Monday, October 24, 2022

The Ethics of Dietary Nudges and Behavior Change Focused on Climate and Sustainability

As discussed in McFadden, et al., 2022, when focusing on policies and behaviors related to climate change and sustainability we should consider actual abatement potential and plasticity.   

 "Policy interventions are likely to provide the best return on investment when they target choices and behaviors for which abatement potential and plasticity are high enough to lead to meaningful reductions in GHG emissions"

A lot of important work needs to be done to understand which solutions are technically correct but also the most impactful at scale from a behavior change perspective. And importantly - ethical and honest.  It is important when designing for behavior change that choice architectures reflect the science and honestly represent tradeoffs that are relevant to the context and particulars of circumstances and place. Often behavioral designers are challenged by the fact that nudges are sensitive to context, so may be less impactful when context changes in different environments.  Good science and good business practices and good ethics mandate testing in different contexts to understand the impact. We must also recognize, as I discuss below, that the science and tradeoffs that can be implicitly baked into choice architecture also depend on context and must be considered. When we design choice architectures it should reflect this in ways that are honest and transparent, and not let politics and personal biases get mixed into the batter. If nudges are successful, we want to make sure we are not doing more harm than good at scale. We don't want to unintentionally embed misinformation into product design, and certainly don't want to do this willfully (see here and here for posts discussing misinformation getting been baked into 'GMO' labeling). 

Recent Work Related to Dietary Nudges Focused on Climate and Sustainability

Blondin et al. (2022) investigate adding descriptive messages to nudge consumers to choose plant based food choices. They find that the most impactful framing was related to a 'small changes big impact' frame: 

"Each of us can make a positive difference for the planet. Swapping just one meat dish for a plant-based one saves greenhouse gas emissions that are equivalent to the energy used to charge your phone for two years. Your small change can make a big difference."

This nudge more than doubled vegetarian selections compared to the control group (25.4 percent versus 12.4 percent). They conclude that these types of descriptive messages represent a low cost and scalable intervention that could be adapted and tailored to a variety of retail contexts.  But as I will discuss below - context matters. 

De-loyde et al. (2022) investigated the impacts of eco-labelling and social nudging on sustainable food choices using randomized online experiments. These learnings are important because of the relative cost and difficulty of leveraging eco-labeling vs. more easily scalable social nudges. The costs of eco-labeling are related to the cost of information involved in creating eco-labels that are accurate and transparent (something I will discuss further) as well as the logistical costs of having to provide that information via menus or other media. Understanding the impact on consumer choice relative to cost is important for informing business decisions concerning the use of these nudges. 

Social nudges applied a simple indication on the menu (a star) annotated as 'most popular.'  Eco nudges were more elaborate:

"The three burrito types were displayed alongside a traffic light system, with a scale of 1–5, which was circled at the appropriate sustainability level for that burrito: beef burrito – unsustainable, chicken burrito – neither sustainable nor unsustainable and vegetarian burrito – sustainable (Figure 1). This is consistent with research measuring the CO2 emissions (Espinoza-Orias & Azapagic, 2012), water usage (Mekonnen & Hoekstra, 2010) and impact on biodiversity from the different burrito ingredients (Crenna Sinkko & Sala, 2019)."

Authors conclude:

"This study suggests that future policy could include eco-labelling and/or a social nudge to reduce meat consumption and meet global climate change targets."


Challenges Related to Dietary Nudges Focused on Climate and Sustainability

Metrics Matter

When it comes to measuring climate impact the important human, sustainability, and nutrition tradeoffs related to the metrics we use matter. In Blondin et al. (2022) it was not clear to me how they defined the relationship between food choices and greenhouse gas emissions.  In the article above De-loyde et al. (2022) they cite Espinoza-Orias & Azapagic (2012) in relation to greenhouse gas emissions. While that analysis was super detailed and rigorous, I'm not sure it represents to most accurate or transparent information when it comes to making these choices as it relates to CO2 equivalents. 

When considering beef and dairy specifically, understanding the differences in the way CO2 vs. methane behaves is fundamental to understanding their respective roles impacting climate change, and personal and policy decisions related to mitigating future warming.  Understanding this can help direct attention to those areas where we can make the biggest difference in terms impacting climate change over the long term. As discussed in Allen et al. (2018):

"While shorter-term goals for emission rates of individual gases and broader metrics encompassing emissions’ co-impacts remain potentially useful in defining how cumulative contributions will be achieved, summarising commitments using a metric that accurately reflects their contributions to future warming would provide greater transparency in the implications of global climate agreements as well as enabling fairer and more effective design of domestic policies and measures."

It's not clear that the work cited from 2012 cited in  De-loyde et al. (2022) or the work in Blondin (2022) appropriately accounts for the biogenic carbon cycle and the role of methane as a flow vs. stock gas in their estimates of GHG emissions and warming potential.

