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Meat Taxes?

This morning I appeared on Fox Business Network with Varney & Co to discuss the idea of meat taxes (something proposed by many groups and authors - e.g., see this recent piece in Bloomberg).  The short segment is below.  It cut out before my last comment where I argued that efficiency is also good for the consumer because it helps bring down food prices.

Do we produce enough food already?

Earlier this week I had the pleasure of giving the George Morris AgriFood Policy lecture at the University of Guelph.  I primarily focused my talk on the benefits of food and agricultural technologies and the importance of productivity growth for solving our future world food problems.  

At the conclusion of my talk, an audience member played devils advocate asked an important question that deserves more widespread discussion.  In short, the question was something along the lines of the following: don't we produce enough food already?  It is a question reflected in many popular writings.  This headline, for example, is "We Don't Need to Double World Food Production by 2050." Here's Mark Bittman writing in the New York Times: "The world has long produced enough calories . . .".  Here's Bittman again under a headline in the same outlet "Don't Ask How to Feed the 9 Billion" because, in his words, "The solution to malnourishment isn’t to produce more food." 

Here are my main main thoughts on this line of thinking:

1) Even if we produce enough calories today to meet today's population, that doesn't mean we produce enough for tomorrow's population.  Productivity growth is gradual and incremental, and if we found ourselves in a situation of needing more food, the new technologies to produce them cannot be created over night.  This is particularly true of our ability to produce in the future is hampered by climate change.

2) There is no binary category of "enough food."  Greater food production leads to lower food prices and lower food insecurity.  I haven't yet met a food consumer who wouldn't prefer paying lower food prices, holding quality constant. 

3) I may be true in an accounting sense that we produce enough calories today to meet total caloric needs.  But accounting isn't economics, and we need to consider the incentives of the system that produces the sufficient calories today relative to an alternative system that is either less productive or involves widespread redistribution.  Massive redistribution of food can destroy the incentives of people to produce the food.  One cannot disentangle the fantastic productivity of our current system with the market forces that led to it's origin.  Stated differently, there is no reason to imagine we'd produce the same number of calories if "the system" were changed to one with massive confiscation/redistribution.  Brady Deaton altered me to this fascinating paper in the Journal of Political Economy showing that 75% of the increase in China's agricultural productivity after 1978 was due to strengthening of individual incentives.

4) It's important to look at productivity through the lens of sustainability.  Higher productivity means getting more (or the same) amount of food output using fewer inputs and resources.  Are people really wanting to argue that they'd prefer systems that require more of our natural resources - more land, more water, more fossil fuels? Since when is lower productivity and inefficiency preferred?  Even if "enough" food is produced today, improved productivity means we can keep producing the same quantity but shrink agricultural's footprint on the land, use less water, fewer pesticides, etc.    

5) If the solution to the food problem is simply shipping food from high productivity countries and sending (or stated more pejoratively "dumping") in lower productivity countries with hungrier citizens, this may harm the livelihoods of producers in low productivity countries and reduce their incentives to adopt efficient forms of agriculture.

6) If places like the US decided to forego new food and agricultural technologies and farmers were forced or incentivized to adopt lower productivity systems, what would happen to patterns of global trade and production.  US farmers compete with farmers all over the world to serve US consumers and consumers worldwide.  Not only would such policies likely reduce US exports, it would make imports relatively more attractive.  Is the solution then import tariffs to prop up our lower productivity system?

7) One can go back to writings from over 100 years ago and find claims that the problem of production and scarcity had essentially been solved, and all that was needed was a heavier handed state to ensure "fair" distribution (e.g., see Edward Bellamy's Looking Backward, published in 1888).  Imagine the world we would live in today if that premise were widely accepted back in 1888 - that the state of production was "good enough" and we could stop worrying about growth and progress.  How much growth would we have lost out on had we stopping innovation in 1888?  We'd still be hand-picking cotton, planting with mules, eating much more salt- and vinegar-cured meats, and more.  What will the food and agriculture future look like in 2088, and what will we give up if we stop working on productivity-enhancing technologies today? 

