Food Shortages, Climate Change, and GMOs

I filmed a spot on Fox Business Network this morning in response to this story about possible food shortages due to climate change.

I was glad one of the hosts asked me about GMOs - it wasn't a topic I had anticipated coming up.

By the way, if you want to see some good recent work on the effects of climate change on agriculture within the U.S., see this comment and reply in the American Economic Review by Fisher, Hanemann, and Roberts and by Deschênes and Greenstone.  Both sets of authors wind up at the conclusion that climate change is likely to have a negative effect on agricultural profits in the U.S., but the two sets of authors differ in their subjective views about whether the effects are "large".  Neither study considers the mitigating effects of trade on consumers (i.e., we could import food from other countries who benefit from warmer weather), neither considers the mitigating effects of technological development and adaptation (they assume we wake up tomorrow with 2100 temperatures and must live with today's technology), and neither considers the great deal of uncertainty in the predictions arising from climate change modeling.  These are good studies, but I'm saying there's still a lot we don't know, and probably a lot we can't know until it happens.  

Environmental Impacts of Vegetarianism

Given the latest report from the new dietary guidelines committee that recommends less meat eating (see some of my previous discussion on that here), I found this study just published in Ecological Economics by Janina Grabs quite interesting.

Grabs ask an important question that is rarely asked.  If people stop spending money on meat, what will they spend their money on instead?  And, what are the environmental impacts of those other non-meat expenditures?  Using data based on Swedish consumers, she calculates that, at first blush, a vegetarian diet does indeed appear to have slightly smaller energy use and carbon impacts, BUT if you take into consideration what the vegetarians do with the extra money they used to spend on meat, those environmental gains become dramatically smaller.  She calls this the rebound effect.

Here's the abstract:

“Sustainable diets, in particular vegetarianism, are often promoted as effective measures to reduce our environmental footprint. Yet, few conclusions take full-scale behavioral changes into consideration. This can be achieved by calculating the indirect environmental rebound effect related to the re-spending of expenditure saved during the initial behavioral shift. This study aims to quantify the potential energy use and greenhouse gas emission savings, and most likely rebound effects, related to an average Swedish consumer’s shift to vegetarianism. Using household budget survey data, it estimates Engel curves of 117 consumption goods, derives marginal expenditure shares, and links these values to environmental intensity indicators. Results indicate that switching to vegetarianism could save consumers 16% of the energy use and 20% of the greenhouse gas emissions related to their dietary consumption. However, if they re-spend the saved income according to their current preferences, they would forego 96% of potential energy savings and 49% of greenhouse gas emission savings. These rebound effects are even higher for lower-income consumers who tend to re-spend on more environmentally intensive goods. Yet, the adverse effect could be tempered by purchasing organic goods or re-spending the money on services. In order to reduce the environmental impact of consumption, it could thus be recommended to not only focus on dietary shifts, but rather on the full range of consumer expenditure.”

A couple caveats.  First, it is important to notice an important clause to sentence claiming a 16% reduction in energy use and 20% reduction in greenhouse gas emissions - this is the reduction related only to their diet.  In terms of overall impact, I believe these only translate to 1.8% and 4.15% reductions, quite simply because food only makes up a small part of the consumers overall energy use and carbon impact.  Of course, all this relates to the "first round" impacts and ignores the rebound effect, which is the main point of this study.

Second, the later part of the abstract, which suggests that the, "adverse effect could be tempered by purchasing organic goods" is mainly due (if I'm understanding the study correctly) to an income effect NOT because organics have substantively less energy/carbon impacts.  Because organics cost more, that leaves less money for the consumer to spend on other things that would require energy.  You could create the exact same kind of result by simulating a person who bought and ate less food, and then took all the dollar bills that were saved, and burned them.  This little thought experiment ought to reveal that the goal in life is not to minimize energy use per se, only to reduce it to the extent that you're not taking into account the impacts on others that are not already reflected in the market price.

None of that should distract from the overall important message of this study: that we need to look at all the effects (even unintended ones) when trying to look at policies that encourage people to change dietary habits.  

How do people respond to scientific information about GMOs and climate change?

The journal Food Policy just published a paper by Brandon McFadden and me that explores how consumers respond to scientific information about genetically engineered foods and about climate change.  The paper was motivated by some previous work we'd done where we found that people didn't always respond as anticipated to television advertisements encouraging them to vote for or against mandatory labels on GMOs.  

In this study, respondents were shown a collection of statements from authoritative scientific bodies (like the National Academies of Science and United Nations) about the safety of eating approved GMOs or the risk of climate change.  Then we asked respondents whether they were more or less likely to believe GMOs were safe to eat or whether the earth was warming more than it would have otherwise due to human activities.    