Are consumers scanning QR codes on their smartphones (pumping new permanent sources of GHG into the atmosphere) to read a menu nudging them away from beef being distracted from focusing on other seemingly arbitrary choices they could be making to positively impact the climate in more meaningful ways? (This post compares GHG emissions and warming potential of internet use vs. beef consumption)

Additionally, even an accurate measure of GHG emissions and warming potential isn't enough to transparently relate all of the tradeoffs involved. 

In a 2010 Food and Nutrition Research article, authors introduce the Nutrient Density to Climate Impact (NDCI) index. Metrics like this could add some perspective. According to their work:

"the NDCI index was 0 for carbonated water, soft drink, and beer and below 0.1 for red wine and oat drink. The NDCI index was similar for orange juice (0.28) and soy drink  (0.25). Due to a very high-nutrient density, the NDCI index for milk was substantially higher (0.54) than for the other beverages. Future discussion on how changes in food consumption patterns might help avert climate change need to take both GHG emission and nutrient density of foods and beverages into account."

Authors Drewnowski, Adam et al. apply this more nuanced approach to 34 different food categories including meat and dairy:

"Efforts to decrease global GHGEs while maintaining nutritionally adequate, affordable, and acceptable diets need to be guided by considerations of the ND [nutrient density] and environmental impact of different foods and food groups. In a series of recent studies, the principal sustainability measure was carbon cost expressed in terms of GHGEs (8, 14, 15). Testing the relation between nutrient profile of foods and their carbon footprint can help identify those food groups that provide both calories and optimal nutrition at a low carbon cost."


While it does not impact the major findings related to how to influence consumer choices about food and sustainability, it is not clear to me that Blondin et al. (2022) or De-loyde et al. (2022) sufficiently consider these tradeoffs in the choice architectures that they proposed for nudging consumers to make decisions about food consumption. 

If appropriately accounted for in their specific contexts, it does not necessarily imply that these tradeoffs would be appropriately accounted for in different contexts which is what I turn to next.

Context Matters

When it comes to behavior change, context and environment matter immensely.

As discussed in Kanemoto et al. (2019)

"most global-scale models have an important shortcoming; they do not consider subnational variations in food production and consumption. This lack of subnational detail is significant because subnational detail could be more important than global coverage and may show the opportunity to promote and use different subnational policy"

Using combined microdata on 60,000 households collecting information about diet, income, and demographics and a subnational input-output model for production and trade across 47 prefectures in Japan they find: 

"higher-CF  [carbon footprint] households are not distinguished by excessive meat consumption relative to other households but rather have higher household CF intensity because of elevated consumption in other areas including restaurants, confectionery, and alcohol."

De-loyde et al. (2022) start off their article with a global framing of the impact of livestock on GHG emissions: 

"Livestock production contributes an estimated 14.5% of human-induced global greenhouse-gas emissions."

Despite some of the questions above about the metrics used to relate food to climate impact and the nutritional tradeoffs involved when presenting consumers with options, maybe this global framing is appropriate for consumers in the U.K. but is this the most honest framing to use if we try to transport these results to other consumers like U.S. consumers? Are the tradeoffs the same? 

Kanemoto (2019) was based on Japanese consumers who consume relatively low amounts of beef compared to U.S. consumers. When considering U.S. consumers, there are important differences we should consider when attempting to adopt choice architectures used in other contexts designed to influence consumer choice.

Ignoring change in context ignores important differences between technological capabilities and production practices but also differences in incomes, tastes, and preferences. As stated in a recent article in Foreign Policy: 

"Generalizations about animal agriculture hide great regional differences and often lead to diet guidelines promoting shifts away from animal products that are not feasible for the world’s poor....A nuanced approach to livestock was endorsed in the latest mitigation report of the U.N. Intergovernmental Panel on Climate Change (IPCC)." 

When we are designing choice architectures to influence dietary choices related to climate and sustainability, a nuanced approach is also necessary. 

A lot of the criticism of U.S. beef misappropriates or conflates the environmental footprint of beef produced and consumed in the U.S. with beef from other parts of the world. These criticisms may not be appropriate when applied to U.S. consumers. When we drill into agriculture and focus on beef in the U.S. we find that it accounts for about 4% of total emissions. But on a global scale, which matters most to climate change, overall, total GHG emissions related to U.S. beef consumption are 10X lower in the U.S. than beef produced in other places in the world and accounts for less than 1/2 of 1% (i.e. .5%) of global GHG emissions.  (EPA GHG Emissions Inventory, Rotz et al, 2018). See also Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al., 2018. 

Similar to Kanemoto et al. (2019) and McFadden, et al., 2022 when it comes to U.S. consumers it may be the case that the real meat on the bone so to speak (what has the most potential impact given consumer plasticity and realistic assessments of climate impact) as it relates to climate may have more to do with where the food is consumed than what is consumed. It may be the case that once you are already in the restaurant reading the menu that having a salad vs. steak sourced in the U.S. is inconsequential when looking at the global impact. It could even be the opposite case, considering nutritional density and climate tradeoffs, when appropriately quantified, the salad in the restaurant may not be the best choice. 

