E282: Are healthy, environmentally sustainable diets economically achievable for everyone?

In today's episode, we're discussing the complex and urgent topic of global food demand. The United Nations Sustainable Development Goals, or SDGs, ask countries to make measurable progress in reducing poverty, achieving zero hunger, and supporting every individual in realizing good health. While also mitigating climate change, sustaining the environment and responsible consumption and production habits. Researchers have recommended sustainable diets - planetary health diets. For example, the Eat Lancet Planetary Health Diet. However, others have criticized some of these diets for not addressing the economic and social impacts of transitioning to such diets. Is it possible to balance changing diets, rising incomes, and economic growth with economic feasibility, environmental impact, and long-term sustainability? Well, that's what our goals are today. Our guests today are Andrew Muhammad of the University of Tennessee Institute of Agriculture, and Emiliano Lopez Barrera from Texas A&M. They are my co-authors on a new paper in the Annual Review of Resource Economics entitled Global Food Demand: overcoming Challenges to Healthy and Sustainable Diets.

Interview Summary

Andrew let's begin with you. Why is it important to study the economics of dietary habits and food choices in a global context?

Well, it's important for several reasons, right? When we think both about food security as well as environmental outcomes and maintaining biodiversity, in keeping both human beings and the planet healthy, we really do need to think about this in a global context. One could see agriculture as a global ecosystem where decisions in one country clearly have impacts on outcomes in others. While at the same time, we need to see food as a means by which we satisfy the demands of a global community. Whether it be through our own domestic production or international trade. And then the last thing I'll say, which is really most important are all the actual things we want to tackle and mitigate and correct, fix or improve. Whether it be the environmental issues, global food security outcomes, individual diets, mitigating obesity issues globally, right? It's pretty clear that most of the things affecting human beings in the environment as it relates to agriculture are global in nature, and there's an economic component that we need to consider when addressing these issues in a global context.

Thank you for sharing that. And I am interested to understand what the role of economics in dietary habits is as we explored it in this review paper.

In economics, this is a pretty long history, one could say going back centuries, right? This idea of how income growth impacts food spending on a household or individuals, as well as what economic affluence in development does to sort of how diets transition. And so, for example, it's been long established, right, as individuals get richer, a smaller and smaller share of their income is spent on food. So therefore, food dynamics become less important in [a developed, rich country versus a developing country where a large percentage of income is still spent on food. And what does that mean? That means that while I may find price shocks annoying, and while I may find higher grocery prices annoying, in a developing world that clearly has some implications on the nutritional needs and food decisions far more than it would have on me, for example. But the other thing which is something that has been highlighted for quite some time, and that is this transition from basic staples - from rice, grain, corn, cassava, potatoes, etc. - to more complex food products like high protein dense meat products, fish, milk, dairy, and even highly processed products that are deemed unhealthy. But the point is, as we look at the full spectrum of countries from least developed to most developed, you see this transition from basic staples to these protein dense products as well as complex processed products.

This is a really important point about what are the trends across countries and over time as incomes change and as global prices affect choices. And I do appreciate what you're saying about those of us in, say a country like the United States, where we may be able to absorb some of the shocks that may happen with food prices, we also recognize that there are folks from lower income households where those kinds of price shocks can be really challenging.

That's true.

But this is a different story when we're then talking about developing countries and some of the challenges that they face. Thank you for sharing that. I'm also interested in understanding what do economists mean by a nutritious and sustainable food demand, especially in the context of global or cross-country comparisons. What are some of the things that you uncovered in this review?

Yes, and I think the main thing, which is particularly interesting, is how early diets transition. How quick countries go from being staple dependent to sort of relying more on protein in consumption and demand. And that happens pretty early and so long before you get to say, countries like the United States with a per capita income of around $50,000 per person, you start seeing transitions quite early, right? Whereas income goes from say less than a $1,000 per person to maybe $5,000 and $10,000, you see these transitions right away. And in fact, you begin to see things level off. And what that means is when we think about, for example, animal protein production, which is in the context of dairy and beef, which is considered relatively more harmful to the environment than say poultry production. What you do find is that in these developing countries, they really do transition right away to meat with just minimal income growth. Whereas at the same time, when you start seeing income growth at the higher end of the spectrum, you don't see that much of a change. Now, something that's also unfortunate, what you find is that with income growth, you do see decrease in consumption of vegetables. A part of that is that some staples are counted as vegetables, but another part of that is that wealth and influence doesn't necessarily lead to improved diets. And that's something that's unfortunate. And what it says is that interventions are possibly needed for these improved diets. But to really get back to your question, this idea when we say sort of a nutritious diet, obviously we're thinking about diets that satisfy the nutritional needs of individuals. While at the same time mitigating unhealthy outcomes. Mitigating obesity, cardiovascular disease, etc. But then coupled with that is this whole notion of sustainable agricultural production. And I think one of the difficult things about both nutritious and abundant food as well as environmental outcomes, is we really are thinking about sort of trade-offs and complementarities. Then I think economics gives us a real keen insight into how these things play out.

