Blog

Food Labels - Environmental Edition

I had a recent request on Twitter asking for my thoughts on environmental labels for food.  The question seems to be motivated by recent discussions about the USDA and the Dept of Health and Human Services possibly incorporating environmental considerations into the federal dietary guidelines.  As I've previously noted, this move makes me a bit nervous because it entails non-scientific value judgments about how to integrate disparate issues (health and environment) into a single overall recommendation.  But, even as I said there: 

“It isn’t necessarily a bad idea for the government to convey the scientific evidence on the environmental impacts of producing different foods.”

Of course, that still leaves many unanswered questions.  What do we mean by environment?  Just C02, or is it water quality, or deforestation, or what?  Is the label voluntary or mandatory?  How will food companies respond to the label?  What do consumers understand about the label?  And so on.

In principle, it is possible to imagine something like a nutrition facts panel for environmental issues.  However, the two are not as analogous as might first appear.  First, scientists have a pretty good idea how to measure the fat, carb, and protein contents of food, whereas measuring C02 or deforestation impacts is tricky business with a lot of uncertainty.  Moreover, the nutritional content of a processed food is relatively stable regardless of where the raw ingredients came from, which plant or facility was used to manufacture it, how it got to the store, or how you transported and cooked it.  None of this would be true for an environmental label, which would require more more extensive (and more costly) monitoring and tracing, and if it is at all accurate, one could have two Wheaties boxes that are nutritionally equivalent but with very different environmental impacts.  That may be all the more reason to inform consumers, but the point I'm trying to emphasize here is the much higher cost and greater uncertainty in informing about nutrition vs the environment.  

Finally, an perhaps most importantly, nutritional outcomes are, by and large, what we economists would call "private goods."  The nutrient contents of the foods I eat affect me personally and not others (let's put aside Medicare/Medicare, which is another issue I've touched on here, here, here, and here).  In these cases, the effects of a label on my choices, and ultimate welfare consequences are more straightforward.  Let's compare that to environmental labels, which signal attributes associated with public goods and possible externalities, where we suspect there are likely to be problems with coordination, free riding, etc.  I suspect most economists would tend to look toward getting the property rights or the prices right as the "solutions" in these cases rather than looking toward labels (here's a paper I wrote on that issue).

Finally, I'll note there is a long literature in agricultural economics on food labels - focusing on when and under what conditions labels enhance social welfare.  The results of this literature are hard to summarize (meaning the effects are complex).  Here are a few good places to start if you're interested in the topic.

My answer to the question: should food products contain environmental labels?  I don't know.  There are far too many unanswered questions to say anything more precise than that.

Impacts of Dietary Recommendations

Following the government's dietary recommendations may lead to . . . climate change?

New research suggests the following:

“if Americans adopted the recommendations in USDA’s “Dietary Guidelines for Americans, 2010,” while keeping caloric intake constant, diet-related greenhouse gas emissions would increase 12 percent.”

Rather than trying to anticipate the unintended consequences of such recommendations, the study authors want to add another layer on top of the nutritional recommendations

“The take-home message is that health and environmental agendas are not aligned in the current dietary recommendations,” Heller said.

The paper’s findings are especially relevant now because the USDA Dietary Guidelines Advisory Committee is for the first time considering food sustainability within the context of dietary recommendations, he said.”

As I've pointed out before, trying to integrate nutritional and environmental objectives into recommendations involves value judgement that go beyond scientific evidence. Moreover, focusing just on C02 emissions or nutritional composition (as if that's easy to characterize) ignores many other factors.  On a per-acre basis, which crops are the biggest users of pesticides or water? You might be surprised to find out that it is not corn, soybeans, or wheat but rather many fruits and veggies like lemons, strawberries, etc. 

Rather than trying to add layer upon layer to the dietary recommendations, why not respect people's choices?  The price of food reflects the resources used and the demands on those resources.  If the problem is that prices don't fully reflect water use or C02 emissions, then the idea is to think about assigning property rights in a way that that information-aggregating markets help allocate those resources.  But, I suppose it's less fun to let markets allocate resources.  That would take away our power to tell others what to eat.  

Buffalo extermination - environmental catastrophe or savior?

Given my Wall Street Journal article earlier this week, I've received a large number of questions and comment about beef cattle production and the environment.  One comment on the piece in the WSJ made an observation that had never occurred to me.

One of the big concerns with beef production is methane emissions.  Methane is a more potent greenhouse gas than carbon.  Cattle are ruminants, and their digestion produces methane (which is released not from the back-end of the cow as is typically asserted but rather the front-end).  

In any event, it seems a common presumption of many who are worried about this issue is that if we got rid of all the beef cattle in the US (or at least drastically reduced their numbers), that would be a great thing because we could significantly cut greenhouse gas emissions and help curb climate change.

In fact, we did something very much like that in the US in the mid to late 1800s, and it is almost universally considered a tragedy.

According to some environmental groups, there was once more than 20 million bison roaming the Great Plains.  This number may not be far fetched.  According to one academic paper, the bison carrying capacity of the Great Plains in 1860 was estimated between 13.78 to 20.67 million bison.   According to EPA calculations, American bison generate as much or more methane as do beef cattle on a per-head basis (compare table A-184 to A-187).  