Personal Choices to Reduce Greenhouse Gas Emissions

This article in Environmental Research Letters by Seth Wynes and Kimberly Nicholas calculates the ways various personal choices affect greenhouse gasses. The paper has received a lot of attention in the media (e.g., see here or here).   At the heart of the issue are the results from this figure in the original paper showing the relative effect of different actions on greenhouse gas emissions.

 

The findings led to headlines like this one in The Guardian, "Want to fight climate change? Have fewer children."  The findings are interesting on a number of fronts.  For example, I regularly see stories suggesting that the most impactful thing one can do to fight climate change is eat less meat.  That strategy shows up as a mere 7th on this chart, and way, way behind having children (not having a child has more than 60 times the emissions impact as moving to a more plant based diet).  

The implication that we should have fewer children raises a number of thorny issues that have long been debated.  Since at least Malthus, folks have been worried about a growing world population.  Stanford biologist Paul Ehrlich has raised alarm since the 1960s about the dire consequences of a "population bomb."  At the heart of this thinking is the premise that an extra person is a kind of threat: a threat to food security, a threat to the climate, a threat to the environment.  There's even a bit of a hint of this thinking in the common mantra of many agricultural organizations that we need to do what we can so that we can feed nine billion people by 2050.  The extra people that will arrive in the next 30 years or so are placing a burden on us today to increasing productivity.  

An alternative perspective, one often attributed to Julian Simon, is that an extra person is a blessing rather than a curse.  People aren't just consumers of resources but are are sources of ideas, creativity, and ultimately new resources.  An extra person isn't a threat but an opportunity.

Regardless of where one falls in this debate, it should be noted the above graph looks at just one side of the equation: the cost of an extra human in terms of extra greenhouse gasses.  What is ignored is the potential benefit of an extra human.  What is the opportunity cost of a foregone Einstein, Edison, or Jobs?  Going further, who are the folks most likely to heed the advice to forego children for the climate, and what would their would-be kids have been like?

It is also worthwhile mentioning that there is no guarantee that population will continue to grow, particularly if the world continues to develop and incomes rise.  Even the UN projections place some probability on a population decline in 30 years time.  One writer of Wired magazine, Kevin Kelly, when asked what we should be worried about (but presumable are not), fretted about about an underpopulation bomb.  Here's what he writes:

Here is the challenge: This is a world where every year there is a smaller audience than the year before, a smaller market for your goods or services, fewer workers to choose from, and a ballooning elder population that must be cared for. We’ve never seen this in modern times; our progress has always paralleled rising populations, bigger audiences, larger markets and bigger pools of workers. It’s hard to see how a declining yet aging population functions as an engine for increasing the standard of living every year. To do so would require a completely different economic system, one that we are not prepared for at all right now. The challenges of a peak human population are real, but we know what we have to do; the challenges of a dwindling human population tending toward zero in a developed world are scarier because we’ve never been there before. It’s something to worry about.

 A couple final thoughts.  The above graphs shows several possible mitigation options, but I haven't heard much discussion of tradeoffs.  Surely the end goal in life isn't to focus all our individual energies on activities to reduce carbon emissions.  So, given my preferences for driving, eating meat, or being a parent, the figures above suggest useful ways of thinking about this problem.  Maybe I don't want to have a more plant-based diet, but at least in terms of greenhouse gas impacts, I can "offset" that and more by foregoing my trip to Paris this year.  

More broadly, we don't normally worry about impacts of our various consumption choices on availability of other resources like steel or fertilizer or labor.  Why?  Because the market price for the goods should reflect the relative scarcity of these items.  One upside to a carbon tax is that we could forego all the moralizing and all these sorts of "consumption advice" types of papers and simply allow consumers to make choices they want given the relative prices of different goods.  But what about children?  The above graph would seem to justify a large carbon tax on having kids.  I'd guess that is a highly unpopular idea, which suggests to me that most of us are more likely to be in the Simon camp than the Ehrlich one when thinking about our own offspring.  

Food Waste Research

Back in 2013, I wrote this post decrying the lack of good research on the economics of food waste.  It wasn't that no research was being done on the issue, only that a lot of the research that had been published at that time is what I'd call food waste accounting, which didn't didn't rely much on the economic way of thinking.

