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3
Understanding Measures and Strategies
R
esearchers have been examining the health and environmental conse-
quences of the various stages of the food cycle from varying perspec-
tives and with different methodologies. Speakers from several fields
were invited to share their approaches to analyzing and interpreting the
food system and its unpriced costs (and benefits). This chapter summarizes
those presentations.
Marty Heller, research specialist with the Center for Sustainable Sys-
tems at the University of Michigan, described how life cycle assessment
(LCA) is used to evaluate the environmental impacts of a product. He de-
scribed the three stages of LCA; discussed how LCA is used, emphasizing
that ultimately it is a decision-supporting tool; and considered the oppor-
tunities and challenges of using LCA in a study on the cost of food. LCA’s
greatest strength is its comprehensive nature. It provides a systematic means
for analyzing all stages of the food cycle and avoiding “burden-shifting”
(i.e., shifting burdens to other life cycle stages, outcomes, or geographic
regions). Although Heller did not elaborate, he mentioned the availability
of tools that can be used to link LCA results with costing perspectives.
Jonathan Fielding, director of the Los Angeles (LA) County Depart-
ment of Public Health, described how health impact assessment (HIA) is
used to evaluate the health impacts of a policy, plan, program, or project.
He emphasized that there is no single HIA approach, rather a range of ap-
proaches, and he provided some examples. One of the greatest strengths of
HIA, in Fielding’s opinion, is the opportunity it provides for intersectoral
collaboration during policy decision making and for influencing decision
makers to base their decisions on a broader understanding of health and a
wider range of evidence.
13
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14 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
John Antle, professor in the Department of Agricultural and Resource
Economics at Oregon State University, mentioned two additional methodol-
ogies that could be used to analyze environmental externalities of the food
system: cost-benefit analysis and multidimensional impact assessment. He
elaborated on multidimensional impact assessment, emphasizing its reliance
on modeling. He also elaborated on some of the major challenges to relying
on modeling as a means to quantify externalities. Key among them is the
vast heterogeneity that exists in the food system, especially with respect to
production (e.g., large- versus small-scale production) and geography, and
implications of that heterogeneity for collecting and analyzing data.
Finally, James Hammitt, professor of economics and decision sciences
at the Harvard School of Public Health, described how risk assessment
could be used to analyze the health outcomes of exposure to a wide range
of food system–related stressors; identified sources of data for analysis;
and explained how health effects are valued and quantified. Hammitt
also discussed, more broadly, the challenge of measuring externalities in
the context of noneconomic behavior. He explained that the concept of
externality is not very well defined outside the classical economic model.
According to classical economic theory, individuals behave as fully in-
formed ational agents. In the “real world,” nonmarket factors influence
r
how people behave.
LIFE CYCLE ASSESSMENT1
“Eating is an agricultural act.”
—Wendell Berry
LCA is a tool for examining the environmental impact of a product.
Marty Heller remarked that the defining characteristic of LCA is its “cradle-
to-grave” perspective. LCA covers not just the impacts of manufacturing,
but also the impacts of the upstream production chain (e.g., material extrac-
tion [i.e., mining], fuels and transportation, etc.) and downstream disposal
(e.g., recycling, landfilling, etc.). Heller provided an overview of the history
of the LCA methodology, described the three main stages of a typical LCA,
and discussed how LCA is used and could be used to study the food system.
History of LCA
Heller described the current state of LCA methodology as being in
a “mid- to late adolescent stage.” The first LCA studies were conducted
in the late 1960s and early 1970s on the impacts of different beverage
containers, initially for Coca-Cola and later for the U.S. Environmental
1 This section summarizes the presentation of Marty Heller.
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UNDERSTANDING MEASURES AND STRATEGIES 15
Protection Agency (EPA). Those studies yielded mixed results. Another
early series of LCA studies was conducted on the impacts of cloth versus
disposable diapers, again yielding mixed results. According to Heller, the
mixed results from these early studies were partly a reflection of the vari-
able methodologies being used. At that time, investigators were only just
beginning to explore LCA. There was no common theoretical framework
upon which to build. The field experienced slow growth in the 1980s, but
it did not really “jump forward” into something that “everyone could
grab onto” until the 1990s. Since then, the methodology has experienced
very rapid growth, with a number of organizations helping to coordinate
the harmonization of different theoretical frameworks and to standardize
methods and procedures. The EPA, the Society of Environmental Toxicol-
ogy and Chemistry, and International Organization of Standards (ISO) have
all been involved. ISO issued two international standards for LCA, both
of which were renewed in 2006: ISO 14040 and ISO 14044. For example,
ISO 14040 defines LCA as the “compilation and evaluation of the inputs
and outputs and the potential environmental impacts of a product system
throughout its life cycle.”
Importantly, Heller said, even though ISO has provided good stan-
dardization, LCA is still very much an “accommodating methodology.”
It is used to study a broad range of systems and address a broad range of
questions, with many methodological decisions being made along the way.
Sometimes, as investigators become familiar with the system under study,
decisions made earlier during the LCA may need to be reconsidered. He
said, “Appreciating these methodological decisions is pretty important in
understanding what the results are really telling us—what we can really
draw from those outcomes.”
The Three Stages of LCA
Standard LCA has three main stages: (1) goal and scope definition;
(2) inventory analysis; and (3) impact assessment. Heller described each
in turn.
