BOX 1-1
Externality as Defined by Individual Speakers

Katherine Smith defined externality as

a cost or benefit not transmitted through prices that is incurred by a party who did not agree to the action causing the cost or benefit.

James Hammitt referred to the definition of externality laid out in the National Research Council (2010, p. 29) report The Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use:

An externality, which can be positive or negative, is an activity of one agent (for example, an individual or an organization, such as a company) that affects the well-being of another agent and occurs outside the market mechanism.

a public workshop on April 23-24, 2012, to explore the external costs of food, methodologies for quantifying those costs, and the limitations of the methodologies.

The workshop was intended to be an information-gathering activity only. Given the complexity of the issues and the broad areas of expertise involved, workshop presentations and discussions represent only a small portion of the current knowledge and are by no means comprehensive. The focus was on the environmental and health impacts of food, using externalities as a basis for discussion and animal products as a case study (i.e., specifically beef, poultry, pork, and dairy). The intention was not to quantify costs or benefits, rather to lay the groundwork for doing so. A major goal of the workshop was to identify information sources and methodologies required to recognize and estimate the costs and benefits of environmental and public health consequences associated with the U.S. food system (see Box 1-2). It was anticipated that the workshop would provide the basis for a follow-up consensus study of the subject and that a central task of the consensus study will be to develop a framework for a full-scale accounting of the environmental and public health effects for all food products of the U.S. food system.

Nor was the intention to make any recommendations or suggest policies. Rather, again, it was to lay the groundwork for future efforts. According to Anne Haddix, senior policy advisor at CDC’s National Center for Disease Prevention and Health Promotion, the hope is that a framework can be built that will help to identify novel strategies for dealing with food system-related public health problems, such as obesity, in ways that are not only healthful, but also environmentally sound and economically produc-



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