In the discussion of the global transition to net-zero emissions, much attention has been paid to the industrial and transportation sectors. While these two sectors contribute to over half of the global emissions, the agricultural sector also produces a large amount of emissions. The global food production system is estimated to cause 17.7 billion metric tons of greenhouse gasses every year, accounting for over 10% of the global emissions.
Xu et al. (2021) document that 57% of the global emissions from food production come from the production of animal-based products. Red meat consumption is the single largest emission source, with beef production causing 25% of the emissions from the whole food production system. Plant-based food production’s pollution is only half of that from animal-based food. A transition into plant-based diets would also free up 75% of the existing farmlands. Cultivating livestock requires a lot of land and thus features high opportunity costs in the age of green transition. For example, wind and solar farms are roughly five times more land-intensive than fossil fuel power plants. More land can be used to power our green economy if more farmland can be converted into renewable power plants.
Figure 1 shows the total emissions per 1000k calorie from different types of food. This includes both the direct emissions from the production process and the carbon opportunity cost defined as the amount of carbon lost from native vegetation and soils when the land is converted to produce the corresponding food. This figure reveals the strikingly high opportunity cost of producing meat-based food, which is often downplayed or neglected in discussions of the sustainable food system.
The sustainable diet challenge
Despite the environmental benefits of switching to vegan diets, most people still consume animal-based, carbon-intensive diets. An average American eats almost 100 kilograms of meat annually. As the world population continues to increase and developing countries grow richer, the demand for meat would continue to rise. To ensure food security while cutting emissions from food production, a large population would need to switch to low-carbon diets if the land requirement for producing meat products does not shrink significantly soon.
Environmentalists have advocated a radical transition into plant-based diets. According to a study from Cornell, 10% of Americans report as vegetarian or vegan, doubling that in 2018. This number is expected to rise steadily. Figure 2 shows the count of daily Google searches of the word “veganism”, implying a growing interest in vegan diets in the US. The average daily count has almost tripled from 2010 to 2022. Meanwhile, the Cornell study reports a change in motives of going vegan. In the past, most people cited religious beliefs or personal health as main reasons, while more vegetarians today claim environmental concern as their top motive.
The voluntary price premium hypothesis posits that environmentalists are willing to pay higher prices for plant-based food in the absence of external financial incentives such as a meat tax. However, to decarbonize the food production system, it is crucial to incentivize non-environmentalists to take up low-carbon diets as well. The environmental externalities of meat consumption justify a Pigouvian tax, and recent theoretical research has explored this possibility. Nevertheless, the political feasibility of implementing a meat tax remains unclear. In France, voter surveys have shown that meat tax is the least liked environmental policy, with a support rate of only 17%. Concerns have also been raised about its distributional effect. Meat tax could be regressive since low-income households tend to have higher meat demand elasticities and are less able to afford meat substitutes for essential nutrients such as protein.
Given the challenges in enacting a meat tax, an alternative is to nudge people into taking up low-carbon diets. The concept of nudging is defined by Nobel laureates Richard Thaler and Cass Sunstein as:
A nudge alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.
Nudging has been used in diverse fields to change people’s behaviors. For example, healthcare associated infections (HAIs) are a significant cause of illness, and keeping hands clean can reduce the risk of such infections. Studies have found that hand-washing compliance rates in hospitals rise by three times when people smell the scent from air freshener. The air freshener smell is a physiological nudge. In the electricity industry, a random experiment in India shows that households conserve electricity when they are exposed to peer comparisons. The peer comparison is a social nudge.
Nudging toward low-carbon diets
While not a lot of efforts have been made to nudge people toward sustainable diets, researchers have been investigating how nudging can incentivize people to eat healthier. Experiments on children have found that children can be encouraged by emojis on packages to choose healthy snacks. However, they are nudged to eat unhealthy snacks when observing their peers doing so. This suggests that both psychological and social nudges can affect people’s food choices. Other research has shown that repositioning healthy food to more noticeable places can increase the sales of these products. Research on healthy eating nudges has implications on designing green diet nudges. Two green nudging strategies include carbon information disclosures and green social activities such as Meatless Mondays that could be hosted in schools, neighborhoods, etc.