I'm pleased to now see a nice stream of economic research on the subject.  I've blogged on several of these papers before, but now many are starting to appear in print at peer reviewed journals.  Here'a a hopefully handy list of references.

  • "On the Measurement of Food Waste" by Marc Bellemare,  Metin Çakir,  Hikaru Peterson, Lindsey Novak, and Jeta Rudi, forthcoming the American  Journal of Agricultural Economics (This is an important - and likely to be influential - paper that is critical of previous attempts to measure the economic costs of waste and suggests better ways forward).
  • "A Note on Modelling Household Food Waste Behavior"  by Brenna Ellison and me, published in Applied Economics Letters in 2017 (This is a short note showing what is probably obvious to every economist but perhaps not to others: that the optimal amount of waste isn't zero and it depends on various economic variables like food prices and income).
  • "Food waste: The role of date labels, package size, and product category" by Norbert Wilson, Brad Rickard, Rachel Saputob,  and Shuay-Tsyr Hob, published in Food Quality and Preference in 2017 (The authors crafted a clever experimental approach to measure waste in a lab setting and looked at how how measured wasted varied with across date labels, among other factors).
  • "Social-Optimal Household Food Waste: Taxes and Government Incentives" by Bhagyashree Katare,  Dmytro Serebrennikov,  Holly Wang,  and Michael Wetzstein published in the American Journal of Agricultural Economics in 2017 (This paper presents a more developed model than in the Ellison and Lusk paper mentioned above including factors like externalities; they  likewise situate food waste in the context of optimal consumer decision making, considering the effects of various policies on the social well-being).
  • "Examining Household Food Waste Decisions: A Vignette Approach", a working paper by Brenna Ellison and me (This paper uses vignettes to study how food waste behaviors vary with various economic variables and consumer demographics).
  • "Foodservice Composting Crowds out Consumer Food Waste Reduction Behavior in a Dining Experiment", a working paper by Danyi Qi and Brian Roe (This paper also constructs an economic model of food waste behavior and studies how consumers' waste behaviors respond to information about whether waste is composed).
  • "Food loss and waste in Sub-Saharan Africa: A critical review", by Megan Sheahana and Chris Barrett published in Food Policy in 2017 (This is a helpful review paper that discusses the economics of food waste in a developing-country context; the focus is much broader than just considering household food waste, which is the focus of many of the above papers). 

There are no doubt other papers out there on the subject.  Let me know what I've missed.

 

Sources of Food Waste

Which types of food are responsible for the most food waste?  This was a question I attempted to answer with my monthly Food Demand Survey (FooDS) back in January.  There we found that people stated that they tend to waste the most fresh fruits and vegetables followed by bread and bakery products followed by dairy followed by meat.  

I recently ran across this paper by Heller and Keoleian in the Journal of Industrial Ecology.  Their answer to this question is: it depends how you measure it.  

The following figure is from their paper.  The pie chart in the upper left-hand corner is waste measured per pound of food produced.  This measure matches up quite well with my consumer survey: fruits and vegetables are the highest waste categories representing 19%+14%=33% of all the pounds wasted. By this measure, meat represents a small fraction of the total waste.

However, fruits and vegetables don't provide many calories.  The panel on the upper right-hand side of the chart is food waste measured per calorie of food produced.  Now, fats ad oils are the biggest culprit and followed by grains.  By this measure, fruits and vegetables and most meat products are only a small fraction of waste.  

The last pie-chart on the bottom of the figure measures waste per unit of greenhouse gas emitted.  Because beef is a ruminant and produces methane during digestion, it is a relatively large contributor of greenhouse gasses.  As a consequence, when measured in terms of greenhouse gases, beef, veal, and lamb appear as the biggest contributors of food waste followed by dairy.  

So, which measure is the "right one"?  I suppose that depends on whether you're most concerned about lost food pounds, lost food calories, or lost greenhouse gases.  

P.S.  The Heller and Keoleian paper has another fascinating and surprising result.  They simulate what would happen if people kept eating the same calories but instead shifted to eating the way suggested in the federal Dietary Guidelines.  The result?  A 12% increase in diet-related greenhouse gas emissions.