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Calculation of external climate costs for food highlights inadequate pricing of animal products.

ABSTRACT: Although the agricultural sector is globally a main emitter of greenhouse gases, thorough economic analysis of environmental and social externalities has not yet been conducted. Available research assessing agricultural external costs lacks a differentiation between farming systems and food categories. A method addressing this scientific gap is established in this paper and applied in the context of Germany. Using life-cycle assessment and meta-analytical approaches, we calculate the external climate costs of foodstuff. Results show that external greenhouse gas costs are highest for conventional and organic animal-based products (2.41€/kg product; 146% and 71% surcharge on producer price level), followed by conventional dairy products (0.24€/kg product; 91% surcharge) and lowest for organic plant-based products (0.02€/kg product; 6% surcharge). The large difference of relative external climate costs between food categories as well as the absolute external climate costs of the agricultural sector imply the urgency for policy measures that close the gap between current market prices and the true costs of food.

SUBMITTER: Pieper M

PROVIDER: S-EPMC7738510 | biostudies-literature | 2020 Dec

REPOSITORIES: biostudies-literature

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Calculation of external climate costs for food highlights inadequate pricing of animal products.

Pieper Maximilian M Michalke Amelie A Gaugler Tobias T

Nature communications 20201215 1

Although the agricultural sector is globally a main emitter of greenhouse gases, thorough economic analysis of environmental and social externalities has not yet been conducted. Available research assessing agricultural external costs lacks a differentiation between farming systems and food categories. A method addressing this scientific gap is established in this paper and applied in the context of Germany. Using life-cycle assessment and meta-analytical approaches, we calculate the external cl ...[more]

PMID: 33323933

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Project description:External reference pricing (ERP) is a price regulation tool widely used by policy makers in the European Union (EU) Member States (MS) to contain drug cost, although in theory, it may contribute to modulate prices up and down. The objective of this article was to summarise and discuss the main findings of part of a large project conducted for the European Commission ('External reference pricing of medicinal products: simulation-based considerations for cross-country coordination'; see www.ec.europa.eu/health/healthcare/docs/erp_reimbursement_medicinal_products_en.pdf) that aimed to provide an overview of ERP systems, both on processes and potential issues in 31 European countries (28 EU MS, Iceland, Norway, and Switzerland). A systematic structured literature review was conducted to identify and characterise the use of ERP in the selected countries, to describe its impact on the prices of pharmaceuticals, and to discuss the possible cross-country coordination issues in EU MS. This research was complemented with a consultation of competent authorities' and international organisations' representatives to address the main issues or uncertainties identified through the literature review. All selected countries applied ERP, except the United Kingdom and Sweden. Twenty-three countries used ERP as the main systematic criterion for pricing. In the majority of European countries, ERP was based on legislated pricing rules with different levels of accuracy. ERP was applied either for all marketed drugs or for specific categories of medicines; it was mainly used for publicly reimbursed medicines. The number of reference countries included in the basket varied from 1 to 31. There was a great variation in the calculation methods used to compute the price; 15 countries used the average price, 7 countries used the lowest price, and 7 countries used other calculation methods. Reported limitations of ERP application included the lack of reliable sources of price information, price heterogeneity, exchange rate volatility, and hidden discounts. Spill-over effect and downward price convergence have often been mentioned as ERP's consequences leading to pricing strategies from pharmaceutical companies. While ERP is widely used in Europe, processes and availability of price information vary from one country to another, thus limiting ERP implementation. Furthermore, ERP spill-over effect is a major concern of pharmaceutical firms leading to implementation of the so-called 'launch sequence strategies'.

Project description:The nutritional quality of animal products is strongly related to their fatty acid content and composition. Nowadays, attention is paid to the possibility of producing healthier foods of animal origin by intervening in animal feed. In this field, the use of condensed tannins as dietary supplements in animal nutrition is becoming popular due to their wide range of biological effects related, among others, to their ability to modulate the rumen biohydrogenation and biofortify, through the improvement of the fatty acids profile, the derivate food products. Unfortunately, tannins are characterized by strong astringency and low bioavailability. These disadvantages could be overcome through the microencapsulation in protective matrices. With this in mind, the optimal conditions for microencapsulation of a polyphenolic extract rich in condensed tannins by spray drying using a blend of maltodextrin (MD) and gum Arabic (GA) as shell material were investigated. For this purpose, after the extract characterization, through spectrophotometer assays and ultra-high-performance liquid chromatography-quadrupole time-of-flight (UHPLC-QTOF) mass spectrometry, a central composite design (CCD) was employed to investigate the combined effects of core:shell and MD:GA ratio on the microencapsulation process. The results obtained were used to develop second-order polynomial regression models on different responses, namely encapsulation yield, encapsulation efficiency, loading capacity, and tannin content. The formulation characterized by a core:shell ratio of 1.5:5 and MD:GA ratio of 4:6 was selected as the optimized one with a loading capacity of 17.67%, encapsulation efficiency of 76.58%, encapsulation yield of 35.69%, and tannin concentration of 14.46 g/100 g. Moreover, in vitro release under varying pH of the optimized formulation was carried out with results that could improve the use of microencapsulated condensed tannins in animal nutrition for the biofortification of derivates.

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Calculation of external climate costs for food highlights inadequate pricing of animal products.

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Calculation of external climate costs for food highlights inadequate pricing of animal products.

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