Goal and Scope Definition
The first stage of LCA involves deciding the purpose of the study, the
questions being addressed, and the knowledge being sought. These deci-
sions inform which of two major LCA approaches to take. The typical, or
traditional, LCA approach is known as “attributional LCA.” Its goal is to
describe a system as it is, using data averages. (A “system” includes all the
environmentally relevant physical flows in and out of the life cycle and its
subsystems.) The second approach is known as “consequential LCA.” Its
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16 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
goal is to describe how environmental flows change in response to potential
decisions. For example, if a policy decision causes an increased demand for
electricity, what are the environmental impacts of that increased demand?
Both approaches are important, Heller opined, as they answer different
types of questions.
In addition to deciding whether one is going to take an attributional or
consequential LCA approach, another important set of decisions made dur-
ing of the first stage of LCA is defining the system boundaries. Because LCA
examines flows between the system being examined and its environment (or
another system), it is important to know where that system ends and the
environment (or another system) begins. In addition to spatial boundaries,
temporal boundaries need to be defined, according to Heller. For example,
is the goal to measure impact over the course of a year or over 5 years? For
well-defined technical systems, the boundaries can be fairly straightforward.
But for agricultural and other biological systems, a distinction between a
system and nature (or another system) can be unclear.
Yet another important task of the “goal and scope definition” stage
of LCA is defining the functional unit. Heller described LCA as a relative
tool. That is, the goal is not to examine absolute impacts, rather impacts
relative to some defined unit. The functional unit not only helps to define
how flows across a life cycle relate to each other, but it also allows for
apple-to-apple comparisons across different systems that produce the same
function. Again, with a well-defined technical system, the functional unit
is fairly straightforward. For example, the functional unit of an electrical
system is the kilowatt hour, with a kilowatt hour generated from a solar
panel being relatively the same as a kilowatt hour generated from a coal
plant. But it is not clear what the “true” function of food is. It is much
more difficult to make that type of direct comparison. Heller explained that
many LCAs on food systems have used a reference flow as the functional
unit, for example, product mass or volume. While that may be sufficient for
benchmarking a product, it does not allow for comparisons across different
types of food products. For example, it is difficult to compare a kilogram
of beef with a kilogram of milk. Some researchers have explored ways to
incorporate nutritional value into the functional unit, for example, grams
of protein or caloric value. Foods also have emotional value, although it
is unclear how to incorporate that into the functional unit. Depending on
stakeholder perspective, one might also think of food as having economic
function or environmental function.
Inventory Analysis
The second stage of LCA, inventory analysis, is where Heller said one
really “digs in” and examines all of the relevant material and energy flows.
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UNDERSTANDING MEASURES AND STRATEGIES 17
Again, two different main approaches have evolved. First is the traditional
“process LCA,” which involves examining a very specific product. Heller
described process LCA as a “slow” methodology, one that is very data-
intensive and typically involves examining very specific processes, yielding
very detailed information about a particular product. The second approach,
input-output LCA (IO-LCA), uses economic input and output data, usu-
ally country-level economic data, and involves examining economic flow
between sectors and then connecting those flows with environmental im-
pacts. So rather than looking at a particular type of meat, for example,
IO-LCA looks at all meat products. One of the limitations of IO-LCA is
that economic input and output data are not always available for all life
stages, so some information is missing. Additionally, the level of detail is
coarser than what process LCA yields. An advantage of IO-LCA is that it
takes the full economy into consideration, which means that decisions do
not have to be made about where system boundaries end. IO-LCA captures
all interactions among sectors, regardless of how small the contributions of
each interaction are to the impact being examined.
Regardless of which approach is taken, process or IO-LCA, inven-
tory analysis is a very data-intensive stage. Often, hundreds of different
flows over many dozens of different types of processes are being tracked.
Fortunately, Heller said, there is good software available to help organize
and account for all those data flows (e.g., SimaPro by Pre Consultants and
GaBi by PE International), along with databases that can be used as proxies
for some of the ancillary components of the system life cycle. As just one
example, the U.S. Department of Agriculture has begun converting some
of its agricultural Census data and other information about agriculture
into data that can be used in LCA (e.g., www.lcacommons.gov). When
good data are not available, for example, enteric fermentation data from
ruminant animals, LCA researchers rely on modeling.
In addition to data considerations, another important component of
inventory analysis is allocation. Most processes do not produce single out-
puts, but rather multiple coproducts. This creates a challenge: How should
the various emissions and associated environmental burdens be allocated
among coproducts? ISO established a hierarchical procedure for managing
allocation issues, with their first suggestion being to avoid allocation when-
ever possible, either by dividing the system into subsystems or by expanding
the system. But that is not always possible. For example, it is difficult to
divide the process of producing milk from the process of producing meat.
If allocation cannot be avoided, ISO’s next best suggestion is to reflect the
coproduction in some physical relationship between the products (e.g.,
through energy flows or mass). If that is not possible, the next best sugges-
tion is to reflect it in some other sort of relationship between the products,
for example, through economic value. How allocation is managed can
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18 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
significantly affect the results of an LCA. Heller said, “It is important to
understand when we are looking at an LCA study—what were some of the
decisions that were made here, and how is that influencing what we are
looking at?”
