Comerford, D.

University of Strathclyde Institutional Repository

Comerford, D. (2017) The economic impact of healthy eating as part of climate change policy. In: 25th International Input-Output Conference (IIOA), 2017-06-19 - 2017-06-23. (Unpublished) , This version is available at https://strathprints.strath.ac.uk/61198/Strathprints is  designed  to  allow  users  to  access  the  research  output  of  the  University  of Strathclyde. Unless otherwise explicitly stated on the manuscript, Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Please check the manuscript for details of any other licences that may have been applied. You may  not  engage  in  further  distribution  of  the  material  for  any  profitmaking  activities  or  any commercial gain. You may freely distribute both the url (https://strathprints.strath.ac.uk/) and the content of this paper for research or private study, educational, or not-for-profit purposes without prior permission or charge. Any correspondence concerning this service should be sent to the Strathprints administrator: strathprints@strath.ac.ukThe Strathprints institutional repository (https://strathprints.strath.ac.uk) is a digital archive of University of Strathclyde research outputs. It has been developed to disseminate open access research outputs, expose data about those outputs, and enable the management and persistent access to Strathclyde's intellectual output.The economic impact of healthy eating as part ofclimate change policyD. ComerfordFraser of Allander Institute, University of StrathclydeIIOA Conference, Atlantic City, USA, June 2017Research Question◮ Red meat ⇒ carbon emissions◮ Red meat ⇒ poor health outcomes◮ Possibility of win-win if reduce red meat consumption?◮ Springmann et al (2016) “adhering to health guidelines onmeat consumption could cut global food-related emissions bynearly a third by 2050”◮ But what are the economic consequences of this?◮ Is there a possibility for a “triple win”?◮ Ask question in a Scottish context as part of wider project todevelop environmentally augmented whole economy model ofScotland at Strathclyde◮ Funded by Scottish Government under RESAS StrategicResearch Programme 2016-2021, Theme 1: Natural AssetsPolicy Context◮ Scottish Government aims (Scottish Government, 2015) tocreate “a more successful country, with opportunities for all ofScotland to flourish, through increasing sustainable economicgrowth”◮ This encompasses policy that◮ enhances economic output, while◮ enhancing health of the population and◮ reducing carbon emissions◮ underpinned by Climate Change Plan (Scottish Government,2017), which recognises the role of agriculture in emissionsand mentions the possible economic benefits of reducedemissions from agricultureThe Food & Drink sector in Scotland◮ Scottish Government has identified 6 Key Sectors in whichScotland has comparative advantage, and in whichintervention & policy is targeted◮ One of these sectors is Food and Drink◮ Others are: Financial and Business Services; Life Sciences;Energy; Tourism; and Creative Industries.◮ Policy context: economic growth, health, climate change?Yes, clearly.◮ Other policy implications: rural growth, spatial economicinequality, food security, ...The Food & Drink sector in ScotlandNB Exports are both to rUK and to RoWHealthy eating◮ The Global dietary guidelines cited in Springmann et al (2016)limit red meat consumption to 300g per week, and energy to∼ 2250kcal per day◮ Scottish Government (2010) says that, on average, Scotsconsume ∼ 120 excess calories per day◮ National Diet and Nutrition Survey (data from 2000 to 2001)suggests that in UK, people eat an average of 70g per day ofred meat (∼ 160kcal)◮ i.e Translate healthy eating guidelines into 5% reduction incalories consumed; 39% reduction in red meat consumption;implies that non-red meat consumption falls by 3%Disaggregating the Agriculture sector in the IO◮ Given research question, and carbon intensity of red meatproduction, want to disaggregate Scottish Government IOtable to split Agriculture into Red Meat and Other Agriculture◮ Moxey (2016) does most of the work ⇒ Gross Output, GVA,intermediate inputs, employment levels for Red Meat◮ Make assumptions on exports and intermediate sales ⇒disaggregated IO table◮ Results so far are with single set of assumptions, still toreconsider these and examine sensitivity of resultsDisaggregating the Agriculture sector in the IO◮ Inter-agriculture sales allocated using GVA◮ Other intermediate sales are allocated to Red Meat/OtherAgriculture on basis of minimising changes in mutipliers seen onnon-agriculture◮ Red Meat is assumed to be exported like Meat processing output◮ Other components of final demand are assumed to be split by totalnon-exported final demand◮ Income is split assuming same wage and profit shares in both RedMeat and Other Agriculture◮ International imports of Red Meat estimated by noting that 45% ofmeat consumed in the UK is imported◮ rUK imports are derived by then noting that Scotland is broadlyself-sufficient in red meat on a net basis and has ∼ 20% of UK herd◮ Assume Scotland imports contain a share of other food and drinkgoods in same proportion as in domestically produced consumptionScottish Carbon Emissions◮ Carbon footprint (with imported emissions separatelyidentified) from Scottish Government (2017b)◮ Territorial emissions (by broad sectoral category) fromNational Atmospheric Emissions Inventory (see Salisbury et al,2016)◮ Apportion into IO table using both broad sectoral categories,and coefficients used by