In 1990, there were only about 50,000 head of bison in the US.  Today there are less than 200,000.  Thus, there has been a 100 fold reduction in bison numbers since the mid 1800s.

Were these bison causing climate change back in the 1800s?  Is it a great victory for the environment that they were almost eradicated?    

Logically consistency would seem to dictate that we think about the methane emissions of the ~20 million American bison in the 1800s the same way we think about the methane emissions of the ~29 million beef cattle in the US today.   I suspect the total amount of methane emissions from 1860s bison population and 2014 US beef cattle population are roughly similar (according to the EPA, feedlot beef cattle have much lower per-head methane emissions than bison - about half as much).  [addendum: a reader subsequently emailed me and correctly pointed out that, including dairy cattle, there are actually more than 90 million cattle in the US today - a figure roughly 3 to 4 times more than the number of bison existing in the 1800s]

So, bison depopulation - environmental boon or ecological travesty?  Neither?  Both?

A food producing machine

Imagine a biologist on an excursion in the Amazon looking for new plant species.  He comes across a new grass he's never seen, and brings it back home to his lab in the U.S.  He finds that the grass grows exceedingly well in greenhouses with the right fertilizer and soil, and he immediately moves to field trials.  He also notices that the grass produces a seed that durable, storable, and extraordinarily calorie dense.  The scientist immediately recognizes the potential for the newly discovered plant to solve global hunger problems and to meet the dietary demands of a growing world population.

But, there is a problem.  Lab analysis reveals that the seeds are toxic to humans.  Despite the set-back, the scientist doesn't give up.  He toils away year after year until he creates a machine that can convert the seeds into a food that is not only safe for humans to eat but that is incredibly delicious to eat.  There are a few downsides.  For every five calories that go into the machine, only one comes out.  Plus, the machine uses water, runs on electricity, burns fossil fuels, and creates CO2 emissions.  

Should the scientist be condemned for his work?  Or, hailed as an ingenious hero for finding a plant that can inexpensively produce calories, and then creating a machine that can turn those calories into something people really want to eat?  

Maybe another way to think about it is to ask whether the scientist's new product can pass the market test; can his new food - despite it's inefficiencies (which will make the price higher than it otherwise would be) - compete against other foods in the marketplace?  Recall, that the new food must be priced in a way that covers the cost of all the resources it uses - from the fertilizer to grow the new seeds to the gasoline required to run the new machine.

Now, let's call the new grass "corn" and the new machine "cow".  The analogy isn't perfect (e.g., the cow is a living-feeling being and not a lifeless machine), but the thought experiment is useful nonetheless.

It's particularly useful in thinking about the argument that corn is "wasted" in the process of feeding animals.  It is one that appears - in one form - in a recent paper in Science.  West et al. write:

“Although crops used for animal feed ultimately produce human food in the form of meat and dairy products, they do so with a substantial loss of caloric efficiency. If current crop production used for animal feed and other nonfood uses (including biofuels) were targeted for direct consumption, ~70% more calories would become available, potentially providing enough calories to meet the basic needs of an additional 4 billion people (28). The human-edible crop calories that do not end up in the food system are referred to as the “diet gap.””

I'm not sure the logic of this sort of argument adds up.  

Unlike my hypothetical example, corn is not toxic to humans (although some of the grasses cows eat really are inedible to humans).  Nevertheless, few people really want to eat the calories that directly come from corn or other common animal feeds like soybeans.  

So, why do we grow so much corn and soy?  They are incredibly efficient producers of calories and protein.  Stated differently, these crops (or "grasses" if you will) allow us to produce an inexpensive, bountiful supply of calories in a form that is storeable and easily transported.  

The assumption in the quote of the Science article seems to either be that the "diet gap" will be solved by: 1) convincing people to eat the calories in corn and soy directly, or 2) that there are other tasty-edible crops that can be widely grown instead of corn and soy which can produce calories as efficiently as corn and soy.  Aside from maybe rice or wheat (which also require some processing to become edible), the second assumption is almost certainly false.  I'm also skeptical about the first assumption - that large swaths of people will voluntarily consume substantial calories directly from corn or soy.

What we typically do is take our relatively un-tasty corn and soy, and plug them into our machine (the cow or pig or chicken) to get a form of food we want to eat.  Yes, it seems inefficient on the surface of it, but the key is to realize the that the original calories from corn and soy were not in a form most humans find desirable.  As far as the human pallet is concerned, not all calories are created equal; we care a great deal about the form in which the calories are delivered to us.

The grass-machine analogy also helps make clear that it is probably a mistake to compare the calorie and CO2 footprint of the corn directly with the cow.  I suspect only a very tiny fraction of the world's caloric consumption comes from directly consuming the raw corn or soy seeds.  It takes energy to convert these seeds into an edible form – either through food processing or through animal feeding. So, what we want to compare is beef with other processed foods.  Otherwise we're comparing apples and oranges (or in this case, corn and beef).