assistance channels.
✅ Countries should sign on to and commit to meeting priority international actions developed collaboratively by country signatories to the Agriculture Breakthrough and informed by the Breakthrough Agenda Report 2022.
International cooperation to support Alternative Proteins is necessary for world leaders to address several global challenges. We’ve covered the opportunity that APs provide society for addressing climate change emissions within food systems in Part 1 of this series, and the non-climate benefits for the environment, human health and food security, and the economy in Part 2. Looking ahead we endeavor to bring more global leaders to follow through on the AP opportunity with the steps presented in this article.
If you’re interested in learning more about the opportunities APs provide or wish to collaborate on bringing them to fruition reach out to our Food & Agriculture experts: Joshua McBee and Mumukshu Patel.