Andrew, you make me worry that we're locked in. That is as soon as income start to rise, people move to more animal protein-based products. They move away from some fruits and vegetables. And knowing that the environmental consequences of those choices and even the health consequences, my question to you is what kinds of interventions or how do you think about interventions as a way to shape that demand? Is that an appropriate way to think about this?

Alright, so there's a few things. One is just sort of provide nutrition education globally. Having countries and their governments sort of understand these outcomes and then making a concerted effort to educate the public. The other thing is what you often do see is incentivized, for example, fish consumption. Incentivizing poultry production. And you do actually see a lot of incentives for poultry and egg consumption. And I think of like the Gates Foundation in that One Egg a Day initiative to help with child stunting and child growth in the developing world. And so, they're clearly protein alternatives to bovine type products. And I have to be clear here. Like I'm only speaking about this in the context of what's being said, in terms of the environment and animal production. But the other thing I think, it's probably even more important, right? Is this idea that we really do need to rethink how we, both in the developing world as well as in the developed world, rethink how we think about nutrition and eating. And that's just not for developing countries. That's for all countries. And obviously there's one last thing I'll highlight. You do have to be sort of concerned about, say something like taxes. Which would be clearly regressive in the developing world, and probably much more harmful to overall consumer welfare. The point is that taxes and subsidies seem to be the policy instruments of choice.

Great. Thank you for that. Andrew has just shared with us some of the issues of what happens as incomes rise and the changing patterns of behavior. And that there are some implications for sustainable diets. Emiliano, how can we use the type of data that, Andrew talked about to model food systems in terms of health and nutrition. What can we learn from these models and, what should we do with them?

Emiliano – Yes, thank you. Andrew really pointed to like many very important issues, aspects. We see some worrisome trends in the sense that current diets are going in the direction of showing less nutritious. Also, we are looking at a lot of issues in the environmental externalities, embedded resources. A lot of that within the current diet trajectory. Economic models, they have this advantage that they can connect these things together, right? Each time that we decide what we are purchasing for eating each day we are deciding in a combination of these resources embedded in the food that also some potential nutritional outcomes or health outcomes related to that diet. And the models help to connect these things very well. We can trace this back from more, sort of naive approach where we do have lifecycle assessments where you just track the account numbers through the different stages of the food. And you can just basically trace the footprint or head print of the foods. But you can come up with more advanced models. We have seen a huge advance on that area in the last 10-15 years where models can really connect the things in a more holistic approach. Where you can connect the demand systems and the supply system both together. And then from and calibrate the models. And then also they're very useful to project to the future, different states of the world in the future. By doing that sort of exercises, we can learn a lot of how these things are connected, and how potential different pathways towards the future will also have potential different outcomes in terms of nutrition. But also, in terms of environmental pressure. We can model things, for instance, we were talking a little bit on how to shape these different sorts of diets. That's a thing that is advancing more and more in the modeling literature. We can see that people are going from these earlier approaches where we just get a particular diet that we have as a goal, and then we use that as a sort of counterfactual compared to the baseline sort of trajectory. Now we are looking more and more people doing exercises like how we can actually get there with this, for example, differential value added taxes where you kind of harm some type of food and then you kind of incentivize the consumption of others, as Andrew was saying. And we are looking at a lot of those sort of exercises at the global level, localized, and we are learning a lot of these intricate relations from the models. I think that's bottom line. And in that sense is models are really well equipped to this problem in the sense that show this holistic picture of the issue.

Thank you for that. And what we've been learning from these models is this holistic picture, but can you tell us anything about how these models help show these relationships between diet and health outcomes and environmental sustainability? I mean, what's happening? Are we seeing models help predict the greenhouse gas emissions or changes in cardiovascular outcomes? What are you seeing?

