Insights into the true costs of food are more important than ever

The Global Living Planet Index of species is constructed by WWF to show the degree of global biological diversity. Since 1970 the index declined with 73% (WWF)[1] . At the recent COP16 on biodiversity in Cali, Colombia, some progress was made to further strengthen efforts to preserve biodiversity, although much of the actual implementation of e.g. monitoring of the Kunming Montreal Global Biodiversity Framework of 2022 is still undecided. The decision to set up a fund to which large companies that benefit from Digital Sequence Information on genetic resources will pay has generally been welcomed as a positive outcome of the summit. Its aim is that from the Cali Fund developing countries and Indigenous Peoples and local communities can be fairly compensated for the efforts that they make to preserve biodiversity; one can say that it is a way of paying for positive externalities. A wider fund to compensate developing countries for preservation actions and the development of biodiversity credits were not agreed on. The summit hence shows that although valuation of biodiversity preservation and compensation mechanism are high on the agenda of policymakers, there is still a long way to go to stopping biodiversity loss. Besides biodiversity there are other major concerns about e.g. water and climate change. Research by the World Resource Institute shows that 33% of the production of staple crops for the poorest people are produced in regions where water supplies are highly stressed or highly variable[2]. The food system causes a considerable part of greenhouse gas emissions worldwide. Next to environmental impacts of food systems, underpayment, child labour, and poor working conditions are just a few other examples of social that may be prevailing if no action is taken.

A major issue in implementing changes to internalize externalities is the design of policy measures and business models that incentivise change by rewarding good behaviour and capturing the value of limiting negative externalities and increasing positive externalities. Rewarding farmers for improving biodiversity, animal welfare, or water quality will reduce damage to natural capital and future generations’ wellbeing as well as our own, and at the same time provide much needed extra income for farmers. At the food system level, investing in dietary change can considerably reduces negative effects on the environment, and human health. We should truly take stock of our collective resources and the damage that is done to them without accountability. Accounting for true costs of the food system is a way of getting the much needed insight in the true impact of our food system. Only then can we design measures and business models that reward sustainability and optimize our joint wellbeing in the long run.

True Cost Accounting provides a way of translating technical indicators of environmental, social, human and economic impact into comparable measures of value. If the TCA community can explain to policy makers and businesses that citizens put a real value on biodiversity and that this value can be captured by businesses or governments, that provides starting points for policy and business model design. And where consumers are not willing to pay directly for clean air, or products free of forced labour, TCA gives guidance on the underlying social damage that needs to be addressed, as an important instrument to increase transparency, to guide decision-making and promote change. Change in behaviour of all actors along the food chain including consumers is needed to realise a sustainable food system. FOODCoST aims to contribute to the further development of TCA, the databases and application in policies and future business models.

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[1] https://www.livingplanetindex.org/latest_results

[2] https://www.wri.org/insights/growing-water-risks-food-crops