Abstract
Potential external cost savings associated with the reduction of animal-sourced foods remain poorly understood. Here we combine life cycle assessment principles and monetarization factors to estimate the monetary worth of damage to human health and ecosystems caused by the environmental impacts of food production. We find that, globally, approximately US$2 of production-related external costs were embedded in every dollar of food expenditure in 2018—corresponding to US$14.0 trillion of externalities. A dietary shift away from animal-sourced foods could greatly reduce these ‘hidden’ costs, saving up to US$7.3 trillion worth of production-related health burden and ecosystem degradation while curbing carbon emissions. By comparing the health effects of dietary change from the consumption versus the production of food, we also show that omitting the latter means underestimating the benefits of more plant-based diets. Our analysis reveals the substantial potential of dietary change, particularly in high and upper-middle-income countries, to deliver socio-economic benefits while mitigating climate change.
Generated Summary
This research study combines life cycle assessment principles and monetization factors to estimate the monetary value of the damage to human health and ecosystems caused by the environmental impacts of food production. The study’s primary objective is to quantify the indirect costs of nine global low-carbon dietary change strategies, which progressively reduce animal-sourced food (ASF) consumption. The researchers utilized a holistic approach, integrating life cycle impact assessment (LCIA) principles, data from the Food and Agriculture Organization (FAO) Statistics Division Food Balance Sheets (FBS), and monetization factors to assess the externalities associated with diets. The research examines the substantial potential of dietary changes, especially in high and upper-middle-income countries, to deliver socioeconomic benefits while mitigating climate change.
Key Findings & Statistics
The study found that the external costs of food production embedded in diets worldwide are substantial, approximately $2 of production-related external costs were embedded in every dollar of food expenditure in 2018, which corresponds to $14.0 trillion of externalities. The study found that approximately $8.3 trillion of the $14.0 trillion in external costs is linked to human health burden, and $5.7 trillion to ecosystem quality decline. The hidden costs from food production for every dollar paid by consumers in 2018 globally averaged at $1.94 ($0.82-4.56), with $1.15 of production-linked human health burden and $0.79 of damage to ecosystems. The study determined the average diets in North America and Oceania have the greatest annual monetarized externalities per capita (~$4,200), while the lowest externalities arise from average diets in South Asia and sub-Saharan Africa (~$1,100). Breaking down contributions to externalities, it was revealed that the levels of ASF (meat, seafood, dairy, eggs, and animal fat) consumption greatly influence the indirect costs of food. The complete exclusion of ASF in the VGN scenario could deliver the largest savings, that is, $7.3 trillion ($3.2–17.0 trillion) in externalities and abatement of approximately 4.5 Gt CO2e (3.9–5.8 Gt CO2e) relative to the BASE scenario. The potential savings from the VGN scenario represent 9% (4–20%) of global GDP and 110% (75–280%) of the reduction in GHG emissions from BASE required to meet the food production boundary of the planetary safe operating space for climate change, as derived by the EAT-Lancet Commission. The study found that lowering portions of ASF in global dietary patterns would not only reduce GHG emissions but also substantially lessen the damage to health and ecosystems caused by the environmental impacts of agriculture. The study’s results indicate that, the VGN scenario could prevent 155,000 (110,000–218,000) species loss – most of which is linked to the removal of meat (that is, PESC corresponds to a reduction of 132,000 (95,300–181,000) species loss). The study shows that, on a calorie basis, the external costs embedded in the diets of HICs and upper-middle-income countries (UMICs) ($2.52 and $2.22 per 1,000 kcal, respectively) are approximately double that of LMICs and LICs ($1.32 and $1.02 per 1,000 kcal, respectively). The monetarization factor for human health damage in the analysis is calculated via equation (6) and is valued at US$176,624 per DALY, with a lower bound of the uncertainty range of US$148,288 and upper bound of US$200,236. The study estimates show that of the total potential health benefits (in terms of avoided DALYs) from shifting to diets with less ASF and more PBF, approximately a third correspond to the benefits from less environmentally impactful food production. The remaining two-thirds are associated with lower disease risk from consumption (Table 2).
Other Important Findings
- Reducing the intake of animal-sourced foods (ASF) could yield important climate benefits, while contributing to planetary stability regarding land use, biogeochemical cycles, biodiversity and water use, as well as improving public health outcomes.
- Compared with the direct climate and environmental implications of dietary changes, their indirect cost repercussions remain relatively under-explored.
- The study found that a dietary shift away from animal-sourced foods could greatly reduce these ‘hidden’ costs, saving up to US$7.3 trillion worth of production-related health burden and ecosystem degradation while curbing carbon emissions.
- For each scenario, it was also estimated the potential reduction in consumption-linked health burden from changes in diet-related disease risk.
- The study reveals that dietary shifts could reduce production-linked human health burden by lowering the demand for foods with the highest environmental footprints of production.
- Our results also show that processed plant-based foods (PPBF) and insect protein could help greatly reduce externalities.
- The results indicate that the prevention of species loss through dietary change would mostly be a consequence of lower water consumption and land use (Fig. 6b).
Limitations Noted in the Document
- The study acknowledges the limitations and assumptions which are detailed in Section 10 of the Supplementary Information.
- Previous studies on the environmental externalities of diets have limited scope-focusing on single countries, specific food types (fruits and vegetables, ASF, or pork only) or individual impact categories (GHG emissions or nitrogen flows).
- The study’s approach is subject to certain limitations and assumptions, which are detailed in Section 10 of the Supplementary Information.
- Reaching consensus on standardized methodologies across organizations will require extensive collaboration.
- LCA are subject to uncertainties and subjective methodological choices, which greatly affect analyses’ outcomes.
- General acceptance of how to derive the monetary worth of biodiversity loss and human life years will not be straightforward either, given ethical and practical difficulties.
- The results likely underestimate the difference between the impacts of less versus more developed countries as post-production stages, such as retail and packaging, play a greater role in the food systems of higher-income regions.
- The LCI data for production in HICs were mainly available (Europe, in particular).
Conclusion
The research underscores the substantial environmental and socioeconomic costs associated with food production. By quantifying these indirect costs, the study reveals that dietary changes, especially those reducing animal-sourced foods, have the potential to significantly mitigate climate change and deliver substantial savings in production-related health burdens and ecosystem degradation. The study highlights that a shift toward diets with lower proportions of ASF could not only reduce greenhouse gas emissions but also lessen damage to health and ecosystems. The study’s findings support the idea that dietary change, as part of a broader food system transformation, can bring substantial benefits that are not typically considered in standard assessments. The study emphasizes the need to consider production-linked health effects when assessing the potential benefits of dietary change. Furthermore, the research suggests that the economic incentive to transition to low-carbon diets can be found through translating damage savings into monetary value. The study also shows that diets and health are strongly linked not only through direct consumption but also through human exposure to the environmental changes caused by food production. The findings suggest that the monetarization of hidden external costs embedded in food consumption patterns can be critical to understanding the implications of dietary change and underscores the importance of considering production-related health effects when evaluating the benefits of dietary changes. Furthermore, it can be implied that carefully designed policy interventions are needed. The findings provide a more comprehensive picture of the broader societal implications of food production and consumption, highlighting the importance of considering externalities in decision-making at various levels.