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1 Introduction1 T he U.S. food system provides many benefits, not the least of which is a safe, nutritious, and consistent food supply. However, the same system also creates significant environmental, public health, and other costs that generally are not recognized and not accounted for in the retail price of food. These include greenhouse gas (GHG) emissions (Gonzalez et al., 2011); soil erosion, air pollution, and other environmental consequences (Heller and Keoleian, 2003; Wolf et al., 2011); the transfer of antibiotic resistance from food animals to humans (Hayes et al., 2011); and other human health outcomes, including foodborne illnesses and chronic disease (Heller and Keoleian, 2003). Some of these external costs (i.e., external to the food system), which are also known as externalities, are accounted for (“internalized”) in ways that do not involve increasing the price of food (see Box 1-1). But many are not. They are borne involuntarily by society at large (Tegtmeier and Duffy, 2004). A better understanding of external costs would help decision makers at all stages of the life cycle to expand the benefits of the U.S. food system even further. The Institute of Medicine (IOM) and National Research Council (NRC), with support from the U.S. Centers for Disease Control and Prevention (CDC), convened 1  This workshop was organized by an independent planning committee whose role was limited to designing the workshop program and identifying goals, topics, and speakers. This workshop summary has been prepared by the rapporteurs as a factual summary of the presen- tations and discussions that took place at the workshop. Statements, recommendations, and opinions expressed are those of individual presenters and participants and are not necessarily endorsed or verified by the Institute of Medicine or the National Academies; they should not be construed as reflecting any group consensus. 1

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2 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD BOX 1-1 Externality as Defined by Individual Speakers Katherine Smith defined externality as a cost or benefit not transmitted through prices that is incurred by a party who did not agree to the action causing the cost or benefit. James Hammitt referred to the definition of externality laid out in the National Research Council (2010, p. 29) report The Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use: An externality, which can be positive or negative, is an activity of one agent (for example, an individual or an organization, such as a company) that affects the well-being of another agent and occurs outside the market mechanism. a public workshop on April 23-24, 2012, to explore the external costs of food, methodologies for quantifying those costs, and the limitations of the methodologies. The workshop was intended to be an information-gathering activity only. Given the complexity of the issues and the broad areas of expertise involved, workshop presentations and discussions represent only a small portion of the current knowledge and are by no means comprehensive. The focus was on the environmental and health impacts of food, using externali- ties as a basis for discussion and animal products as a case study (i.e., spe- cifically beef, poultry, pork, and dairy). The intention was not to quantify costs or benefits, rather to lay the groundwork for doing so. A major goal of the workshop was to identify information sources and methodologies required to recognize and estimate the costs and benefits of environmental and public health consequences associated with the U.S. food system (see Box 1-2). It was anticipated that the workshop would provide the basis for a follow-up consensus study of the subject and that a central task of the consensus study will be to develop a framework for a full-scale accounting of the environmental and public health effects for all food products of the U.S. food system. Nor was the intention to make any recommendations or suggest poli- cies. Rather, again, it was to lay the groundwork for future efforts. Accord- ing to Anne Haddix, senior policy advisor at CDC’s National Center for Disease Prevention and Health Promotion, the hope is that a framework can be built that will help to identify novel strategies for dealing with food system-related public health problems, such as obesity, in ways that are not only healthful, but also environmentally sound and economically produc-

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INTRODUCTION 3 BOX 1-2 Statement of Task An ad hoc committee will organize a 1.5-day public information-gathering workshop to examine the challenges inherent in estimating the costs of the U.S. food system not reflected in retail prices and to consider the kind of research strat- egy that would be needed to approach such a full-scale accounting. The workshop will identify the types of information sources and methodologies required to rec- ognize and estimate the costs and benefits of externalities and unintended public health consequences associated with the U.S. food system. While the central focus of the workshop will be to understand how to account for externalities and unintended public health consequences of the U.S. food system broadly, meat will be used as a case study with which to explore how to approach the measurement of environmental and public health effects. The work- shop planning committee will select the animal species (e.g., beef, pork, chicken, or fish) and different production, marketing, distribution, and retail systems that would provide the most appropriate points for analysis. It is anticipated that the workshop will identify key categories of externalities and unintended public health consequences associated with the production and consumption of meat, the extent of information available on each of the categories, appropriate metrics for quantification, limitations and knowledge gaps, as well as modeling and other analytical approaches needed to establish the value of these costs and benefits. The workshop would also provide the basis for a follow-on planning discus- sion involving members of the IOM Food and Nutrition Board and NRC Board on Agriculture and Natural Resources and others to develop the scope and areas of expertise needed for a larger-scale, consensus study of the subject. Based on the framing of the study by the planning discussion, it is envisioned that a central task of the work of a subsequent consensus study committee will be to develop a framework for true-cost accounting of the U.S. food system and to attempt to draw supportable conclusions about the true costs of food. tive. Currently, no framework is available for analyzing in a comprehensive and systematic way how the food system impacts public health. Although the CDC’s initial intention was to focus on public health, Haddix described the food system as being so complex and interactive that it is impossible to separate the health consequences of the food system from environmental, economic, social justice, and other consequences. Thus, the workshop plan- ning committee invited a diverse group of experts and stakeholders to par- ticipate in the discussion, including economists, farmers, environmental and agricultural scientists, and public health experts. Their expertise spanned the entire course of the food life cycle. Given the diversity of perspectives, numerous challenges and complexi- ties regarding the types of information sources and methodologies available to measure the health and environmental costs and benefits associated with

