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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.  

The Local Trap

It seems other disciplines are waking up to the fact that "local foods" are not the panacea they're often made out to be.  Here is an interesting article by Born and Purcell in Journal of Planning Education and Research aimed at city planners.  An excerpt:

“The local trap refers to the tendency of food activists and researchers to assume something
inherent about the local scale. The local is assumed to be desirable; it is preferred
a priori to larger scales. What is desired varies and can include ecological sustainability,
social justice, democracy, better nutrition, and food security, freshness, and quality. For
example, the local trap assumes that a local-scale food system will be inherently more
socially just than a national-scale or global-scale food system. This article argues that the
local trap is misguided and poses significant intellectual and political dangers to foodsystems
research. To be clear, the concept of the local trap is not an argument against
the local scale per se. We are not suggesting that the local scale is inherently undesirable.
Rather, the local trap is the assumption that local is inherently good. Far from
claiming that the local is inherently bad, the article argues that there is nothing inherent
about any scale. Local-scale food systems are equally likely to be just or unjust, sustainable
or unsustainable, secure or insecure.”

A Plea for Culinary Modernism

This piece by Rachel Laudan is a masterful discussion of the ahistorical fascination with "natural" food.  She gives an interesting historical account of the evolution of cooking and eating, and make the case that industrialization was the great food equalizer - that the view that "natural" food was good for the poor is hogwash.

Here's one excerpt:

“As an historian I cannot accept the account of the past implied by Culinary Luddism, a past sharply divided between good and bad, between the sunny rural days of yore and the gray industrial present. My enthusiasm for Luddite kitchen wisdom does not carry over to their history, any more than my response to a stirring political speech inclines me to accept the orator as scholar.

The Luddites’ fable of disaster, of a fall from grace, smacks more of wishful thinking than of digging through archives. It gains credence not from scholarship but from evocative dichotomies: fresh and natural versus processed and preserved; local versus global; slow versus fast: artisanal and traditional versus urban and industrial; healthful versus contaminated and fatty. History shows, I believe, that the Luddites have things back to front.”

She points out the condescension in the idea that other people should toil away to make their artisanal ethnic foods so that we can take pleasure in them.  Laudan concludes with some of the following thoughts:

“Were we able to turn back the clock, as they urge, most of us would be toiling all day in the fields or the kitchen; many of us would be starving. Nostalgia is not what we need.

What we need is an ethos that comes to terms with contemporary, industrialized food, not one that dismisses it, an ethos that opens choices for everyone, not one that closes them for many so that a few may enjoy their labor, and an ethos that does not prejudge, but decides case by case when natural is preferable to processed, fresh to preserved, old to new, slow to fast, artisanal to industrial.”

Price impacts of avian influenza (bird flu)

Since the last time I posted on the issue, avian influenza has continued to spread, particularly in flocks of egg-laying hens, and the price impacts are becoming more apparent. 

Here's what I wrote back in April:

“Demand for eggs is likely much more inelastic [than turkey] because of fewer substitutes. The elasticity of demand for eggs is probably somewhere around -0.15 to -0.20. The USDA-APHIS data indicates that about 4 million chickens (I believe these are egg-laying chickens) have been killed due to the flu. There are about 300 million laying hens in the U.S., implying this is a supply reduction of about 1.3%. Following the same logic as before, a 1.3% supply shock in the short run would cause a (0.013/0.15)*100=8.7% increase in egg prices in the immediate short run. Why so much higher than for turkey? Because demand for eggs is likely more inelastic than is demand for turkey. If the outbreak in egg laying hens doubles, reducing supply by 2.6%, that would imply a price increase of 17.3% in the short run. ”

Now, here's what Kelsey Gee wrote in the Wall Street Journal just yesterday:

“Avian influenza has resulted in the deaths or extermination of at least 38.9 million birds, more than double the previous major U.S. outbreak in the 1980s. Of that total, more than 32 million are egg-laying hens, accounting for about 10% of the U.S. egg-laying flock.

The wholesale price of “breaker” eggs—the kind sold in liquid form to restaurants like McDonald’s Corp., food-service supplier Sysco Corp. and packaged-food producers—nearly tripled in the past month to a record $2.03 a dozen on Thursday, according to market-research firm Urner Barry. Meanwhile, U.S. prices for wholesale large shell eggs, those sold at the grocery store, have jumped about 85% to $2.20 a dozen in the Midwest. ”

The actual price impacts aren't that far off from what were predicted from my very simply supply/demand model.  In the very short run, supply is predetermined, so the price impacts of a reduction in supply are determined entirely by the shape of the demand curve.  A very simple demand curve is Q = e*P, where Q is the proportionate change in quantity, P is the proportionate change in price, and e is the own-price elasticity of demand.  Changes in price are thus given by: P=Q/e.  

Thus, if the change in quantity is about -10% as indicated in the WSJ article, and the elasticity of demand is about -0.15 as I previously suggested, the expected short-run price change is P = 0.1/0.15 = 0.667, or a 66.7% increase.  

The 85% price increase cited in the WSJ is larger than the projected 66.7% increase.  This could be because consumer demand for eggs has fallen among some consumers worried about bird flu (see my recent survey for evidence on that), so we may be witnessing not only movements along the demand curve but also a shift in the demand curve.  Or, it could simply be that demand for eggs was more inelastic that I previously assumed.  An own-price elasticity of egg demand of -0.117 rather than -0.15 would imply an 85% price increase in response to a 10% reduction in quantity supplied.  

But, no matter the cause of the price increases, it certainly isn't good for consumers who are harmed by having to pay higher prices for a smaller number of eggs. Producers who have lost flocks are certainly worse off.  The only beneficiaries are those egg producers who've (at least so far) avoided the outbreak.