“Rethinking Meat and Dairy: The Hidden Impact of Subsidies on Climate Change”
Scientists worldwide agree that to limit global warming to 2C, consumers – especially in the developed world – must largely change their diets. Reducing meat consumption and substituting for a plant-based diet, along with wasting less food, are some of the most effective actions individuals can take. However, while significant focus is given to the diet choices of individuals, the economic systems promoting the consumption of meat and dairy are often overlooked. Meat and dairy subsidies are artificially lowering the price of animal-based products, promoting their consumption and raising greenhouse gas emissions beyond sustainable levels.
The Impact of Animal Agriculture on Climate Change
According to the United Nations Food and Agricultural Organization (FAO), meat and dairy account for around 14.5% of global greenhouse gas (GHG) emissions. The production of beef and cattle milk accounts for most of these emissions, contributing 41% and 20%, respectively, while pig and poultry meat and eggs contribute 9% and 8% to the sector’s emissions, respectively. Additionally, animal agriculture puts a significant strain on Earth’s limited resources, including land, water, and energy.
To support the billions of animals raised annually for human consumption, one-third of the planet’s ice-free land and nearly 16% of global freshwater are used for raising livestock. Furthermore, one-third of global grain production is used to feed livestock. With consumption of meat and dairy products expected to increase by 76% and 64%, respectively, by 2050, the burden the industry poses on these resources will only grow further.
In comparison, plant-based foods such as fruits and vegetables, whole grains, beans, peas, nuts, and lentils have a much smaller carbon footprint. On average, emissions from plant-based foods are 10 to 50 times smaller than those from animal products. According to a 2022 study by scientists from Stanford University and the University of California Berkeley, phasing out animal agriculture over the next 15 years would have the same effect as a 68% reduction of carbon dioxide (CO2) emissions through the year 2100. This would provide 52% of the net emission reductions necessary to limit global warming to 2C above pre-industrial levels.
Meat and Dairy Subsidies: An Overview
Meat and dairy subsidies are financial incentives provided by governments to support the production, distribution, and consumption of animal-based products such as meat, milk, and cheese. These subsidies come in various forms, including direct payments to farmers, tax breaks, and financial support for infrastructure and technology improvements. The primary goal of these subsidies is to stabilize food prices, ensure a steady supply of agricultural products, and protect the livelihoods of farmers by mitigating the risks associated with market volatility and unpredictable weather conditions.
The global scale of meat and dairy subsidies is immense, with governments around the world allocating billions of dollars each year to support these industries. According to an OECD report in 2021, more than US$700 billion in transfers is provided annually to the agricultural sector worldwide. A significant portion of this funding supports the meat and dairy industries. For instance, in the European Union (EU), livestock farmers receive 1,200 times more public funding than those producing plant-based or cultivated meat alternatives. In the US, animal farmers benefit from 800 times more public funding than their plant-based counterparts.
One consequence of these subsidies is the distortion of market prices. These subsidies lower production costs for farmers, which in turn reduces the retail prices of meat and dairy products in supermarkets. As a result, consumers pay prices which do not reflect the true cost of production. This artificially low pricing fails to account for the extensive environmental damage caused by animal agriculture, including GHG emissions, deforestation, water usage, and pollution. The hidden costs are instead borne by society in the form of environmental degradation – amongst other externalities.
Advocates for agricultural subsidy reform argue for a more equitable distribution of government support, emphasizing the need to shift financial incentives towards sustainable practices and plant-based production. Currently, subsidies disproportionately favor the meat and dairy industries, contributing to artificially low prices and their overconsumption. To address this imbalance, governments could offer subsidies and tax breaks for sustainable agricultural practices and plant-based food producers, leveling the playing field and encouraging more environmentally friendly food choices.
Another proposed solution is the implementation of a meat tax, which would adjust the price of meat to reflect its true environmental costs. Research published in the Review of Environmental Economics and Policy suggests that the retail price for meat in high-income countries would need to increase significantly to account for the environmental damage caused by its production. For instance, beef prices would need to rise by 35-56%, poultry by 25%, and lamb and pork by 19%.
Implementing a meat tax could potentially drive down meat consumption, helping to reduce greenhouse gas emissions. The revenue generated from such a tax could be redistributed to subsidize the production of vegetables, grains, and alternative proteins, making plant-based foods more affordable and attractive.
The current system of meat and dairy subsidies is a significant driver of climate change, perpetuating the overconsumption of animal-based products and contributing to extensive environmental degradation. These subsidies artificially lower the cost of meat and dairy, making them more accessible and appealing to consumers, while failing to account for the true environmental costs associated with their production. This price distortion encourages overconsumption, exacerbating the negative impacts on our climate. By reallocating financial support to sustainable agricultural practices and plant-based food production, governments can reduce greenhouse gas emissions and mitigate the environmental impacts of food production.
However, the feasibility of these reforms is questionable given the current global economic context. Economies are still grappling with the aftermath of the Covid-19 pandemic and the ongoing impacts of the war in Ukraine, making substantial policy shifts challenging. Governments may be hesitant to introduce measures that could increase food prices during a time of economic recovery.
Despite these obstacles, the urgency of addressing climate change and the environmental impact of meat and dairy production cannot be overstated. Concerted efforts are required to balance economic recovery with sustainable practices.