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Agriculture is one of the world's biggest polluters. Consumers are misled towards demand of unsustainable and inadequately priced food products by an insufficient internalization of externalities. Shifting demand towards more sustainable dietary choices can lead to a sustainable transition of agri-food networks. In this study, we evaluate environmental damage economically: we combine environmental assessment of different food products with the internalization of their monetary impacts. Life Cycle Assessments are modeled for conventional and organic foods and different production scenarios. The quantified environmental impacts are combined with True Cost Accounting to adjust food prices according to their environmental impacts. Using this framework for 22 German agricultural products, we find that on average, crop production generates externalities of about €0.79 per kg for conventional and about €0.42 for organic products. Conventional milk and eggs cause additional costs of about €1.29 per kg on average in organic systems and about €1.10 in organic ones. Conventional and organic meat generate externalities of €4.42 and €4.22 per kg, respectively, with beef generating the highest costs of all. The environmental favorability of organic products is confirmed, but the resulting organic market prices after internalization still exceed conventional prices. Externalities represent a negative impact on societal welfare, which should be addressed by policies supporting transparent pricing approaches.
Entwicklung eines Frameworks zur Monetarisierung externer Gesundheitskosten von Lebensmitteln
(2023)
Quantification and subsequent monetization of dietary externalities is essential to incentivise healthier and more sustainable diets. In this way, positive monetary incentives can be set for under-consumed foods such as fruits or whole grain products and negative monetary incentives for overconsumed foods such as red or processed meat. This not only promotes a shift to healthier diets, but also motivates a move towards a more ecological agricultural economy.
Current crises (i.e., climate crisis, COVID-19 pandemic, Russian invasion of Ukraine, and the resulting energy and food shortages) indicate the need for robust, and sustainable supply chains with regional food production and farmland to secure food supply in the European Union (EU). Recent research shows that organic food is more resilient to supply chain disruptions and price fluctuations. In this context, we examine an approach for the sustainable and resilient transformation of agri-food networks: can an adaptation of value added tax (VAT) levels work as a financial incentive to amplify resilient agricultural practices and sustainable dietary patterns? Within the setting of the amendment of the European framework directive on the use of VAT in 2022, we model the effects of adapting the current German VAT system by (1) reducing VAT on organic vegetarian food to 0% and (2) raising VAT on conventional meat and fish to 19%. Based on historical data on organic sales shares and price elasticities, we project sales shares differentiated by product group for each scenario. Then, we calculate expected tax revenues, changes in consumption patterns, and arising total external climate costs in Germany for both scenarios. Our results show that the overall consumption share of organic food would increase by 21.83% due to the modeled VAT reform compared to the status quo. Despite the VAT reduction to 0% on organic vegetarian products, the measure would yield €2.04 billion in extra tax revenues in Germany per year due to the increased taxation on conventional meat products. We find that annual environmental costs of €5.31 billion can be avoided as a result of lower external climate costs of organic and vegetarian food. Therefore, adjusting VAT rates in the food market can be a political instrument to drive organic food consumption and reduce animal livestock. This supports re-territorialization of agriculture and a more sustainable and resilient European food supply.
The Anthropocene, marked by human-induced climate change, necessitates urgent action to address climate goals and respect planetary boundaries. While sustainability research provides knowledge, the first challenge lies in communicating the findings in an adequate manner to the public and several stakeholders, such as economic and political actors. Therefore, this study explores the significance of science communication in sustainability science, focusing on a case study—the True Cost Accounting (TCA) campaign by the University of Greifswald, Technical Institute of Nuremberg, and German retailer PENNY. TCA herein serves as a transparency tool, economic incentive, and discussion basis for sustainable consumption. This study investigates consumer perceptions of ecological prices of foods through a face-to-face survey during the 2023 PENNY campaign, comparing results to an informational campaign carried out in 2021. Findings indicate a high awareness of the true cost campaign in 2023, with 50.8% of participants hearing about it. Consumers’ willingness to pay true costs and potential behavior changes were explored. In comparison to results from the informational campaign of 2021, customers showed a decrease in this WTP when the true prices would actually impact their spending, indicating an attitude–behavior gap. In addition, a willingness to reduce the consumption of animal foods—if TCA was implemented—of 60.5% was determined, suggests that TCA has the potential for sustainable behavior change. This study highlights factors that influence consumer attitudes and preferences regarding the inclusion of TCAs, such as environmental, social, and animal welfare costs. Customers’ understanding of increased prices like,
in this case, the compensation for environmental and social costs—is an argument in favor of true prices. The results emphasize the need for differentiated scientific communication strategies to bridge knowledge and action gaps in sustainability science.