Well, typically when we do baseline projections, we use a lot of end use information where we have been studying things backwards, and in these integrated relationships. And when we look into the future, these relationships get stronger. Like some low income, middle countries tend to sort of repeat similar patterns of things that we have seen already in more industrialized countries. We have all this nutrition transition that comes strong. Pretty fast and pretty strong within the models. And when we look forward, the problems are not only going to be like the ones we see now, but probably somewhat worse. Especially in the pressure on the use of natural resources. So that's one thing that we have seen. Another thing that we have seen is that there can be a lot of potential multiple dividends of alternative pathways, right? We have this sort of baseline situation where diets kind of go that way and they become less sustainable, less healthy. We have dual burdens, multiple burdens of malnutrition rising in many countries at the same time. But then when we kind of model this counterfactual situation where what if we get a different diet that can follow certain guidelines or a flexitarian diet or even a vegan diet, whatever. All of those things can bring together some multiple dividends in the sense that you can certainly reduce the pressure on the use of natural resources in many degrees. And then also at the same time, you can reduce the burden of the health outcomes. That's a thing that we have been learning. Another thing that is interesting and is really strong in the model is that you can actually see a lot of synergistic things, synergistic goals that we can learn, but also a lot of potential tradeoffs, right? When we shift towards these sorts of alternative diets in an ideal world, well then, a lot of sub populations in certain parts of the world may suffer that thing too. There are multiple benefits, but also there are a lot of tensions. And we are learning more and more about those as well. And models actually showing those synergistics, but also some of these potential trade-offs in a very, very interesting way.

Thank you for sharing that because one of the topics I was interested in understanding is can folks actually afford these diets? I mean, there was a lot of controversy around, or concern around an Eat Lancet diet in saying can people afford this. And we actually review that in the paper. What you're telling me is that there is a possibility of understanding distributional effects within societies of if we move our diets in this certain way who's able to afford it. Whether the implications for lower income folks in that society as compared to other model diets. Is that a fair assessment of some of the work that you've seen?

Yes, absolutely. If, for instance, when we're doing the models, I'm going to put an example, we do this sort of incentivizing certain kind of foods and we put high taxes on other kinds of foods. Well one thing that is interesting is that all of these potential benefits or spillovers or global spillovers are really interconnected with also trade policies. And global models can tell us a really compelling story about that. In a more connected sort of world, when you do something in certain region that can have some benefits, then that creates spillovers to others. Let's say you reduce the demand of food in certain regions, certain countries, you can shape that. Then that globally through global markets can affect the accessibility or affordability of food in other regions. In that sense, those two things are connected and bring some benefit. But when you look at deeper in that particular region where you're trying to intervene with certain taxes for certain kind of foods, it is obviously going to bring some challenges. Some equity challenges because those particular areas that are devoted to produce that kind of food are also related to a lot of workers, a lot of producers, farmers, etc. And a lot of those are going to get the negative effects of this sort of policies. So that's one side. Then the other side is, yeah, when you affect prices, prices affect obviously the consumers as well. And again, in those certain regions when you have some population that is already are having some challenges to afford certain kind of food, if you impose a tax, then that again will handle those population. There is a lot of work to do to look at the details. And sometimes global models or two aggregated models can fail short in that direction. But we see that in an aggregated world, let's say.

Yes, I appreciate and want to pick up on both something you and Andrew have been really pushing. Is this interconnectedness. Once we intervene in one part of the market or in even one part of the world, there are reverberations throughout. And these models sound really rich, and you started to hit on something that I want to learn a little bit more. And it's this idea that the models aren't perfect. Can you tell us a little bit more about some of the limitations of these models, especially as it relates to policy design or policy discussion?

Yes. Well one thing that is, and the more you look at these things, is some of these models or mostly global models, they do have again this benefit that you can see many things interconnected at the same time. But that then you have to neglect something. There is a trade off in that decision. And typically, you are looking at things at a slightly aggregated sort of level. So typically, you have a average representative consumer or an average representative producer in a different region or a different country. With that, you then could miss a lot of the heterogeneous effects that a policy or a counterfactual state of the world will have on a certain population. In many cases we will fall short on that. And one thing that we have seen, and it's really cool, and I think it's a really good advancement in recent years more, people is doing, is that sort of multi-scale kind of approach where you do have a sort of global model to solve certain situation and then with that you calibrate in a more granular type of level of model. That sort of multi-scale approach it's working pretty well to see more of these multi-level effects. But sometimes global models can fail short on getting a heterogeneous result, I guess.

Thank you for sharing that. And it's important to understand that models are not perfect, and that we're regularly as a discipline, as a field, we're always working on improving the models, making them more realistic, and more responsive to policy shifts. And so that begs this question, and then I'm going to open this up first to Andrew and then back to you, Emiliano. In this review paper, we were looking at the state of the world, the state of the art of research in this space. And my question to you both is what are some places where you see a need for new research or new research questions that we haven't really dealt with? What are you seeing as important places to go here?