Impact Assessment
The third and final stage of an LCA, impact assessment, involves
interpreting the environmental significance of the examined material and
energy flows. Commonly assessed impacts include energy use, global warm-
ing potential, eutrophication, acidification, and tropospheric ozone. Heller
also listed some other relevant impact categories that have not received as
much attention by LCA investigators: land use, water use, biodiversity, hu-
man toxicity, ecotoxicity, erosion, and landscape quality. Depending on the
impact being examined, spatial information may or may not be important;
for example, the impacts of water use are very spatially dependent. Most
LCAs to date have been conducted without much spatial information.
Two additional tasks one may want to consider during this final stage
of LCA are normalization, which involves comparing impacts from the
system in question to total impacts in a region, and weighting impacts
based on the relative importance to society or a particular stakeholder,
which Heller said has no scientific foundation, but could be useful when
communicating results of the LCA.
Uses of LCA
Heller listed several general uses for LCA. First, it can be used to
identify and evaluate unintended consequences. Second, because of its
comprehensive nature, it can be used to identify and avoid burden shifting
(i.e., avoid shifting burden to other life cycle stages, environmental impacts,
or geographic regions). Third, it can be used to identify hot spots. That is,
where in the life cycle are the bulk of impacts occurring, and therefore,
where should abatement strategies be focused? Fourth, it can be used to
communicate environmental impacts, either to consumers or to other stake-
holders. Fifth, it can be used to examine differences in scenarios. Once an
LCA model has been built, it is easy to examine influences of changes in a
particular scenario on environmental impacts. Finally, LCA is ultimately a
decision-making tool, one that provides decision makers with more infor-
mation. Heller noted that both the European Commission and the EPA have
used LCA. The European Commission has used it to analyze the impacts
of products; the EPA used LCA to determine whether renewable fuels meet
GHG thresholds under the Energy Independence and Security Act of 2007.
With respect to the use of LCA in food and agriculture, Heller observed
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UNDERSTANDING MEASURES AND STRATEGIES 19
that an International Conference on LCA in the Agri-Food Sector has been
meeting since 1996. The group will be meeting for its eighth conference
in October 2012. Its first U.S. meeting will be held in 2014. Additionally,
there have been hundreds of LCA studies of food and agriculture products,
mostly in Europe, although many commodity groups in the United States
are beginning to use LCA as a way to quantify environmental impacts (e.g.,
the Innovation Center for U.S. Dairy is using LCA to examine fluid milk
and cheese). Heller and Keoleian (2003) examined key economic, social,
and environmental sustainability indicators at each life cycle stage of the
U.S. food system (i.e., indicators demonstrating whether the food system is
sustainable). Heller mentioned one result in particular that he said always
strikes him: 30 percent of energy input into the U.S. food system is associ-
ated with household storage and preparation, mostly refrigeration.
Use of LCA in a Study on the Cost of Food:
Opportunities and Challenges
In conclusion, Heller encouraged the use of LCA as a tool for address-
ing at least some questions about the true cost of food. LCA is a compre-
hensive methodology with established methods and standards. Moreover,
not only does it provide a good systematic means to connect production
and consumption, but there are other tools available for connecting LCA
results with costing perspectives. LCA results can also be linked to health
or other additional endpoints, including what Jolliet et al. (2003) refer to
as “damage category” endpoints (see Figure 3-1). So, for example, when
examining climate change as part of an LCA, one might be interested in
further examining how climate change impacts human health or one of the
other damage categories. According to Heller, while linking LCA results to
additional endpoints adds more levels of uncertainty, a number of method-
ologies are available for making those links.
However, the methodology is not without its challenges. Data are cer-
tainly a challenge, as is the need for some of the methods to be refined for
food and agriculture applications. Also, although the focus of LCA is on
environmental impact, the methodology is being expanded to incorporate
some social impacts (social-LCA), including rural community vibrancy,
farmer/worker rights, and eater health (i.e., the impact of the actual food on
health). In Heller’s opinion, use of the methodology for studying food
systems would also benefit from being expanded to incorporate ecosystem
services (see the summary of Scott Swinton’s presentation in Chapter 4 for
discussion on ecosystem services). Currently, LCA is used mostly to assess
the impacts of technical systems on the environment, usually with the goal
of producing more of whatever that system produces for less impact. Agri
cultural systems are more challenging than most of these other technical
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20 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
FIGURE 3-1 Overall scheme of the environmental life cycle impact assessment
framework linking life cycle impact results to midpoint categories to damage
categories.
SOURCE: UNEP/SETAC (adapted from Jolliet et al., 2003).
Figure 2-1
systems. They are ecosystems—and ecosystems typically have distinct carry
ing capacities, or the maximum load that can beof Food indefinitely by
R02326-True Cost supported
the environment without uneditable bitmapped that carrying capacity
deterioration; exceeding image
can have dire consequences, regardless of whether the system is able to
produce more for less impact.
HEALTH IMPACT ASSESSMENT2
HIA is not a single method, but rather a systematic process that uses
a wide array of data sources, analytical methods, and stakeholder input
to determine the potential effects of a proposed policy, plan, program, or
project on the health of a population and the distribution of those effects
within the population. Additionally, HIA provides recommendations on
monitoring and managing those effects. Jonathan Fielding emphasized that
2 This section summarizes the presentation of Jonathan Fielding.
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UNDERSTANDING MEASURES AND STRATEGIES 21
there is no single HIA approach, rather a wide range of HIA approaches.
He discussed the benefits of HIA, described what a typical HIA involves,
and provided some examples of national and local HIAs.