Agriculture is one of the world's biggest polluters. Consumers are misled towards demand of unsustainable and inadequately priced food products by an insufficient internalization of externalities. Shifting demand towards more sustainable dietary choices can lead to a sustainable transition of agri-food networks. In this study, we evaluate environmental damage economically: we combine environmental assessment of different food products with the internalization of their monetary impacts. Life Cycle Assessments are modeled for conventional and organic foods and different production scenarios. The quantified environmental impacts are combined with True Cost Accounting to adjust food prices according to their environmental impacts. Using this framework for 22 German agricultural products, we find that on average, crop production generates externalities of about €0.79 per kg for conventional and about €0.42 for organic products. Conventional milk and eggs cause additional costs of about €1.29 per kg on average in organic systems and about €1.10 in organic ones. Conventional and organic meat generate externalities of €4.42 and €4.22 per kg, respectively, with beef generating the highest costs of all. The environmental favorability of organic products is confirmed, but the resulting organic market prices after internalization still exceed conventional prices. Externalities represent a negative impact on societal welfare, which should be addressed by policies supporting transparent pricing approaches.
In a case study of Germany, we examine current food consumption along the three pillars of sustainability to evaluate external factors that influence consumers’ dietary decisions. We investigate to what extent diets meet nutritional requirements (social factor), the diets’ environmental impact (ecological factor), and the food prices’ influence on purchasing behavior (economic factor). For this, we compare two dietary recommendations (plant-based, omnivorous) with the status quo, and we examine different consumption styles (conventional, organic produce). Additionally, we evaluate 1446 prices of food items from three store types (organic store, supermarket, and discounter). With this, we are able to evaluate and compare 30 different food baskets along their health, environmental, and economic impact. Results show that purchasing decisions are only slightly influenced by health-related factors. Furthermore, few consumers align their diet with low environmental impact. In contrast, a large share of consumers opt for cheap foods, regardless of health and environmental consequences. We find that price is, arguably, the main factor in food choices from a sustainability standpoint. Action should be taken by policy makers to financially incentivize consumers in favor of healthy and environmentally friendly diets. Otherwise, the status quo further drives especially underprivileged consumers towards unhealthy and environmentally damaging consumption.
A long-term improvement of the current animal husbandry is inevitable. Animal welfare is one of the six areas of externalities and so imposes hidden costs that are currently not priced into food products. A framework to monetize animal welfare and thus account the true food prices would not only yield these external costs, but also provide the opportunity to reform husbandry conditions on German farms. Potential price premiums raised for animal welfare could finance investment projects to improve husbandry.
Veganism is a dietary trend that is in line with the needed change towards a sustainable food system and nutrition but it is only accepted by the population to a limited extent. In this study, the lack of acceptance of society is identified by both a review and a consumer survey. In this context, current food patterns in relation to sociodemographic characteristics are analysed, motives of consumer behaviour related to omnivorous and vegan nutrition are compared and incentives for the purchase of sustainable products as well as the factors for acceptance of vegan nutrition are highlighted.
Due to rapidly rising prices caused by inflation, the current political situation, and the critical impact on the environment through agricultural pollution, sustainable purchasing decisions become increasingly important. A meta-label that offers consumers orientation for a more ecologically, economically, and ethically conscious consumption is a possible tool for changing and adapting the food industry to the current challenges of the environment and society.
Entwicklung eines Frameworks zur Monetarisierung externer Gesundheitskosten von Lebensmitteln
(2023)
Quantification and subsequent monetization of dietary externalities is essential to incentivise healthier and more sustainable diets. In this way, positive monetary incentives can be set for under-consumed foods such as fruits or whole grain products and negative monetary incentives for overconsumed foods such as red or processed meat. This not only promotes a shift to healthier diets, but also motivates a move towards a more ecological agricultural economy.