NEWS ARTICLE If you've even dipped a toe into the conversations about our food system, you've heard that our cheap food - and it is very cheap - doesn't reflect the true costs of growing it and eating it. Food has consequences! In the process of producing it, we pollute land and water, release greenhouse gases, expose farmworkers to pesticides, deforest forests and erode topsoil - and that's before we turn the crops into the foods that have made us fat and sick. By a recent Rockefeller Foundation accounting, those things nearly triple the $1.1 trillion Americans spend on food. Economists call those consequences "externalities," and that word has entered the mainstream conversation about food. The idea that food prices should reflect its true cost is popular. But how do we go about doing that? Should we increase the price of food, or should we try to decrease the externalities? Talk to economists, and it's a little of both. I talked to two, at opposite ends of the political spectrum. Jayson Lusk, who heads the agricultural economics department at Purdue University, is refreshingly candid about the political split: "Ideology and perspective on how much government should regulate comes into this." Lusk describes himself as "libertarian leaning," and he believes market solutions generally work better than government solutions. Will Masters is a professor of nutrition and economics at Tufts University and describes his politics as liberal. He believes in "better living through government" and is upfront about how his leanings influence his economic ideas. The two know, and speak highly of, each other. So, here at Kumbaya Central, I figure if Lusk and Masters agree about things, those things are probably reasonable and may even have a snowball's chance of being implemented. Here are four areas where we might be able to get agreement across the political spectrum. We'll start small, and easy: 1. R&D on cattle methane Who do you think said: "I would be very much in favor of the government spending R&D money to reduce methane in cattle"? That's right, libertarian Lusk. I asked him about it because more research and development on the issue is a favorite solution of liberal Masters. Couldn't get starker agreement than that. But if you're looking for disagreement, just say out loud that cattle are the biggest contributor that food makes to climate change. Cue the meat wars! For the record, cattle have benefits, too! They can convert grass to human food. Properly grazed, they can sequester carbon and contribute to soil health. But because of the methane cattle generate and the deforestation that the growing demand for beef drives, they are a net climate minus, more so than any other food. It's just math. And if we can change the equation by rejiggering a cow's diet or habits or DNA, that reduces cattle's environmental impact - and the true cost of beef goes down. After this one, it gets stickier. 2. Regulate pollution Even hardcore capitalists acknowledge that capitalism is ill-equipped to deal with pollution. If polluting is profitable, markets don't provide many disincentives for it. We need government for that, and Lusk cites the successful Clean Air Act of 1970 as precedent. Why can't we regulate nitrogen runoff and greenhouse gas emissions like the Clean Air Act regulates particulate matter and carbon monoxide? Lusk is on board in principle. Masters is on board with enthusiasm: "I support direct regulation of activities that cause both nitrogen/phosphorus runoff, and also carbon/methane emissions." Unfortunately, those are harder problems than air pollution. "Uncertainty" is the word Lusk uses. Compared to pollution from, say, a manufacturing plant, greenhouse gases and water pollution from agriculture are difficult to measure. But if the government shies away from regulation on the grounds of uncertainty and leaves those harmed to try things like lawsuits (the water utility of Des Moines tried it, and failed), it hardly seems fair. If we do regulate pollution from agriculture, it's likely to drive the cost of food up, but before you balk, a dead zone in the Gulf of Mexico the size of Connecticut would like a word. Greenhouse gases are changing the climate, and there's near-universal agreement that food is responsible for about a third of the emissions. It'll be very hard to nail down regulatory specifics, but I think we should be trying anyway. And regulation isn't the only way. 3. Attach strings to subsidies Subsidies to farmers come to between $10 billion and $20 billion per year. When I asked Lusk whether it would be reasonable to require certain pollution-mitigating practices as a condition of receiving them, he said, "It's not crazy," which is libertarian for almost yes. He points out that, as always, the problem is which practices. Sure, cover crops sequester carbon - usually. And can even increase yields - sometimes. But what if they don't? Masters says "that kind of policy instrument is an essential part of the government tool kit," but also addresses the uncertainty problem. The program "need not be perfect," he says, "because the alternatives are often worse." 4. Tax beef LOL, just kidding. I couldn't even ask Lusk about it because, even from my house on Cape Cod, Mass., I could hear his teeth grinding in Indiana. I did ask Masters whether he thought beef should just flat-out be more expensive, and he said, "In some hypothetical, I-wish-I-wish sense, yes. But in a practical sense, it's not where I would put my energy." If the right is against it, and the left acknowledges its political impossibility, it's a non-starter. But it's worth talking about, because taxes are the most straightforward way to increase prices to reflect the consequences of a particular food. Many objections are ideological; people oppose them because, say, taxing junk food is the nanny state in action, or food taxes are regressive. But if a tax might make people healthier or lessen foods' environmental impact, I'm willing to consider it. I am skeptical that taxes will change what people eat. There are so many variations of the cheap, convenient food that's engineered to be overeaten that if you tax some, others will take up the slack. I am on the record as favoring taxing sugar in the supply chain, because I think that might motivate manufacturers to reformulate some products and because, even if we didn't, it seems like a decent way to raise revenue to deal with the health effects of obesity. Environmental impact, though, might lend itself to taxation. Not beef, but maybe carbon. "A carbon tax, levied at the source and rebated to lower-income people, has long been supported by most economists including me," Masters told me. Lusk isn't gung-ho, and a cap-and-trade system (where polluters purchase credits for emissions to avoid going over a government-mandated cap) is more palatable to him than an outright tax, but he's willing to consider it, which is good enough for me. And there you have it. The Lusk/Masters Axis of Maybe. The uncertainties are real, and give any opponent a very comfortable place to stand. But the problems are pressing, and they're not going to fix themselves. If a liberal and a libertarian can find solid common ground, who among us has an excuse not to join them? REFERENCE Haspel, T. (2022, Jun 08). Is there common ground in fighting cost of food? The Washington Post http://ezproxy.umgc.edu/login QUESTION Use the news article above that discusses a potential positive or negative externality and a proposed regulation to deal with it. 1. Summarize key points in the article 2. What externality is this regulation attempting to address? Is it a positive or negative externality? How effective does the current policy appear to be? Is there an alternative policy approach that may work better/worse (taxes or subsidies, for example) and why? Note: Focus on the "third party" effects of increasing a positive externality or decreasing a negative externality - not, for example, on any "third party" financial effects of collecting a tax or of spending the revenue generated by the tax. Also note that if increasing or decreasing spending results in increased or decreased incomes of third parties, this is a "multiplier effect" (an ECON 201 subject) -- not an example of an externality. 3. Reflection - the students also should include a paragraph in the initial response in their own words, using microeconomic terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life