Currently, food producers are required to print nutritional information panels on food packages. This has been found to nudge consumers toward low-calorie and low-sugar food. Often, we choose to eat unhealthy food because we do not know how unhealthy it is. The nutritional panels convert the level of unhealthiness into concrete numerical values for our brains to process. Similarly, if we know the carbon emissions from producing each food item, we may be nudged toward choosing more sustainable diets.
A field experiment conducted at Cambridge University has shown that students substitute away from high-carbon dishes when the carbon footprint of each dish is provided. On the intensive margin, meat lovers reduce their red meat consumption and instead eat meat-based dishes with a lower carbon footprint such as fish. On the extensive margin, a lot of students began to eat plant-based dishes. Schools should consider replicating such carbon labeling experiments in their dining halls.
In this age of social media, our worldviews are influenced by what we see in the media, which makes it another ideal medium for information disclosure. Campa (2018) documents that power plants reduce emissions when they are located close to newspaper headquarters. Press coverage can improve corporate environmental responsibility because consumers punish polluters by substituting away from their products. Media coverage on high-carbon diets may have similar effects on consumers’ food choices.
Individual commitment to low-carbon diets can bring positive network effects. We are more likely to eat green when our families and friends are doing so. Literature on carbon tax has documented the “social multiplier” of environmental policy. People’s behaviors are shaped both by financial incentives and their social networks. A carbon tax could induce larger emission reductions than expected because people are encouraged to cut even more emissions when seeing other people shift into more sustainable lifestyles. If we consider a “production function” of environmentalists, it will exhibit economies of scale! This suggests that nudges toward low-carbon diets can take the form of large-scale social events. Examples at USC include Meatless Mondays and Trojan Farmers Market on Wednesdays. When we show up to these events with our friends, we are nudged to try organic, low-carbon food and derive happiness from eating them together. This environmentally friendly food can become an “experience good.” More of us would get into the habit of maintaining a low carbon diet.
A societal shift toward green diets could have significant impacts on the plant-based food industry. In 2020, $3.1 billion was invested in the industry, a more than fivefold increase compared to 2015. Going forward, if the expected demand for vegan products such as oatmilk keeps rising, profit-driven businesses would be incentivized to supply more varieties and improve the quality of these products. Meanwhile, more businesses would enter this market, and market competition drives down the prices. Because the high prices have been a barrier of transition into sustainable diets, especially in low-income regions, the price decline could accelerate this transition, and the induced substitution and income effect would create a positive feedback loop in eating green.
What is the true cost of nudging?
Psychologists have found that “nudge” interventions are usually more cost-effective than traditional policy tools. Indeed, if nudges such as Meatless Mondays do end up leading people to radically change their high-carbon, meat-based diets, we can cut a large proportion of emissions from agriculture at a relatively low cost. However, it remains uncertain whether people’s behavioral changes are short-term or permanent. The returns to nudging are low if we switch back to our routine diets in the absence of nudges. Or if the dietary habit formation process is long, the cost of nudging adds up.
This implies that the returns from nudging would be high when it targets the subset of the population who are most likely to make a permanent shift in their diets. Studies have shown that electricity conservation nudges are more effective with liberal households. Green diet nudges may also be more successful when targeting liberals concerned about climate change and higher-income population who can afford the more expensive meat-alternative food.
Perhaps surprisingly, although nudging itself is less costly than most other policy tools, its opportunity cost may turn out to be higher. Hagmann, Ho, and Loewenstein (2019) have documented that nudges can crowd out support for more substantive policies like carbon tax. They give people a false hope of solving the challenges of climate change only through small and effortless actions. Even if we can completely decarbonize the agricultural sector, the industrial and the transportation sectors have to decarbonize significantly to keep the global temperature increase below 2 degrees Celsius. Green nudges should incentivize people to change their diets while informing them the complementarity, not substitutability, between nudges and the traditional climate change mitigation policy.
