Exploring Environmental Tradeoffs in Soft Commodity Production Jen Bowe, Kenny Fahey, Mallory McLaughlin, Julia Ruedig, Sheena VanLeuven, Jay Wolfgram March 2013-April 2014 Modeling Environmental Tradeoffs in Soft Commodity Production 1 TABLE OF CONTENTS Introduction ..................................................................................................................................... 5 Transforming Markets: The 2050 Criteria .................................................................................. 5 Beyond The 2050 Criteria: Sustainable Sourcing....................................................................... 6 Commodity Sourcing and Environmental Tradeoffs .................................................................. 7 Project Goals and Objectives .......................................................................................................... 9 Research Methodology ................................................................................................................. 11 Research Sources....................................................................................................................... 11 Commodity Research ................................................................................................................ 12 Environmental Indicators .......................................................................................................... 13 Dimensions of Environmental Tradeoffs .................................................................................. 14 Note on Social Impacts in Soft Commodity Sourcing .............................................................. 15 Interviews .................................................................................................................................. 16 Modeling Tradeoffs: Environmental Input-Output Analysis .................................................... 17 Section 1: Current Business Practices in Environmental Impact Tradeoffs Analysis .................. 18 Existing Business Frameworks for Environmental Impact Analysis ........................................ 18 Limitations of Existing Tools .................................................................................................... 21 Interviews with Corporate Decision-Makers ............................................................................ 25 Framing the questions: How should decision-makers approach tradeoffs? .............................. 27 Section 2: Research Findings ........................................................................................................ 30 Commodity Categories: Findings from Research ..................................................................... 30 Fiber (Apparel and Textile Use)................................................................................................ 30 Production .............................................................................................................................. 30 Market .................................................................................................................................... 31 Environmental Impact ........................................................................................................... 32 Standards or Certifications .................................................................................................... 33 Fiber (Timber, Pulp, and Paper Use) ........................................................................................ 33 Production .............................................................................................................................. 34 Market .................................................................................................................................... 34 Environmental Impact ........................................................................................................... 35 Modeling Environmental Tradeoffs in Soft Commodity Production 2 Standards or Certifications .................................................................................................... 36 Grains (Human Consumption and Animal Feed) ...................................................................... 37 Production .............................................................................................................................. 37 Market .................................................................................................................................... 38 Environmental Impact ........................................................................................................... 38 Standards or Certifications .................................................................................................... 39 Oilseeds ..................................................................................................................................... 40 Production .............................................................................................................................. 41 Market .................................................................................................................................... 41 Environmental Impact ........................................................................................................... 42 Standards or Certifications .................................................................................................... 42 Biofuels ..................................................................................................................................... 43 Production .............................................................................................................................. 43 Market .................................................................................................................................... 43 Environmental Impact ........................................................................................................... 44 Standards or Certifications .................................................................................................... 44 Terrestrial Protein ...................................................................................................................... 45 Production .............................................................................................................................. 45 Market .................................................................................................................................... 46 Environmental Impact ........................................................................................................... 47 Standards or Certifications .................................................................................................... 48 Aquatic Protein .......................................................................................................................... 49 Production .............................................................................................................................. 49 Aquaculture ............................................................................................................................... 49 Wild caught ............................................................................................................................... 50 Market .................................................................................................................................... 51 Environmental Impact ........................................................................................................... 52 Standards or Certifications .................................................................................................... 52 Section 3: Business Applications .................................................................................................. 54 Applying Commodity Research to Business Scenarios ............................................................ 54 Scenario: Commodity Tradeoffs in Oilseed Sourcing .............................................................. 55 Modeling Environmental Tradeoffs in Soft Commodity Production 3 Environmental Impacts .......................................................................................................... 56 Conclusions ........................................................................................................................... 59 Scenario: Commodity Tradeoffs in cellulosic biofuels ............................................................. 60 Environmental Impacts .......................................................................................................... 61 Conclusion ............................................................................................................................. 62 Scenario: Mitigating Freshwater Scarcity through Commodity Tradeofs in grain sourcing .... 64 Environmental Impacts .......................................................................................................... 64 Conclusion ............................................................................................................................. 66 Scenario: Production Methods in Beef Sourcing ...................................................................... 67 Environmental Impacts .........................................................................................................