Imagine if the price you paid for a hamburger included factors such as heart disease, the number one cause of death worldwide; or the runoff of manure spread on fields from concentrated animal feeding operations; or injuries to workers in slaughterhouses and processing plants; or the poor animal welfare practices in livestock operations. It would certainly be more than US$.99 and would not be part of the value menu.
But advocates for more sustainable food production are working with farmers, public health professionals, economists, scientists, and others to account for these hidden costs through True Cost Accounting, which assigns value to the social, environmental and health impacts of producing food. Taking these costs into account is essential; the economic cost of global environmental degradation from industry is estimated at US$2 to US$5 trillion per year.
TCA has the potential to make industrial food production seem unreasonably harmful and expensive and make sustainable food production seem not only necessary, but affordable.
One organization working to apply TCA to the food system is Sustainable Food Trust (SFT), which works toward a food system that causes the least environmental and social harm through research, economic analysis, and international communications partnerships. Their website contains a hub of resources on TCA, and they organize events and conferences on the topic to bring together scientists, policy makers, healthcare and food industry professionals, and members of the public to make TCA a reality.
SFT is one of many organizations making strides on this issue, but there are many others working on True Cost Accounting.
A global initiative to highlight the economic value of biodiversity, The Economics of Ecosystems and Biodiversity (TEEB) uses natural capital accounting to quantify the cost of ecosystem loss and environmental degradation. The initiative also has a Business and Enterprise project to guide corporations in taking action to protect ecosystems and biodiversity.
The TEEB Agriculture and Food (TEEBAF) project drafted a concept note which reviews the interdependence between agriculture, food systems, and natural ecosystems. The study analyzed the social, environmental, economic, and health-related costs and benefits of these systems to develop a tool for governments and businesses to improve decision-making.
The Agribusiness and Economics Research Unit (AERU) at Lincoln University in New Zealand uses research and applied economics to promote sustainable well-being. Among other work on TCA, they are assigning economic value to New Zealand’s rich biodiversity.
The B Team works with business leaders to scale TCA to enable businesses to make decisions that will benefit people and the planet. The organization is partnered with Natural Capital Coalition and the World Business Council for Sustainable Development, and is working to develop a Social Capital Protocol to quantify the impact of business on people.
The Center for a Livable Future at John Hopkins University Bloomberg School of Public Health focuses on research, policy and communication to support TCA in the food system. The Center’s work analyzes the relationship between food production, the environment and public health, and their model focuses on balancing these three elements to create a livable future.
Ohio State University’s Center for Resilience is creating tools to analyze how industrial products impact the environment.
Earth Economics uses economic principles to promote thriving and equitable ecosystems and economies. The organization’s work includes Ecosystem Service Valuation and environmental impact assessments based on economic analysis.
Food Wastage Footprint, a project of the U.N. Food and Agriculture Organization (FAO), focuses on accounting for the financial costs of food waste. When including the environmental and social impacts of food waste, the global cost has been estimated at about US$2.6 trillion per year.
Leaders for Nature brings together global business leaders to find sustainable solutions and to incorporate natural capital accounting into business. Recently, their India Forum explored the link between natural capital accounting and future prosperity.
Also at the FAO, the Live, Environment and Development Initiative works toward protecting natural resources affected by livestock production. The initiative has created a set of tools to analyze the environmental impact of livestock, such as a computer model that analyzes the amount of fossil fuels consumed for livestock production.
Natural Capital Coalition (NCC) works to preserve and enhance natural capital by encouraging corporations to consider TCA in their policies and practices. The organization is developing a Natural Capital Protocol to help businesses understand and incorporate their impacts and dependencies on ecosystem services. In addition, NCC has released several relevant reports, such as “Natural Capital at Risk: The Top 100 Externalities of Business.”
A collaboration of two major universities and multinational organizations, the Natural Capital Project (NatCap) aims to improve biodiversity and human well-being through TCA. The organization has created a set of tools to simplify TCA, and NatCap works in countries around the world to scientifically test its approach.
The Natural Value Initiative aims to build awareness of corporate dependence on ecosystem services and to help corporations and investors take ecosystem services and biodiversity into account. The organization has developed a toolkit to help the food industry interact responsibly with ecosystem services.
In the United Kingdom, Trucost helps companies build more sustainable business models by assigning economic value to environmental impacts.
In the Netherlands, the organization True Price analyzes both products and organizations to assess and quantify their environmental and social impacts and benefits. Through this work, True Price hopes to help organizations improve their impact. The organization also manages an online platform for TCA.
Wealth Accounting and the Valuation of Ecosystem Services (WAVES) is an international coalition of nongovernmental organizations, U.N. agencies, governments, academics and international institutes implementing TCA in countries around the world. The coalition focuses on assigning value to ecosystem services through a global platform and international consensus.
Through the work of these organizations, farmers, eaters, businesses, policymakers, and the funding and donor communities can move toward recognizing the real cost of cheap food. True Cost Accounting has the potential to change the food system for the better.