The Benefits of HIA: Opportunity for Intersectoral Collaboration
HIA has many benefits. One of its major benefits is that it brings part-
ners from the non-health and health sectors together so that the impact
of non-health-sector policy decisions on health is considered during the
decision-making process. Fielding observed that many policy decisions in
non-health sectors impact public health. For example, agricultural subsidy
policy can impact the availability of nutritious foods, mass transporta-
tion policy can impact opportunities for walking and bicycling, and envi-
ronmental policy can impact the availability of clean air. HIA can ensure
that health effects are at least on the table for discussion; tip the scales,
adding evidence in favor or against a certain course of action; change the
terms of debate by encouraging transparent decision making and consider-
ation of the best available evidence; tweak plans, with policies modified in
ways that minimize potential harm and maximize potential benefits; bring
new parties to the table that give voice to concerns of affected stakeholders
who otherwise have difficulty making their concerns known; and change
institutional missions and responsibilities. Fielding mentioned the city of
Los Angeles as an example of an institution that has incorporated health
effects as part of its general plan. Now, when thinking about new develop-
ments or policy, potential health effects must be considered. “This seems
pretty obvious,” Fielding said. “But it was actually a major victory to get
health incorporated into the plan.”
In addition to its role in facilitating intersector collaboration, HIA also
highlights potentially significant health impacts that are unknown, under-
recognized, or unexpected; assesses how proposals, policies, and plans will
affect all community members, particularly the most vulnerable; supports
sustainable development by considering both short- and long-term impacts;
and identifies opportunities to enhance health benefits and mitigate harms.
What an HIA Looks Like
There are two kinds of HIA: project-specific and policy-oriented. With
project-specific HIA, the major goal is to gather a wider range of stake-
holder input into the decision-making process and to make the process
more transparent. Policy-oriented HIA affects public policy in a broader
way.
Whether the focus is on a specific project or a broader policy, the HIA
framework has six major steps:
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22 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
1. Screening: getting a preliminary sense of how important a particular
proposal is and whether an HIA would be helpful.
2. Scoping: building what Fielding described as the “logic framework,”
that is, a summary and descriptions of relevant pathways and likely
health effects, research questions, and alternatives to the proposed
action. For example, if the proposed action is widening of a road, is
that really the best approach, or should an increase in mass transit
or other actions also be considered as alternatives?
3. Assessment: determining the baseline health status, analyzing the
beneficial and adverse health effects of the proposed actions and its
alternatives, and integrating stakeholder input into the analysis.
4. Recommendations: identifying alternatives or actions to avoid or
minimize adverse health effects; and proposing a health management
plan to identify who could implement those recommendations and,
more importantly in Fielding’s opinion, monitor implementation of
the HIA recommendations.
5. Reporting: documenting the HIA and communicating results and
recommendations to decision makers, the public, and stakeholders.
HIAs come in many forms. An HIA can be a comprehensive 200-
page report, a 2-page policy brief, a “logic framework” and support-
ing discussion showing causal pathways, a checklist completed by
an agency or policy makers, a spreadsheet or “calculator” allowing
users to estimate health impacts for different scenarios, or a process
for guided community engagement that results in testimony given to
a policy-making body.
6. Monitoring and evaluation: evaluating whether the HIA was con-
ducted according to plan and applicable standards, whether the
HIA influenced the decision-making process, and, when practica-
ble, whether implementation actually changed health indicators as
expected.
Although the National Environmental Policy Act of 1969 requires an
analysis of health effects of proposed actions,3 Fielding said the requirement
was not enforced. Had it been enforced, HIA as a key set of approaches to
considering health effects would have probably come into use much earlier.
However, the HIA “movement” didn’t really start until the mid-1980s in
Europe. In the United States, the methodology did not really pick up until
around 2000, with only about three dozen U.S. HIAs conducted by the mid-
2000 decade. Many more have been conducted since then—both project-
specific and policy-oriented HIAs. Most of the growth has been local, with
86 registered HIAs in 2012 being local, 18 state-level, and 6 federal-level.
3 42 U.S.C. §§ 4321-4347.
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UNDERSTANDING MEASURES AND STRATEGIES 23
Today, HIA plays an important role in the assessment, monitoring, evaluat-
ing, and dissemination component of Healthy People 2020.4
Examples of HIA
As an example of a national-level, policy-oriented HIA, Fielding de-
scribed the results of an HIA on the 2002 Farm Bill and its expected health
effects on the U.S. population (Partnership for Prevention/UCLA School of
Public Health, 2004). Fielding and colleagues identified five major path-
ways through which the new legislation was expected to impact health:
(1) rural income and quality of life; (2) dietary consumption patterns;
(3) food safety; (4) environmental pollution; and (5) other environmental
degradation. Investigators focused their analysis on two pathways: dietary
consumption patterns and environmental pollution. Specifically, they asked
whether dietary consumption patterns would be affected by the Farm Bill
subsidy policy and whether air pollution would be affected by ethanol pro-
duction. Results of the HIA indicated, first, that changes in commodity sup-
ports would have little, if any, effect on consumer prices and consequently
consumption, primarily because commodity price is only a small portion
of the consumer price for most foods; second, that the air pollution effects
of the production of ethanol were uncertain.
Fielding emphasized the importance of repeating HIA when new in-
formation becomes available. When the 2002 Farm Bill analysis was con-
ducted, competing models yielded contradictory results with respect to the
air pollution effects of ethanol production. Since then, more recent data
have become available that show a negative effect given current production
technology.