We classified people as "conservative" (if they stuck with their prior beliefs regardless of the information), "convergent" (if they changed their beliefs in a way consistent with the scientific information), or "divergent" (if they changed their beliefs in a way inconsistent with the scientific information). 

We then explored the factors that explained how people responded to the information.  As it turns out, one of the most important factors determining how you respond to information is your prior belief.  If your priors were that GMOs were safe to eat and that global warming was occurring, you were more likely to find the information credible and respond in a "rational" (or Bayesian updating) way.  

Here are a couple graphs from the paper illustrating that result (where believers already tended to believe the information contained in the scientific statements and deniers did not).  As the results below show, the "deniers" were more likely to be "divergent" - that is, the provision scientific information caused them to be more likely to believe the opposite of the message conveyed in the scientific information.  

We also explored a host of other psychological factors that influenced how people responded to scientific information.  Here's the abstract:

“The ability of scientific knowledge to contribute to public debate about societal risks depends on how the public assimilates information resulting from the scientific community. Bayesian decision theory assumes that people update a belief by allocating weights to a prior belief and new information to form a posterior belief. The purpose of this study was to determine the effects of prior beliefs on assimilation of scientific information and test several hypotheses about the manner in which people process scientific information on genetically modified food and global warming. Results indicated that assimilation of information is dependent on prior beliefs and that the failure to converge a posterior belief to information is a result of several factors including: misinterpreting information, illusionary correlations, selectively scrutinizing information, information-processing problems, knowledge, political affiliation, and cognitive function.”

An excerpt from the conclusions:

“Participants who misinterpreted the information provided did not converge posterior beliefs to the information. Rabin and Schrag (1999) asserted that people suffering from confirmation bias misinterpret evidence to conform to a prior belief. The results here confirmed that people who misinterpreted information did indeed exhibit confirmation, as well as people who conserved a prior belief. This is more evidence that assuming optimal Bayesian updating may only be appropriate when new information is somewhat aligned with a prior belief.”

Wheat Yields and Temperature Change

I'm quite sure I've never seen an article in the Proceedings of the National Academies of Science written by a former teacher, a former student, and  a friend at a former employer.  Well, that changed yesterday.   Three top notch agricultural economists, Jesse Tack, Andy Barkley, and Lanier Nalley, just released a paper published in PNAS about the effect of hot and cold temperatures on wheat yields.   

The abstract:

“Climate change is expected to increase future temperatures, potentially resulting in reduced crop production in many key production regions. Research quantifying the complex relationship between weather variables and wheat yields is rapidly growing, and recent advances have used a variety of model specifications that differ in how temperature data are included in the statistical yield equation. A unique data set that combines Kansas wheat variety field trial outcomes for 1985–2013 with location-specific weather data is used to analyze the effect of weather on wheat yield using regression analysis. Our results indicate that the effect of temperature exposure varies across the September−May growing season. The largest drivers of yield loss are freezing temperatures in the Fall and extreme heat events in the Spring. We also find that the overall effect of warming on yields is negative, even after accounting for the benefits of reduced exposure to freezing temperatures. Our analysis indicates that there exists a tradeoff between average (mean) yield and ability to resist extreme heat across varieties. More-recently released varieties are less able to resist heat than older lines. Our results also indicate that warming effects would be partially offset by increased rainfall in the Spring. Finally, we find that the method used to construct measures of temperature exposure matters for both the predictive performance of the regression model and the forecasted warming impacts on yields”

There's more discussion about the study in this piece in the Washington Post.

Are more efficient farms also better for the environment?

The answer appears to be "yes" according to this paper in the journal Applied Economic Perspectives and Policy.

Their motivation:

“The productive efficiency literature has paid very little attention to environmental performance issues. Growing social and political concerns for the environmental impacts of agriculture make it necessary to study environmental and technical performance using robust methodologies that enable scientists to derive reliable indicators. ”

They found . . .

“Empirical findings suggest that our sample farms, on average, reach technical efficiency scores of 93%, and thus that they can reduce input use by 7% while leaving output levels unaltered. Environmental efficiency scores differ depending on the methodology used and indicate ample scope for improving environmental performance and reducing pesticide use and pollution.”

The punchline:

“environmentally efficient farms tend to be more allocative and technically efficient. Better agri-environmental performance is associated with good agricultural practices, supporting the notion that an efficient use of chemical inputs improves both environmental and technical performance. As opposed to previous studies that found an adverse effect of environmental regulations on productivity (Färe et al. 2001), the high correlation between TE and EE for our sample farms implies complementarity between economic and environmental sustainability.”