An economic policy approach to healthy and sustainable eating
Author: Ben Griffiths (Vice President of Operations) & Shamak Tiwatane (Initiatives Leader)
Meat is considered to be a staple of many modern diets and a major cultural touchstone for many societies. However, a variety of individual and public environmental, health, and ethical costs associated with meat warrant a consideration of the potential policy landscape for encouraging meat consumption reduction. In a context where global meat consumption continues to increase rapidly, it is increasingly important to both comprehend and respond to the costs of current and predicted meat consumption.
Environment
Animal agriculture has a plethora of negative environmental impacts including land use, greenhouse gas emissions, deforestation, plastic pollution, and water use. All of these impacts are substantial and disproportionate relative to other food sources and other sources of emissions and degradation such as transportation. Our previous article on the impact of animal agriculture on the environment also covers these effects in detail with sources.
Personal health
The consumption of meat has been found to have a number of harmful health outcomes that have both personal and collective ramifications. This is particularly true for red and processed meat, which are classified as Group 2 and Group 1 carcinogens respectively, joining other known Group 1 carcinogens such as asbestos and tobacco. High intakes of red and processed meat are also associated with higher total mortality cardiovascular disease, diabetes, and weight gain in adults. When considering alternatives, studies have shown that swapping out meat for plant-based protein sources is associated with lower risk of coronary heart disease, type 2 diabetes, and stroke. These studies demonstrate substantial personal health risks associated with meat may be abated by a more plant-based diet, which further translates into improved public health.
Public health
While we may often view meat consumption as a personal choice with clear, immediate consequences on our own lives, the implications of high meat consumption can bear consequences on broader public systems. The personal health risks associated with meat consumption lead to an increased reliance on the healthcare system for treatment and care. This reliance, in turn, decreases the treatment capacity of healthcare systems. A strain on the healthcare system caused by decreased capacity limits our ability as a society to absorb any future adverse health shocks; such a scenario has been rather distinctly been highlighted by the ongoing COVID-19 pandemic. Hence, a decrease in treatment capacity represents a negative externality as its true cost is larger than the sum of individual costs borne by patients.
While the above externality can be seen to have an indirect effect on public health, a direct public health concern borne from meat consumption is the increased risk of viral outbreaks. It is thought that the current COVID-19 pandemic has originated from wet markets in China. Such markets contain a diverse range of animals, packed in cruelly close quarters, that are ready for sale and fresh slaughter. The concentration of animals and their interactions with humans make these markets ripe for zoonoses. Such markets exist purely because of humanity’s seemingly insatiable desire to eat meat. The costs to public health arising from the consumption of meat are a local and global externality (evidenced by the COVID-19 pandemic) that may not be properly reflected in the costs of production. A reduction of these costs requires well informed public intervention to shape incentives to lower demand and hence the supply of meat.
Parallels with other products
Despite the significant negative implications of meat, it doesn’t get as much attention from a policy standpoint as products such as fossil fuels for their environmental impact or cigarettes, and is rarely discussed as either a personal or public health issue. Taking the example of cigarettes, when governments around the world responded to the harm posed by tobacco by informing the public of risk, taxing tobacco, creating plain packaging restrictions, and implementing regulations to minimise these costs and save lives. Such an approach has not been taken in regards to meat consumption. Yet, applying a similar policy lens to the externalities of meat consumption would allow governments to facilitate internalising these costs, while empowering consumers with the information and resources to make informed and ethical choices.
Educating the public
Let’s face it, no one likes being told what to do or being forced to do something. The best one can do is provide information and educate people to allow them to make informed choices. While it may seem idealistic, there is evidence to suggest that education is an effective strategy to induce change. Let’s return to the case of plain cigarette packaging in Australia. The introduction of plain packs with larger graphic health warnings achieved its objectives of reducing the appeal of tobacco, increasing health warning effectiveness and reducing the ability of packaging to mislead consumers about smoking harms. As cigarettes can be considered analogous to meat consumption due to the aforementioned health impacts, such an education campaign can be adapted for the purpose of reducing meat consumption.
An educational campaign could manifest as something as simple as a “carbon label”, which would provide consumers with information regarding the GHG emissions associated with the life cycle of food. Such a label could be presented in terms of a familiar unit of reference, light-bulb minutes. That is, purchasing a particular item of food has the same GHG emissions impact as turning on a light-bulb for ‘x’ minutes. Studies have shown that such a label can shift actual consumer purchase choices away from higher-emission options such as red meats. Though it is not as extreme as the cigarette case study discussed earlier, product transparency and consumer education can work to encourage educated consumer choices in the same way that nutrition information helps to highlight healthier options.
Such measures can be seen as short-term solutions designed to inform individuals of the production costs borne by the food they consume that may have otherwise remained unknown. A long-term approach to meat consumption reduction must seek to educate those without any preconceptions of meat and associated health benefits. This involves engaging with the next generation of consumers, children. When children are educated on the importance of nutrition and what a balanced diet should look like, the dietary guidelines should not be solely based on what a suitable diet is from a human health perspective, rather, they should take into account the health of the planet. Sweden has implemented such dietary guidelines since 2015, and has set a roadmap for other nations to follow. These dietary guidelines aim to educate children and adults alike on the harmful effects of excessive meat consumption and instil a responsibility to ensure sustainable food consumption that leads to a reduction in meat consumption.