Here's the thing. I wouldn't necessarily refer to it as sort of new research, but certainly where we definitely need more research. And so, for those studies that continue to link greenhouse gas emissions with animal protein production, and really trying to think about what that would necessarily mean if we in some way mitigate animal protein production. Particularly let's say cattle and dairy. What does that necessarily mean for countries at the lower end of the spectrum where that initial demand for protein is needed. While at the same time we're not seeing changes in the developing world. The point is, where do we get the most bang for our buck? Do we get the most bang for our buck environmentally by trying to mitigate consumption globally? Or in some way trying to mitigate consumption, say in the United States and Europe, while at the same time letting Botswana and other countries carry through on that dietary transition that would otherwise occur. And I do think I've seen studies like that. But I do think this whole issue of where best to mitigate meat production and where best to sort of let it go.

The other thing, and we're going to continue with this going forward. And that is particularly in the developing world this idea of how one manages both rising obesity and rise in malnutrition all at the same time. Like that is a very sort of precarious position for governments to find themselves in. One, having to both feed people more than what's available, while at the same time having a subset of the population eating too much. Whereas unlike the United States where we could pretty much have a blanketed dietary strategy to try to reduce size, girth, and just sort of eating habits. In the developing world, you really do have to manage the dual negative outcomes of both obesity as well as malnutrition.

Great. Thank you. And I really appreciate this idea of where do we target interventions? Where do we, as you said, where do we get the biggest bang for our buck? And then this really complicated tension of some folks is experiencing food security challenges, others are facing issues around obesity. And we actually see in some places where those two things come together really complex ways. What's the right set of policies to actually solve both of those problems? And how do you do that well? Emiliano, what are you thinking about in terms of new directions or areas to go?

So, in terms of approaches like more in a technical way, but I'm going to be brief from this I promise, I feel that there is a lot of work to do in multilayer modeling. I think that's a really exciting avenue that people are trying. And there are different ways to go from top bottom sort of approaches in the demand spectrum, but also in the resource embedded spectrum. So that's pretty exciting. But then topically, I think Andrew covered pretty well. I will say also that we do have the multiple burdens of malnutrition. On top of that thing that I would mention is the food waste. A thing that I have learned in the past that food waste is a big portion of the overall purchasing basket. And it's coming pretty clear still is way sort of underdeveloped kind of area because it's a very difficult thing to measure. There are not a lot of papers that can address this globally or look at long run trends and things like that. But it's typically mirroring the dietary transition as well. But we really need to learn how that looks. Is this a thing that we used to think 5-10 years ago? It was more like a sort of static problem in rich countries that they tend to waste food. But now we're looking more and more that this is an increasing problem in more developing countries, emerging economies. And as soon as we get certain threshold of income, people start purchasing more than what they need. And then we see more and more food waste. And that area I think is somewhat overlooked or still a good challenge to be addressed. And then from there, when you look at that, we should look at how that again enters the big picture, right? I mean, there are a couple of papers that have combined these changes in diets, reducing food waste as a part of it, and so like that. But still there is a lot of work to do on that. We tend to think also, and again, similarly to with the other things, that food waste is not a great thing. It's a clear sign of inefficiency in the global food system. Food waste itself also has a lot of embedded resources, right? One of them is labor. So, we just try or do a huge amount of effort to just reduce or eliminate food waste or reduce in a big portion of food waste. Then what's going to happen with a lot of employment that it was devoted to that. I think that particular fact is somewhat overlooked too. But again, those are the sort of areas I would be excited to look in the near future.

I really appreciate this point about food waste. That's an area that I've been working on mostly in the US. And I agree, I think there's some critical places for us to consider. And also thinking about what that means for modeling. I know with the Thrifty Food Plan here in the United States, there's an assumption of a 5% food waste and that's a big assumption. When you can imagine just how different households may respond to incentives or how prices may influence their choice or maybe even lack of choice as food waste does occur. So, I think you are touching on some really important points, and I really like how, Andrew, you're talking about the importance of targeting.

Bios

Andrew Muhammad is a professor of Agricultural and Resource Economics at the University of Tennessee Knoxville. He is an expert in international trade and agricultural policy. He assists state and national agricultural decision-makers in evaluating policies and programs dealing with agricultural commodities, food and nutrition, natural resources, and international trade.

Emiliano Lopez Barrera is a visiting assistant professor in the Department of Agricultural Economics at the University of Texas A&M University. His current research focuses on understanding how future patterns of global food consumption will affect human health, and how the agricultural changes needed to support the ongoing global nutrition transition will affect the environment. He combines econometric tools with economic and nutrition modeling to explore the trade-offs and linkages among diets, human health, and environmental sustainability. Prior to his grad studies, he worked as a consultant for the Inter-American Development Bank at the Central Bank of Uruguay.