As an example of a local policy-oriented HIA, Fielding described an
LA County HIA of a county government food procurement policy on so-
dium reduction (Gase et al., 2011).5 LA County government is large and
complex, with over 101,000 employees and 37 departments. The county
4 Launched in 2010, Healthy People 2020 is a U.S. government 10-year goal for health
promotion and disease prevention. As Fielding explained, the Healthy People 2020 ecological
model of health is an action model, with interventions (i.e., policies, programs, information)
impacting not just individual behavior, but also social networks (including family and com-
munity networks), living and working conditions, and broader environmental and other condi-
tions (broad social, economic, cultural, health, and environmental conditions and policies at
the global, national, state, and local levels). HIA is used to monitor various health outcomes
and decide which interventions to support.
5 Food procurement policy is only one component of the effort to reduce sodium intake.
The county is also participating in a national coalition that is encouraging food processors to
voluntarily reduce sodium in their foods, and communicating with the U.S. Food and Drug
Administration about changing sodium from a generally recognized as safe food to another
type of food.
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24 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
operates many food service venues and contracts with many food service
vendors across its 87 regional and local parks, 344 miles of trails, 19 public
golf courses, and a multitude of beaches, museums, libraries, theaters, pris-
ons, juvenile prisons, juvenile detention centers, and probation camps. In
2009-2010, the county conducted an HIA to evaluate the likely impact of
food procurement policies on sodium intake among patrons at LA County
venues. HIA investigators estimated the reach of food procurement poli-
cies (e.g., county hospital cafeterias serve about 600 adults per day, senior
meals programs serve about 9,200 adults per day, child care venues serve
about 24,000 children per day, and other county cafeterias serve about
1,800 adults per day); gathered qualitative data and input from county food
service vendors; and mathematically simulated the effects of varying levels
of sodium reduction on mean systolic blood pressure (SBP). Preliminary
findings predicted that adults eating at county food service venues that
reduced sodium levels would consume 233 fewer milligrams of sodium per
day, corresponding to a reduction in SBP among adults with hypertension,
fewer cases of uncontrolled hypertension, and lower costs of treatment.
Thus, the HIA investigators concluded that food procurement policy could
have a positive health impact in LA County.
Opportunities and Challenges for Using HIA
in a Study on the Cost of Food
In conclusion, Fielding emphasized that HIA is only one of many tools
that can be used to inform and improve health policies. But one of its great-
est strengths is the opportunity it provides for intersectoral collaboration.
He said, “In our experience it has really moved health into discussions in
other sectors where we know that there are health impacts of decisions,
but health effects have really not been considered.”6 But it is not without
its challenges. In many cases, HIA yields only qualitative results or quan-
titative results with very wide confidence intervals. Its applicability is also
challenged by the complexity of relationships between determinants and
health outcomes; the lack of research on many causal pathways; the lack
of sufficient data on interventions to improve health status; and the lack of
reliable and valid indicators of environmental effects.
ENVIRONMENTAL CONSEQUENCES7
Measuring the cost of food is a complex, multidisciplinary challenge—
one without a magic fix or solution. “We are all groping for how to deal
6 Fielding referred workshop attendees to the UCLA Health Impact Assessment Clearing-
house Learning and Information Center website: www.HIAguide.org.
7 This section summarizes the presentation of John Antle.
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UNDERSTANDING MEASURES AND STRATEGIES 25
with [it],” John Antle remarked. Antle shared some thoughts about the
challenges of valuing social costs and benefits and discussed the opportuni-
ties and challenges of a multidimensional impact assessment modeling ap-
proach that he and colleagues have been using to quantify environmental
externalities, one that considers not just environmental but also economic
and social outcomes.
The Challenge of Valuing Social Costs and Benefits
Traditional agricultural policy is focused on farmer income. Antle
speculated on how consideration of the cost of food shifts the focus to a
different set of questions that revolve not around transferring income to
farmers, rather on social well-being: First, are we producing and consum-
ing the right amounts of food in the right ways? Second, given that many
experts would agree that the answer to the first question is no, what can be
done to correct the problem(s)?
Antle explained that economists address these questions by thinking in
terms of social costs and benefits and attaching value to them. He observed
that there is a huge body of empirical research that at least attempts to
quantify both negative externalities (i.e., social costs) and positive externali-
ties (i.e., social benefits) associated with agricultural production and food
systems. Much of the work to date has focused on farm-level production,
as opposed to components of the food system that reside beyond the farm.
Despite these efforts, quantifying social benefits and costs in a meaningful
way, that is, in a way that can inform public policy, remains tremendously
challenging.
Even deciding whether an externality is positive or negative can be
challenging. For example, water contamination associated with agriculture
could be considered either a positive or negative externality depending
on how property rights are initially assigned. One could consider farmers
the “bad guys” and tax them accordingly, or as “stewards of the land”
and pay them to do more good. In this example, the property rights issue
is whether farmers have a right to use fertilizer. If the answer is no, then
farmers who pollute the water should be penalized for doing so. But if the
answer is yes, that is, if farmers have the right to use fertilizer, then farmers
who use less fertilizer should be compensated for the cost they will bear
associated with using less fertilizer. A related challenge is understanding
how the economic agents that create the externalities, that is, the farmers,
respond to policy intervention. According to Antle, modeling that response
to policy is another “big part” of what economists do in their effort to
answer these questions.
