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 investigates the potential of low-carbon diets to reduce global ecological and health costs. The study employs a comprehensive approach combining life cycle assessment principles and monetization factors to estimate the economic value of environmental damages caused by food production. The study aims to quantify the indirect costs associated with food production, specifically the external costs or externalities that are not fully reflected in the prices paid by consumers or producers. The study focuses on nine global low-carbon dietary change strategies that progressively reduce animal-sourced foods (ASF) to understand their impact on both health and environmental outcomes. The analysis uses a bottom-up approach, combining national food supply data with life cycle impact assessment (LCIA) to assess the environmental impacts. The study aims to quantify the external costs of food production in 2018 as a baseline and evaluate the potential savings through dietary shifts. This includes estimating the production-related human health burden, the degradation of ecosystems, and the overall socio-economic benefits. The research also assesses the consumption-related health burden linked to dietary changes. The findings highlight the substantial potential of dietary changes, particularly in high and upper-middle-income countries, to deliver socio-economic benefits and mitigate climate change, emphasizing the strong indirect links between diets and human health via environmental changes caused by food production.
Key Findings & Statistics
The study found 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.
- The total external costs of food production in 2018 were valued at US$14.0 trillion (US$5.9-32.8 trillion), equivalent to 17% (7-39%) of the world’s gross domestic product (GDP).
- Approximately US$8.3 trillion (US$4.9-13.4 trillion) of these costs are linked to human health burden, and US$5.7 trillion (US$1.1-19.4 trillion) to ecosystem quality decline.
- The hidden costs from food production for every dollar paid by consumers in 2018 globally averaged US$1.94 (US$0.82-4.56).
- This corresponds to US$1.15 of production-linked human health burden and US$0.79 of damage to ecosystems.
- The external cost estimates as a percentage of total GDP range from 7% (3-16%) for high-income countries (HICs) to 102% (43-228%) for low-income countries (LICs).
- The average diets in North America and Oceania have the greatest annual monetarized externalities per capita (~US$4,200).
- The lowest externalities arise from average diets in South Asia and sub-Saharan Africa (~US$1,100).
- ASF (meat, seafood, dairy, eggs, and animal fat) consumption is responsible for a notable share of the total externalities globally, ranging from 48% for LMICs to 84% for HICs, with meat production (beef, pork, lamb, and chicken) accounting for 51% of the worldwide total.
- The complete exclusion of ASF in the VGN scenario could deliver the largest savings, US$7.3 trillion (US$3.2-17.0 trillion) in externalities and abatement of approximately 4.5 Gt CO₂e (3.9-5.8 Gt CO₂e) relative to BASE.
- 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.
- Eliminating ASF from global food patterns could achieve substantial savings in both externalities and GHG emissions.
- Removing only red meat (NRM) would reduce externalities and GHG emissions in the range of US$4.0 trillion (US$1.8-9.4 trillion) and 2.3 Gt CO₂e (2.0–2.8 Gt CO₂e), respectively.
- By considering changes in health burden due to the consequences of both production and consumption, the study estimates 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 corresponds to the benefits from less environmentally impactful food production.
Other Important Findings
- The study highlights that in terms of regional distribution, the average diets in North America and Oceania have the greatest annual monetarized externalities per capita, while the lowest externalities arise from average diets in South Asia and Sub-Saharan Africa.
- Lowering the proportion of ASF in supply patterns could avoid a future increase of up to 25.6 million disability-adjusted life years (DALYs) (18.5-36.1 million DALYs) related to environmental change (VGN with respect to BASE).
- The substitution of meat (PESC), however, accounts for most of this potential (19.9 million DALYs (14.4-27.6 million DALYs)), mainly due to lower agricultural water use demand.
- Meat production requires considerably more water than PBF farming-mostly to grow feed crops.
- The elimination of all ASF (BASE to VGN) 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 found that, processed plant-based foods (PPBF) and insect protein could help greatly reduce externalities.
- Scenarios which partly replace ASF with insect protein (NRM-I, PESC-I) and PPBF (VEG-P and VGN-P) could yield appreciable savings in externalities.
- In contrast, the externalities associated with VEG and VGN scenarios are 14% and 21% higher, respectively, when ASF are partly substituted with PPBF instead of legumes, fruits and vegetables.
Limitations Noted in the Document
- The study’s analysis is based on the 2018 baseline and does not account for potential changes in agricultural practices, technological innovations, or shifts in consumer behavior beyond dietary changes.
- The study uses a cradle-to-gate life cycle approach, which excludes the end-use phases (e.g., transport, energy inputs, cooking, and preparation) to avoid introducing a greater level of uncertainty. This approach may lead to underestimation of the total impacts and externalities, particularly in higher-income regions.
- The results are subject to uncertainties and subjective methodological choices, which greatly affect analyses’ outcomes.
- The study acknowledges that the hidden cost factor is likely heterogeneous as expenditure varies across socio-demographic groups, and the exclusion of alcoholic beverages.
- 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.
Conclusion
This research emphasizes the substantial environmental and socio-economic costs embedded within current food systems. The study underscores the importance of considering production-linked health effects when evaluating the benefits of dietary changes, suggesting that current assessments may underestimate the advantages of plant-based diets. The findings highlight that dietary shifts, particularly those that lower the proportion of animal-sourced foods in global eating patterns, can lead to significant reductions in both greenhouse gas emissions and externalities. The analysis shows that the costs of externalities increase from low- to high-income countries, yet the ratio of hidden external costs to consumer expenditure shows the reverse trend, with higher-income regions bearing a greater burden. The study suggests that mitigating climate change through dietary changes could also reduce wider externalities associated with food production. The study emphasizes that food production is strongly linked to human health and ecosystem quality. The authors also highlight the potential for significant savings in externalities through changes in dietary patterns, which could serve as an economic incentive to facilitate a transition to low-carbon diets. The study’s findings suggest that dietary shifts could not only reduce GHG emissions but also lessen the damage to health and ecosystems caused by agriculture’s environmental impacts. The research also emphasizes the need for a comprehensive understanding of the ‘true cost’ of food to inform decision-making at individual, business, and policy levels. The authors suggest that while the elimination of animal-sourced foods could lead to the greatest savings in externalities, dietary strategies should be carefully implemented to account for regional and cultural differences, with a particular focus on high-income regions where current diets contribute the most to externalities. The research points towards the need for a transformation of food systems to reduce health and environmental damages associated with food production and consumption.