(photo by Petras Gagilas - flickr - CC)
I recently picked a few nits with a post by Jayson Lusk on the environmental impact of meat production. In this post about his recent WSJ editorial I think he is spot on about dealing with externalities associated with beef production.
The first point is that externalities are extremely hard to pin down and price accurately. To some extent, economists have let loose a monster upon the land, giving anyone a blunt tool to beat upon anything that they don’t like. Just because you can point out an externality, doesn’t mean that you have quantified it accurately or put it into a context relative to the costs of competing goods.
The second point is that instead of something like a beef tax to discourage consumption, a better approach is to address the externalities directly. For instance, beef production is a heavy user of water. It would be far better to make sure that water was priced correctly than to tax beef. Proper water pricing would address water waste in areas beyond beef production.
The third point is that we shouldn’t lose sight of the role of innovation in reducing the environmental impact of beef production (and other things):
Technological progress is a key solution. Research shows that the carbon footprint of beef production fell 16% from 1977 to 2007, with much of that reduction resulting from responsible use of technologies. Many consumers are averse to these externality-reducing practices and technologies, but more “natural” production systems are often associated with lower productivity, greater water and land use, and higher carbon footprints.