Added to the challenge of quantifying externalities is the reality that, as
Antle put it, “There is a lot more to life than externalities.” He suggested
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26 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
that food policy may need to address the broader set of factors that people
care about, such as food quality or animal welfare.
Additional Tools for Quantifying the Cost of Food
In addition to LCA and HIA, Antle identified two additional tools for
quantifying externalities: (1) cost-benefit analysis and (2) multidimensional
impact analysis. Additionally, regardless of methodology, he encouraged
more appreciation for qualitative considerations and how those could be
added to the “quantitative toolbox.” Many environmental outcomes, like
biodiversity, are difficult to quantify.
Cost-Benefit Analysis
Cost-benefit analysis involves valuing all benefits and costs in monetary
terms and then adding those values. The method is limited by many fac-
tors, including distributional issues (i.e., the distribution of benefits and
costs), the timing of benefits and costs (i.e., comparing current versus future
benefits and costs), and valuation. Antle noted that the issue of valuation
is especially challenging when considering the cost of food. It is not clear
whose values should be used. Another major challenge is aggregation across
outcomes, that is, measuring all outcomes in terms of one metric (e.g.,
measuring all GHG emissions in terms of carbon equivalents). The chal-
lenge of aggregation is what led Antle to his work on what he calls “mul-
tidimensional impact assessment.” Also, Antle questioned the practicality
of adding all of the positive and negative externalities associated with food
into a single sum, as a cost-benefit analysis would do. He suggested focus-
ing on a small number of key indicators, being careful not to leave out any
important ones, and understanding those indicators well enough that their
estimated values can actually have a policy impact.
Multidimensional Impact Assessment
Multidimensional impact assessment is a modeling methodology that
takes into account economic, environmental, and social impacts—what
Antle referred to as the “three pillars of sustainability.” The approach
involves quantifying key indicators and their relationships, with a focus
on trade-offs and synergies. The approach typically involves coupling an
ecosystem model with an economic behavioral model and examining and
understanding the underlying processes well enough to predict what will
happen in response to a policy, price, or other change. Predictions can be
made at regional, national, or even global levels. Regional predictions can
be made with fairly good site-specific detail. For example, using counties
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UNDERSTANDING MEASURES AND STRATEGIES 27
as the basic spatial unit, Antle and Ogle (2012) linked what is known as a
century ecosystem simulation model (a model used for examining soil car-
bon dynamics) to an economic behavioral model and examined the effects
of no-till production on GHG emissions, taking into account not just soil
carbon, but also nitrous oxide emissions and fuel use.
Data and Modeling Challenges
A major limitation of impact assessment is dimensionality. As Antle ex-
plained, trying to quantify trade-offs among 30 key indicators can become
extraordinarily difficult. Another major challenge is the heterogeneous na-
ture of agricultural systems. For example, there is considerable heterogene-
ity even in the corn-soybean world of Iowa or in the wheat-fallow-livestock
rangeland systems of the Great Plains. Not only are agricultural systems
spatially heterogeneous, but they are also temporally dynamic. Together,
this spatial and temporal variation creates very serious analytical challenges
to measuring environmental externalities.
In addition to the analytical challenge of quantifying multiple envi-
ronmental outcomes across space and time, collecting enough high-quality
data to conduct those analyses in the first place can also pose a challenge.
This is true even though the availability and quality of some types of data
have improved over time. For example, farm-level agricultural census and
other data are now available (e.g., Agricultural Resource Management
Survey data, jointly collected and managed by the Economic Research Ser-
vice [ERS] and the National Agricultural Statistics Service [NASS]). Also,
remotely sensed data are yielding more accurate annual land use and crop
yield data, improving the capability to not only conduct multidimensional
impact assessment modeling, but also make it more dynamic. Yet, at the
same time, federal government budget constraints are reducing availability
of other types of data. Antle mentioned that he has not been able to access
data more recent than the 2007 version of the National Resources Inven-
tory, which he said used to be a heavily used data source (the database is
currently being revised). He said, “If we really want to get at this question
of the true cost of food, good data are going to be really essential.”
Added to its analytical and data challenges, impact assessment is made
difficult by funding and institutional constraints to transdisciplinary team
building. It is also costly, Antle cautioned. Indeed, in Antle’s opinion, the
cost of analysis is “one of the big issues” to consider when planning a study
on the cost of food.
Yet another challenge is the lack of a systematic approach to model
development, comparison, and improvement—in other words, as Antle put
it, to “making this modeling research really good science.” He mentioned
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28 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
the Agricultural Model Intercomparison and Improvement Project and its
efforts to compare and integrate different modeling approaches.
PUBLIC HEALTH CONSEQUENCES8
Based on his work with risk assessment, James Hammitt views health
as depending on three sets of factors: (1) exposure to physical, chemi-
cal, biological, and social agents and stressors; (2) behavior that reduces
exposure or mitigates the effects of exposure, with the ability to avert or
mitigate exposure depending on income, information, and other resources;
and, more broadly, (3) the food production-distribution-consumption sys-
tem, which can affect both exposure and behavior. As examples of how
the system itself impacts health, specific foods have constituents and con-
taminants that affect health; overall diet affects health; and the food system
itself can impact disposable income, with a higher cost of food reducing
the amount of disposable income available for other, health-protective
measures. Hammitt discussed how risk assessment can be used to analyze
exposures to stressors in the food system and their impact on health, and
identified major sources of data for conducting risk assessments. He also
offered some general thoughts on defining externality in the context of
noneconomic behavior.