Price-based instruments
While information-based instruments serve to enable people to make informed decisions and resolve information asymmetries, they don’t fundamentally resolve the externality problems of environmental damage and public health. This is because the costs of greenhouse gas emissions and excess strain on public health systems are incurred by a third party outside of the buyer and seller of meat. Because these costs aren’t incurred by the people involved in the transaction, they aren’t included in the price, and buyers are therefore not financially incentivised to consider these externalities. To resolve this economists look to Pigouvian taxes, which aim to create a tax that matches the size of the externalities such that these costs are internalised by buyers and sellers. In the context of this article, this would involve a tax on meat that matches the size of the public health and environmental costs so that consumers are purchasing meat at prices that are inclusive of all these social costs. The price of the tax could be set so that it induces consumption at the level of the aforementioned government dietary recommendations that include environmental and health implications of meat. While controversial due to social predilections to meat consumption, a meat tax has been studied theoretically, in economic modeling, and through empirical evidence based on similar taxes.
Subsidies are a substantial form of support many governments provide for the agriculture industry, of which animal agriculture receives a proportion. This presents another opportunity to make alterations to government policy through a subsidy swap. This would involve ending or reducing subsidies allocated towards meat and then reallocating the savings towards plant-based sources of protein such as beans, grains, or plant-based meat products. Economic theory suggests this would result in a simultaneous increase in meat prices and a decrease in the price of plant-based protein as governments change which products they are choosing to subsidise the costs of. These cost savings would be passed onto consumers through lower prices in the case of plant-based protein and higher prices as consumers incur the costs that were previously borne by governments. Such a subsidy swap would be beneficial as it encourages agricultural production shifts to less destructive foods as well as changes in consumer behaviour through price changes.
Redistribution policies
The various taxes or educational campaigns discussed may reduce meat demand to such levels that significant reduction in the animal agriculture industry and the resultant displacement of workers may be inevitable. While politicians and companies such as Meat and Livestock Australia (MLA) may introduce campaigns to encourage the consumption of meats, there are potential policies that could address any damaging effects of reducing meat consumption to the economy. Redistribution policies would aim to incentivise the substitution of the production of meat with that of vegetables through the use of subsidies and financial compensation for the production of lower emissions foods. While such a substitution may seem purely hypothetical, the case of the State of California substituting carbon intensive energy production with increasing renewable energy production has shown the possibility of substituting a higher emissions product with a lower emissions product while revitalising the economy through jobs creation.
Regressive effects
In terms of consumer effects, pursuing policies that may result in increases in meat prices will likely have regressive effects in countries where poorer households eat a lot of meat or spend a higher proportion of their income on meat. While a meat tax would internalise the social costs of meat, it has the potential to result in lower economic welfare for poorer people who are left to spend a greater proportion of their income on food without viable alternatives. This potential regressivity can be addressed through compensatory measures as well as through the subsidy swap itself. The benefit of a subsidy swap over simply removing subsidies for meat is through the aforementioned simultaneous decrease in the prices of plant-based proteins. This allows households to maintain or decrease their current levels of spending on food by making alternatives more accessible and disincentivising foods with negative environmental and health implications.
A similar effect can be achieved with a meat tax through providing a rebate equivalent to the size of the tax to low-income households. This means that there is no decrease in income for these households after the imposition of the tax while meat consumption decreases. This is an understandably counter-intuitive result given that households could simply spend their rebate on meat, resulting in no changes in spending or meat consumption other than through a seemingly convoluted rebate scheme. However, a decrease in meat consumption is achieved through income and substitution effects, whereby the effect of increasing income on the proclivity to purchase meat is more than offset by the increase in the price of meat, relative to other sources of food.
R&D and “alternative” meats
However, despite policy efforts to implement price and information based instruments, some consumers may be unwilling to substitute meat for legumes, grains, tofu, and broccoli even if that means paying a higher price and contributing towards negative environmental, public health, and animal welfare outcomes on third parties. This issue could be addressed through continuing to improve access to and developing plant-based meat products that effectively replicate the experience of eating animal-based meats for this subset of consumers. Improving access could be achieved through subsidising plant-based meats alongside other proteins and new products could be developing through funding R&D. These initiatives could be financed by using a portion of meat tax revenue and/or through allocating a portion of the subsidy swap.
Conclusion
Most people associate their carbon footprint with the number of kilometres they drive or electricity they consume. However, we won’t understand the all encompassing nature of climate change until we realise that every choice we make (whether unconscious or not) has an impact and that includes our choice of diet. We are by no means asking people to immediately cease meat consumption, we understand that it will be a gradual process but for anyone still left questioning why they should reduce their meat consumption, ponder this; if we can shut down our entire modern society for weeks and months on end for broad societal benefit, surely we can endorse a slight change in our diets if not for societal and environmental gain but for personal health gain.