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The Simple Economics of an Environmentally Conscious Diet

I'm not really here to talk about my dietary choices or even to advocate for my specific type of environmentally-conscious diet. I am relatively new to this, and I am sure I do not have all the facts. I am certainly not qualified or consistent enough to expound a detailed diet that is guaranteed to have the best effect on the environment.


Vegans have been guilty at times of inappropriately and condescendingly preaching the vegan way (something I too have probably been guilty of at times). You may have encountered that 'annoying vegan' who cannot stop talking about it. On the other side, there has been a lot of hate for vegans and vegetarians from the more carnivorously inclined, often with puzzlingly unnecessary fervour. I do believe that our diets need to be much more environmentally conscious and that the current 'normal' diet is not sustainable. Why I espouse this belief is probably the subject of another post. I do see merit in both sides' complaints with the other but I'm not here to add to the endless debate right now.

There is, however, one thing people do that I find ill-informed. It’s something I get often and I'm sure I'm not the only one. It’s that classic response to when I say I won't eat something for environmental reasons: "Why? You won't make any difference all by yourself." The notion that an individual's dietary choices are insignificant and cannot change the world. This is not only naïve and fatalistic, but it’s also incredibly pessimistic. The reason I believe singular dietary choices can create and help solve climate change is simple: economics.


There is an economic theory that I guess you can say, in this regard, proves that one person can, in fact, change the world. It is the 'first-mover problem'. It is essentially the 'chicken and egg problem'. Let’s say the best dietary choice is veganism. What comes first, vegan-friendly food or vegans? People do not become vegans if there is no vegan food or enticing vegan alternatives to eat and producers will not supply vegan food if there are no vegans. So you get stuck at the beginning, static, waiting for the other to move. If you, as a single individual, choose to become vegan, or any other environmentally-conscious diet, you make the first move. You will not move the market all by yourself, but without you, the market will not move.


Another way to explain this is through one of the most common of economic concepts. Supply and demand. A lot of people complain that they could not follow an environmentally-conscious diet even if they wanted to because there is no variety or even available food for them. But supply is a function of demand. It is only once demand increases that supply can rise concomitantly. So it is only once an individual decides to try out the diet, searches for and purchases applicable food, that the market can register that there is demand for those products. Once there is sufficient demand, that is when suppliers and restaurants begin to offer environmentally-conscious meals. But what about prices? Once both demand and supply rise, as economic theory dictates, prices should shift upwards and those products should become more expensive. Now, this is already a legitimate concern and limitation for those who would want to try this diet out. Vegan and vegetarian meals are already relatively expensive and quite inaccessible to those under financial constraints. And so, as demand and supply continue to increase we would theoretically see prices rise further and further unsustainably. Luckily, this is only an initial hurdle and the beauty of competition would come to the rescue. If prices are high, and suppliers have large profit margins (Beyond Meat, a $7.8bn plant-based meat company, made around a 33%-35% profit margin in 2020), there is room for competition. Prices out of equilibrium and high demand for the products are the perfect conditions for competitors to enter the market. Then either the new suppliers will steal consumers with lower prices, or the incumbents will undercut the new entrants by dropping prices. Either way, prices will drop. This price drop is ,however, dependant on one essential element. It must begin with demand and without subsidisation, it must begin with an individual.


This is also not to mention the incredible power of collective effort, made up by individuals, by those with a common goal. Collective effort has achieved revolutionary things in the past, changing governments, cultures and societies for the better, why would this be any different?


Yes, in the literal sense of it, one person may not be able to change the world in this regard. But this ignores the chain effects an individual can have and how, without that individual effort, mountains cannot move. So the next time you get this question, please be assured that your actions do matter, and take comfort in the fact that you (and your mouth) can make a difference. In fact, I would argue that each decision, each meal, makes all the difference.








References:

https://www.ft.com/content/d30ca8e1-5c91-4d84-a2c2-f747fdb8ae0b

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