Risk Assessment
Risk assessment involves analyzing how exposures to various stress-
ors influence the probability of morbidity and mortality. Risk assessment
involves three steps: (1) identify exposure; (2) calculate exposure-response
functions; and (3) attach value.
Identify Exposure
Hammitt identified five major exposure pathways in the food system:
(1) production and processing (i.e., exposure to nutrients, contaminants, and
pesticides in food; waste streams from production and processing facilities;
and energy pathways related to production and processing); (2) packaging
(i.e., exposure to contaminants in packaging, and to energy pathways related
to packaging); (3) distribution (i.e., exposure to energy pathways related to
distribution); (4) preparation (i.e., exposure to nutrients and contaminants
influenced by how food is prepared and to environmental pollution related
to energy use); and (5) consumption (i.e., exposure to nutrients, contami-
nants, and pesticides in food, and to overall diet).
8 This section summarizes the presentation of James Hammitt.
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UNDERSTANDING MEASURES AND STRATEGIES 29
Hammitt noted that his list of exposure pathways was “not very well
researched” and that his intention was for the list to be “provocative.”
Another public health effect to consider that he said does not really fit into
any one of these five pathways is antibiotic resistance. He suggested that
one way to analyze antibiotic resistance is by examining the distribution of
resistant microbial strains and the ways that people can come into contact
with those strains (i.e., the chance of infection from all possible pathways).
Calculate Exposure-Response Function
After identifying exposure, the next step is to calculate what is known
as the exposure-response function, that is, the probability of an adverse
health effect given exposure to a certain quantity of stressor.
Attach Value
The third and final step is valuation. Because multiple health effects can
arise, with the same food sometimes having both “good” and “bad” effects
(e.g., eating fish can be cardio-protective because of its omega-3 fatty acid
content, while at the same time serving as a major exposure pathway to
methyl mercury, which has negative health effects), valuation involves ag-
gregating those effects not just for individuals, but also across a population
(the “social aggregation problem”). Economists attach value in one of two
ways: via either monetary value (i.e., willingness to pay [WTP]); or health
utility (i.e., quality-adjusted life years [QALYs], value per statistical life, or
a related concept).
Analyzing Health Effects
Hammitt offered some thoughts on how one might use risk assessment
to analyze health outcomes associated with four major sources of exposure:
(1) diet; (2) nutrients, contaminants, and pesticides; (3) energy; and (4)
waste streams.
Diet clearly affects the risk of many diseases and health effects, from
cardiovascular disease to obesity, not just for the person actually consum-
ing any given diet, but also for his or her offspring. The major source of
information for analyzing those effects is epidemiological data. Hammitt
commented on how diet itself is affected by many factors, including prices
and convenience (i.e., as determined by availability, distribution, and prepa-
ration), consumer information about the consequences of eating different
types of foods, and traditions and customs. To examine how these many
factors impact diet, Hammitt speculated that the major data sources would
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30 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
be economic (e.g., demand system modeling, social science methods that
determine how people perceive risk and choose diet).
With respect to exposure to nutrients, contaminants, and pesticides,
Hammitt noted that the effects can be either positive or negative and that
some substances may have positive or negative effects depending on dose.
For example, many nutrients are beneficial at low levels, but harmful at
higher levels. Additionally, some contaminants and pesticides may have
safe exposure thresholds, below which there is no risk of adverse effect.
Major sources of information for analyzing these effects include epidemiol-
ogy and toxicology data. One of the challenges to collecting and analyzing
these types of data is that the dose-response function is often unknown or
unreported. While some nutrients have established tolerable upper levels
(ULs), above which risk for adverse effects increases, for other nutrients,
not enough data were available to establish ULs.
All stages of the food life cycle use commercial energy. Hammitt iden-
tified production and processing, packaging, and possibly distribution as
the most energy-intensive stages, with the main exposure pathways being
environmental release of stressors, mostly air pollutants. The major source
of exposure is fossil fuel combustion (i.e., for electricity production, farm
vehicle transportation, etc.), with particulate matter and, to a lesser extent,
ozone precursors being especially problematic. Even after consumption,
waste disposal and clean-up processes use energy (e.g., hot water to wash
dishes), although it is unclear whether postconsumption energy use is quan-
titatively significant. Upstream pollution associated with producing these
fuels in the first place is another source of exposure to consider. Hammitt
remarked that research on these phenomena is a fairly well-developed field,
with major information sources being epidemiology; and fate, transport,
and exposure modeling.
Finally, waste streams are another important type of food-related ex-
posure pathway. Waste streams include waste from livestock and fertilizer/
pesticide run-off from fields. Waste stream exposure pathways include air
emissions; water exposure (i.e., through drinking, bathing, swimming); and
food contamination (e.g., livestock waste is the source of many bacterial
outbreaks in vegetables). Again, data for studying these types of exposure
and their health effects come from epidemiology; toxicology; and fate,
transport, and exposure modeling.
Valuing Health Effects
There are two conventional approaches to valuing health effects. The
first is a money measure: WTP, or willingness to accept compensation for
change. In economic parlance, WTP is the change in wealth that one is will-
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UNDERSTANDING MEASURES AND STRATEGIES 31
ing to accept to increase his or her survival probability by a certain amount.
