Studies show that renewable energy sources increase food prices

As countries including Aotearoa New Zealand transition to renewable energy production, a recent study sheds light on some of the overlooked impacts of this transition.

While the benefits of renewable energy are widely known, scientists are also investigating the lesser-discussed economic and social impacts of switching to “green” energy.

A study published in SSRN shows that the shift to renewable energy sources such as solar and wind power has led to rising food prices and falling agricultural production.

“Our findings show that the energy transition is not a neutral process and has serious consequences,” says Professor Emilson Silva, director of the University of Auckland Energy Centre and co-author of the study.

“It has a direct impact on people’s lives.”

Professor Silva and co-author Dr Luccas Attílio of the Federal University of Ouro Preto in Brazil analysed data from 32 OECD countries, including New Zealand, from 2000 to 2021.

Research shows that countries that have more advanced their use of renewable energy face more severe consequences, such as higher food prices and greater constraints on agricultural production, compared to countries that are slower to adopt renewable energy sources.

“This evidence points to a critical challenge,” says Dr. Silva. “As the push for renewable energy intensifies, so does the pressure on vulnerable populations who bear the brunt of rising food costs.”

Dr Silva and Dr Attílio say governments need to consider income support programmes and take a more differentiated approach to the energy transition.

“While going green is essential to mitigating climate change, it must be balanced with strategies to protect those affected,” says Dr Silva.

The research, detailed in the paper ‘Is the energy transition affecting food prices and agricultural production?’, was inspired by Professor Silva’s observations of recent farmer protests in Australia and elsewhere over higher production costs linked to climate policies and increased renewable energy production.

“Some farmers were struggling with rising labor costs and the hassle of converting their land to solar and wind, so I wanted to look at the data to see what the impact of using renewable energy sources was actually.”