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Calculation of external climate costs for food highlights inadequate pricing of animal products

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  • Maximilian Pieper

    (Technical University of Munich (TUM))

  • Amelie Michalke

    (University of Greifswald)

  • Tobias Gaugler

    (University of Augsburg)

Abstract

Although the agricultural sector is globally a main emitter of greenhouse gases, thorough economic analysis of environmental and social externalities has not yet been conducted. Available research assessing agricultural external costs lacks a differentiation between farming systems and food categories. A method addressing this scientific gap is established in this paper and applied in the context of Germany. Using life-cycle assessment and meta-analytical approaches, we calculate the external climate costs of foodstuff. Results show that external greenhouse gas costs are highest for conventional and organic animal-based products (2.41€/kg product; 146% and 71% surcharge on producer price level), followed by conventional dairy products (0.24€/kg product; 91% surcharge) and lowest for organic plant-based products (0.02€/kg product; 6% surcharge). The large difference of relative external climate costs between food categories as well as the absolute external climate costs of the agricultural sector imply the urgency for policy measures that close the gap between current market prices and the true costs of food.

Suggested Citation

  • Maximilian Pieper & Amelie Michalke & Tobias Gaugler, 2020. "Calculation of external climate costs for food highlights inadequate pricing of animal products," Nature Communications, Nature, vol. 11(1), pages 1-13, December.
    • Handle: RePEc:nat:natcom:v:11:y:2020:i:1:d:10.1038_s41467-020-19474-6
    DOI: 10.1038/s41467-020-19474-6
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    Cited by:

    1. Milena Bojovic & Andrew McGregor, 2023. "A review of megatrends in the global dairy sector: what are the socioecological implications?," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 40(1), pages 373-394, March.
    2. Matthias Staudigel & Aleksej Trubnikov, 2022. "High price premiums as barriers to organic meat demand? A hedonic analysis considering species, cut and retail outlet," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(2), pages 309-334, April.
    3. Romain Espinosa & Nicolas Treich, 2023. "Eliciting Non-hypothetical Willingness-to-pay for Novel Products: An Application to Cultured Meat," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(3), pages 673-706, August.
    4. Cecilia Castaldo & Matilde Giaccherini & Giacomo Pallante & Alessandro Palma, 2024. "Unveiling Shades of Green Food beyond Labels. Evidence from an Online Experiment to Climate Adaptation," CESifo Working Paper Series 11161, CESifo.
    5. Martin C. Parlasca & Matin Qaim, 2022. "Meat Consumption and Sustainability," Annual Review of Resource Economics, Annual Reviews, vol. 14(1), pages 17-41, October.
    6. Oliveira, M. & Zucaro, A. & Santagata, R. & Ulgiati, S., 2022. "Environmental assessment of milk production from local to regional scales," Ecological Modelling, Elsevier, vol. 463(C).
    7. Matthias Schlipf & Bastian Striegl & Tobias Gaugler, 2024. "Climate true‐cost analysis of industrial goods and its regulatory implications on value chains and global competition," Journal of Industrial Ecology, Yale University, vol. 28(3), pages 589-602, June.
    8. Oliveira, Mariana & Cocozza, Annalisa & Zucaro, Amalia & Santagata, Remo & Ulgiati, Sergio, 2021. "Circular economy in the agro-industry: Integrated environmental assessment of dairy products," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).
    9. Nicolas Treich, 2021. "Cultured Meat: Promises and Challenges," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(1), pages 33-61, May.
    10. Niszczota, Paweł & Błaszczyński, Jakub, 2024. "Hard to digest investments: People oppose investment in both conventional and cultured meat producers," Ecological Economics, Elsevier, vol. 218(C).
    11. Sonali Shukla McDermid & Matthew Hayek & Dale W. Jamieson & Galina Hale & David Kanter, 2023. "Research needs for a food system transition," Climatic Change, Springer, vol. 176(4), pages 1-15, April.

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