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4 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD the U.S. food system were identified over the course of the workshop. Some participants questioned the rationale for conducting a full-scale accounting of the costs of food and whether another approach might be more feasible. They also stressed that all costs are relative because all food and agricul- tural systems are dependent on the natural environment; therefore, such an exercise would need to undertake comparisons of alternative food system activities or practices. The heterogeneity of landscapes and management practices among sites only complicates this endeavor, as emphasized by many workshop participants. Participants also expressed varying opinions about the limitations of framing the analysis in terms of externalities. Sev- eral other issues were noted, including the broad range of external costs and benefits that were not included in the focus of the workshop; the lack of sufficient data; the importance of considering all stages of the food life cycle; the risks associated with simplifying assumptions about the effects; the inability of models to capture the heterogeneity among food produc- tion methods; the variability in the degree of certainty around the magni- tude of some effects; and the numerous unanswered questions about the methodologies discussed for quantifying health, environmental, and other effects. Many of these overarching issues are discussed in greater detail in Chapter 7. By bringing together a wide range of experts, however, the workshop was able to forge connections across subjects that typically are discussed as though they are distinct from one another. The diversity of perspectives and experiences represented among the participants allowed for this workshop to become an important first step in illuminating the range of expertise, methodologies, and information sources that would need to be included in future explorations of the topic. ORGANIZATION OF THIS REPORT The organization of this report roughly parallels the organization of the workshop itself (see the agenda in Appendix A). Chapter 2 addresses the economics of food prices and considerations for valuing food. Chapter 3 summarizes the Session 1 presentations on measures and strategies for estimating the external environmental and health impacts of food. Speak- ers considered the opportunities and limitations of several methodologies: life cycle analysis (LCA), health impact assessment, cost-benefit analysis, multidimensional impact assessment and modeling, and risk assessment. Although the focus of the workshop was on environmental and health costs, a panel session on the social and ecological dimensions of the food supply was held to explore some of the broader impacts. Speakers discussed ecosystem services and disservices, health inequalities, accessibility to food, and animal welfare. Chapter 4 summarizes that panel session. Chapter 5

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INTRODUCTION 5 summarizes the two presentations that focused on methodologies and limi- tations of attaching monetary value to costs and benefits. Chapters 6 and 7 summarize group discussion that occurred through- out the course of the workshop, including discussion that occurred during the small working group portion of the workshop. About one-third of the workshop time was spent in small working groups. There were four work- ing groups: energy usage and GHG emissions; soil, water, and other envi- ronmental consequences; consequences of antimicrobial use in agriculture; and other public health consequences. The groups were asked to identify effects, methodologies for measuring those effects, and limitations of the methodologies. Chapter 6 includes a summary of these working group dis- cussions. Chapter 7 provides an overview of the major overarching themes from all the open discussions that occurred throughout the workshop, in- cluding participants’ reflections on key considerations for moving forward with future work in this area. This workshop summary was prepared by the rapporteurs as a factual summary of the presentations and discussions that took place during the BOX 1-3 Key Terms Used in This Report End-of-life: In the context of LCA, end-of-life refers to the stage of the product after preparation and consumption by the conumer. At this stage, the food product is disposed of in some manner (e.g., recycled or placed in a landfill). Health impact assessment (HIA): HIA is not a single method, but rather a sys- tematic process that uses a wide array of data sources, analytical methods, and stakeholder input to determine the potential effects of a proposed policy, plan, program, or project on the health of a population and the distribution of those effects within the population. Life cycle assessment (LCA): In the context of the food system, LCA is a tool for examining the environmental impact of a product that covers the impacts of manufacturing, of the upstream production chain (e.g., material extraction, fuels, transportation, etc.) and downstream disposal (e.g., recycling, landfilling, etc.). According to Heller and Keoleian (2003), “a product life cycle approach provides a useful framework for studying the links between societal needs, the natural and economic processes involved in meeting these needs, and the associated environmental consequences.” Life cycle stages: For a food product, the following life cycle stages are consid- ered in the context of economic, social, and environmental sustainability indica- tors: the origin of the product; agricultural and production conditions; processing, packaging, and distribution of the product; preparation and consumption by the consumer; and the end-of-life of the product (Heller and Keoleian, 2003).

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6 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD workshop. Neither the workshop nor this summary were intended to be ex- haustive explorations of the subject. None of the material summarized here should be construed as reflecting group consensus. For an explanation of key terms used throughout this workshop summary, please refer to Box 1-3. REFERENCES Gonzalez, A. D., B. Frostell, and A. Carlosson-Kanyama. 2011. Protein efficiency per unit energy and per unit greenhouse gas emissions: Potential contribution of diet choices to climate change mitigation. Food Policy 36:562-570. Hayes, D. J., H. H. Jensen, L. Backstrom, and J. Fabiosa. 2001. Economic impact of a ban on the use of over the counter antibiotics in U.S. swine ratios. International Food and Agribusiness Management Review 4:81-97. Heller, M., and G. Keoleian. 2003. Assessing the sustainability of the U.S. food system: A life cycle perspective. Agricultural Systems 76:1007-1041. Tegtmeier, E. M., and M. D. Duffy. 2004. External costs of agricultural production in the United States. International Journal of Agricultural Sustainability 2(1):1-20. Wolf, O., I. Perez-Dominguez, J. M. Rueda-Cantuche, A. Tukker, R. Kleijn, et al. 2011. Do healthy diets in Europe matter to the environment? A quantitative analysis. Journal of Policy Making 33:8-28.