Scottish Government in theirpreparation of carbon impact of their own budget decisions(Scottish Government, 2016b)◮ Assuming rUK carbon intensity = Scottish, and Scottish andrUK exports have same carbon intensity as supply fordomestic consumption, can produce a reconciliation betweenterritorial emissions and the carbon footprintScottish Carbon Emissions◮ NB Carbon footprint >> Territorial emissions◮ Consequence of (a) trade deficit, (b) services dominatedeconomyScottish Carbon EmissionsExercise◮ Assume that the 39% reduction in red meat consumption and3% reduction in other food and drink consumption translatesinto reductions in expenditures◮ Then considering a pure, exogenous, change in consumerexpenditures, ∆Y , so looking at a Type I Leontief IOmodelling exercise◮ Carbon impact of this change is C ′∆X = C ′(I − A)−1∆Y◮ where C is vector of sectoral carbon intensity (per unit grossoutput) coefficients, X is the vector of sectoral gross outputs,and A is the Type I Leontief coefficient matrix◮ Then consider 2 extreme secenarios:◮ ∆Y = 39% reduction in red meat & 3% reduction in otherfood and drink expeditures, and 0 for everything else i.e. allsavings saved◮ ∆Y = 39% reduction in red meat & 3% reduction in otherfood and drink expeditures, and x% increase in discretionaryspending so that all savings are spent◮ Discretionary ≡ not public services, rents, or financial services◮ x is solved for so that overall household spending is unchangedScenario 1◮ This scenario involves only reductions in expenditure, so notsurprising that see falls in both emissions and economicactivity◮ GDP falls by £103m (−0.1%)◮ Employment falls by 3076 employees (−0.1%)◮ Trade balance improves by £145m (−1.4%)◮ Territorial emissions fall by 0.5MtCO2e (−1.0%)◮ Carbon Footprint falls by 0.9MtCO2e (−0.9%)Scenario 1Scenario 2◮ Now spending patterns are shifted without the level ofspending being reduced, not necessarily see falls in eitheremissions or economic activity◮ GDP rises by £5m (0.0%)◮ Employment falls by 916 employees (−0.0%)◮ Trade balance deteriorates by £7m (0.1%)◮ Territorial emissions fall by 0.5MtCO2e (−0.9%)◮ Carbon Footprint falls by 0.7MtCO2e (−0.7%)Scenario 2Scenario 2Conclusions◮ Scenario 2 shows very small economic impacts, with a positivecarbon impacts (i.e. reduction in emissions)◮ This analysis ignores health impacts (reduced healthcare costsand improved workforce productivity) but these will be positive◮ Potentially “triple win”? - makes policy to achieve thisoutcome attractive◮ Aligns well with the the Scottish Government’s aims to create“a more successful country, with opportunities for all ofScotland to flourish, through increasing sustainable economicgrowth”◮ Modelled as exogenous change in expenditures (in a Leontiefmodel with no prices): policies that could achieve this e.g.advertising to change preferences? Very uncertainNext Steps◮ As well as analysing all data used and assumptions made andconducting sensitivity analysis to these◮ Implement in CGE model in which policy can be implementedthrough e.g. tax on red meat◮ Part of a wider project to enhance our CGE models withecosystem services (ESS) and natural capital◮ As well as carbon emissions (and sequestration), other ESSflows include natural imputs to agriculture, fishing, and timber:add to production functions for these sectors◮ How do these additions affect CGE scenario results?◮ Conduct other exercises e.g. reducing these natural inputs(consequence of climate change?) ⇒ impacts on economicoutput from these sectors and spillovers into wider economy◮ Aim of the overall project is to link ecosystems andeconomy-wide models to allow us to identify and quantifymultiple benefits and the impacts upon, and trade-offsbetween, national economic indicators and the management ofnatural assets.References◮ Moxey, A. (2016) “An Assessment of the Economic Contribution ofScotland’s Red Meat Supply Chain”,http://www.qmscotland.co.uk/sites/default/files/economic-contribution-of-scotlands-red-meat-supply-chain.pdf◮ Salisbury et al (2016) “Greenhouse Gas Inventories for England,Scotland, Wales and Northern Ireland: 1990 – 2014”,https://uk-air.defra.gov.uk/assets/documents/reports/cat07/1606140853_DA_GHGI_1990-2014_Report_v1.pdf◮ Scottish Government (2010) “Preventing Overweight and Obesity inScotland”,http://www.gov.scot/Resource/Doc/302783/0094795.pdf◮ Scottish Government (2015) “Scotland’s economic strategy”,http://www.gov.scot/Resource/0047/00472389.pdf◮ Scottish Government (2016) “Input-Output Tables 1998-2013 –Latest Year (2013)”,http://www.gov.scot/Topics/Statistics/Browse/Economy/Input-Output/Downloads/IO1998-2013LatestReferences◮ Scottish Government (2016b) “Greenhouse Gas Estimation”,http://www.gov.scot/Topics/Statistics/Browse/Economy/Input-Output/CarbonAssessment◮ Scottish Government (2017) “DRAFT CLIMATE CHANGE PLAN:The draft third report on policies and proposals 2017-2032”,http://www.gov.scot/Resource/0051/00513102.pdf◮ Scottish Government (2017b) “Scotland’s Carbon Footprint 1998 -2013”, http://www.gov.scot/Topics/Statistics/Browse/Environment/Publications/carbonfootprint9813◮ Springmann, M., Charles, H., Godfray, J., Raynera, M., andScarborough, P. (2016) “Analysis and valuation of the health andclimate change co-benefits of dietary change”, PNASPlus ...Reference to the National Diet and Nutrition Survey (data from 2000 to2001) is fromhttp://www.nhs.uk/Livewell/Goodfood/Pages/red-meat.aspx

The economic impact of healthy eating as part of climate change policy

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