WTP is widely used in environmental and transportation applications. The
second approach is based on health utility: QALYs. QALYs are a measure
of the trade-off between health (or, more specifically, health-related quality
of life, with “0” being death and “1” being optimal health) and longev-
ity. QALYs are estimated using what is known as a health profile, that is,
a graph with time on the x-axis and health-related quality of life on the
y-axis, and with total QALYs being equal to the area under the curve.9
QALYs are widely used in public health and medical applications.
A key question to consider when thinking about these two different ap-
proaches is whether they are consistent with the preferences of the affected
people. Hammitt explained how economists traditionally have considered
individuals to be the best judges of their own interests and determined
whether a policy is going to improve someone’s situation by asking him or
her whether they think they would be better off with the policy in place. He
said, “It seems like it is very important, if we are trying to measure welfare
that the welfare measure ought to at least have something to do with the
preferences of the people whose welfare we are trying to affect.” A signifi-
cant difference between the money measure and health utility approaches
is that the health utility approach is based on assumptions about individual
preferences that are reasonable on average, but clearly false at the individ-
ual level. For example, one assumption is that the trade-off between health
and length of life that QALYs measure is independent of wealth (i.e., that
the fraction of one’s lifetime one would give up to be free of some disability
is independent of whether one can afford technologies that help offset the
disability, such as reading glasses or electric wheelchairs), an assumption
that Hammitt said does not make much sense either theoretically or empiri-
cally. WTP is less constrained and more accurately reflects individuals’ own
preferences. So, for example, even if the risk of cancer from smoking were
exactly the same as the risk of cancer from pesticides in food, an individual
might have different preferences for those two risks and, therefore, differ-
9 During the question-and-answer period, Hammitt explained that QALYs are estimated
by surveying and interviewing people. People are asked three general types of questions: (1)
Respondents are asked to rate their health on a scale from 0 to 100. (2) They are asked what
is called a “time trade-off” question. For example, they are asked to assume that they are going
to live the rest of their life, say 40 years, in a specific health state with a chronic illness and
decide at what point they would exchange that future life for a shorter life in perfect health.
(3) Respondents are asked what is called a “standard gamble” question. They are asked to
imagine living the rest of their life in an impaired health state and being given the option for a
treatment that would either restore their health or cause death. Surgery is a good example of
this type of treatment, that is, one with an up-front mortality risk. Hammitt said that there is
a lot of “noise” associated with each of these three questions, but that they generally provide
the same answers.
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32 EXPLORING HEALTH AND ENVIRONMENTAL COSTS OF FOOD
ent willingness to pay to reduce those risks. WTP would account for those
different preferences, while QALY would not. However, to the extent that
people are confused about their own preferences, empirical estimates of
WTP are more susceptible to fuzzy thinking.
But when is it appropriate to harm some people in order to provide
benefits to others? The implicit social objective to increasing QALYs is to
maximize total health and longevity in a population. A policy that provides
more total QALYs to one subpopulation is viewed as better than a policy
that provides fewer total QALYs to another subpopulation, regardless of
the number of people in each group and their characteristics. The same
situation occurs with WTP. The implicit social objective to making a policy
based on WTP is to maximize total WTP, independent of the number and
characteristics of the people who benefit.
Defining Externality in the Context of Noneconomic Behavior
The concept of externality is not well defined outside the classical eco-
nomic model—that is, when individuals do not behave as fully informed
rational agents as economic theory assumes they do. Hammitt identified
several questions to consider before embarking on a study of the external
costs and benefits of food. First, when human behavior differs from what
an economic model assumes, how should externality be defined? Will the
study really be about externalities, or will it be about consequences? Why
focus on externalities? Is it because, if all externalities could be internal-
ized, then the outcome would be efficient? While that may be the case in a
simple economic model, it is not true in the real world. In the real world,
nonmarket influences affect how people behave. For example, information
asymmetry, that is, where people do not know about the properties of vari-
ous foods or the risks of different diets, influences eating. Another major
nonmarket influence is the social network or environment, as people are
influenced by what other people in their social networks do. Another ques-
tion to consider is whether health risks from poor diets are internalized or
not. At the simplest, one can assume that consumers are the best judge of
their own interests. But again, behavioral economics and related research
suggest that people do not behave as simple economic theory assumes they
do. People behave inconsistently over time and exhibit limited self-control,
for example, by procrastinating (i.e., eating badly today while promising to
eat better tomorrow). It is unclear whether the health risks associated with
those behaviors constitute externalities.
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UNDERSTANDING MEASURES AND STRATEGIES 33
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no-till adoption. Climatic Change 111(3):609-625.
Gase, L. N., T. Kuo, D. Dunet, S. M. Schmidt, P. A. Simon, and J. E. Fielding. 2011. Estimating
the potential health impact and costs of implementing a local policy for food procurement
to reduce the consumption of sodium in the County of Los Angeles. American Journal
of Public Health 101(8):1501-1507.
Heller, M., and G. Keoleian. 2003. Assessing the sustainability of the U.S. food system: A life
cycle perspective. Agricultural Systems 76:1007-1041.
Jolliet, O., A. Brent, M. Goedkoop, N. Itsubo, R. Mueller-Wenk, et al. 2003. Final report of
the LCIA definition study. http://www.lca-net.com/files/LCIA_defStudy_final3c.pdf (ac-
cessed October 19, 2012).
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