Like Water for Chocolate
Valentine’s day, and yet another excuse to apply economics to daily life – yes you guessed it, a book called “Spousonomics“.
But despite my love of all-things-economics, this year I decided to gorge instead on a lovely box of chocolates, which my loving husband kindly gave me.
As I worked my way through the box, I wondered whether I would have felt less guilty if they had been these “Climate Change Chocolate Bars” that give you tips for reducing your carbon footprint and promise to offset your daily carbon emissions at the same time. Even then, I wouldn’t have really been sure that I was having a positive impact, as the relationship between chocolate and climate change is actually quite complex.
Chocolate consumption clearly has broad positive impacts for many countries. Cote D’Ivoire, Ghana, Indonesia, Cameroon and Nigeria are the world’s top cocoa producers, so they derive a great deal of their growth and employment from chocolate.
In Ghana, cocoa accounts for over 20% of export earnings and over 5% of gross domestic product (GDP). In Cote D’Ivoire, cocoa bean exports provided US $1bn of revenue, second only to oil and gas revenues (US$1.3bn combined). That’s about 15% of total GDP, 20% of tax revenue and 35% of exports. The industry employs 700,000 households and supports six million people.
But a 2005 report (Anim-Kwapong et al) suggested that unabated climate change – even to just a two degree rise – could lead to serious problems for the Ghanaian industry. Climate change could reduce rainfall while also exposing cocoa trees to more hours of sunshine, a combination that could also accelerate the development of pests and diseases. In turn (though the authors didn’t point this out), this could lead to an unintended increase in carbon emissions. Why? Because it tends to be more lucrative to cut down old, virgin forest to plant new cocoa trees rather than replant on old ground – quite a vicious circle…
Of course, there are strategies that could be implemented that will increase the resilience of Ghana’s cocoa sector to these changes. Better weather information, more research into drought-resistant crops, better shading of trees, and so on. The 2005 report I mentioned above makes many such recommendations, and they are clearly worth investing in to save growth and jobs.
But there is a bigger question here: whether Ghana, and other cocoa producers should begin to plan for alternative markets and sources of growth, and employment that might not suffer so badly from climate change.
On the other hand, neighbouring Nigeria is seeing cocoa production as a way to make its economy more resilient. Just last year the country’s president established a new inter-ministerial committee to examine how to increase the proportion of GDP from cocoa and increase domestic consumption of chocolate. Through cocoa, Nigeria wants to move away from its heavy dependence on oil – which continues to account for over 90% of its foreign exchange earnings. This seems a sensible strategy even in the face of climate change. Another recent report has suggested that climate change may have a positive effect on cocoa’s prospects in Nigeria.
The fact is, each country will have very different climatic impacts and therefore very different growth strategies, and rightly so. But if research into low-carbon and climate-resilient options in such countries is going to have any impact, it needs to make sure it asks the big bubbling, under-the-surface questions, even when it comes to chocolate… Now where is that box?