Scaling and Ethics

In their paper Monetizing disinformation in the attention economy: The case of genetically modified organisms (GMOs) Ryan, Schaul, Butner and Swarthout provide an in depth background on the attention economy, disinformation, the role of the media and marketing as well as socioeconomic impacts. They articulate how how rent seekers and special interests are able to use disinformation in a way to create and economize on misleading but coherent stories with externalities impacting business, public policy, technology adoption, and health. These costs, when quantified can be substantial and should not be ignored:

"Less visible costs are diminished confidence in science, and the loss of important innovations and foregone innovation capacities"

One of the big challenges presented by misinformation and disinformation is its clever use of our fast thinking system 1, its use of social proof and confirmation bias, magnified by technology and social media that focuses on capturing attention and dissemination vs. communication and persuasion. To say the least it can be dangerous at scale. In today's information age and polarized political climate we need to be careful about the things we do at scale. Low cost scalable interventions can be dangerous.

If lots of businesses used nudges and choice architectures that did not accurately reflect the tradeoffs for a given context, or government became involved as an enforcer, or it became a common strategy for corporations to juice up their ESG reporting, these issues could have negative impacts at scale. The harm would be greatest if this becomes a distraction and diverts attention and resources away from more impactful behavior change or reduces investment in greener food technologies. 

We can look at what has happened to the use of rBST in milk production for instance. According to Perkowski (2013) "more than two-thirds of dairy farmers who have ever treated their cows with rBST have stopped using it" despite the fact that rbST in dairy (just one technology) has the equivalent impact of removing 300,000 cars from the road annually (see Capper, 2008). Would consumers favor milk produced from cows supplemented by rBST (leading to an economic premium to encourage its adoption by producers) if they were made more aware of these tradeoffs? Are current labels related to rBST doing consumers justice by providing them better information or are they reinforcing false negative perceptions? 

We could ask similar questions regarding other technological advances in food production and manufacturing like finely textured beef which was so maligned by social media that its developer Beef Products Incorporated (BPI) forced a settlement with NBC for spreading misinformation characterizing it as unsafe pink slime (Mclaughlin, 2017). 

Do current GMO labeling regulatory requirements and food packaging accurately reflect the tradeoffs involved? Would consumers view GMOs differently if they were presented with knowledge that their adoption currently has offset the emissions equivalent to 15 million cars annually. That is more than the total new cars typically sold in the U.S. every year, and about 20% of all new cars sold globally. Or 3X the number of EVs currently being sold in the U.S. annually. 

Whether intentionally designed or not we are always nudging. Are we nudging consumers in the wrong direction (in terms of environmental impact) with labels claiming 'no rBST' on milk cartons and non-GMO labels on other food products? 

Damage can be done when attention and perceptions are manipulated and consumer sentiment leads us to abandon promising technologies that could really make a difference when it comes to climate. 

Misinformation and disinformation have played a major role driving vaccine hesitancy and may have even been accelerated during the COVID19 pandemic. See Johnson et al. (2020) & Vaidyanathan (2020). Both misinformation and disinformation play large roles in other areas like climate denialism and GMO hesitancy and act as bottlenecks to adopting better technologies and policies.  Behavioral designers often strive to identify nudges that are both as effective and scalable. In the research above, De-loyde et al. (2022) and Blondin et al. (2022), social nudges seem to fit the bill here.  But misinformation and disinformation unfortunately represent some of most effective and scalable social nudges you will find. Even with the best of intentions, we need to be careful in the design and deployment of social nudges. 

When it comes to developing nudges and choice architectures related to food choices, we want to be careful that what we do is based on sound science and transparently reflects tradeoffs vs. simply manipulates consumers to act according to our own biases and preferences that may not necessarily represent the optimal choice in every context.

A Guide for Ethical Nudging

The Observatory of Public Innovation has recently published a document titled Good Practice Principles For Ethical Behavioural Science In Public Policy that includes checklists and questions that may speak to many of the issues above. 

They provide a checklist and prompting questions focused on four areas: Scope, Design, Research and Evaluation, and Policy Implementation. Below are some relevant prompting questions based on the discussion above: 

 - Did you establish clear criteria for why the behavioural change has a positive outcome for the affected population? Are these criteria monitored and evaluated regularly? (related to Scope)

-Set up protocols to identify and mitigate ethical risks (such as unintended negative side-effects, both in general and to particular groups (related to Design)

- Have you considered new ethical concerns resulting from scaling and adapting in new contexts?

The criteria for the nudges mentioned above seem to be based on measures of CO2e. But we know that those metrics don't necessarily reflect the latest science and don't necessarily encompass all the relevant tradeoffs implied in the choice architectures being presented to consumers. As a consequence, if these nudges were scaled, we might nudge people to make choices that may not be as optimal as advertised when the goal is climate impact, especially for certain groups in given contexts. These are important side effects to consider. 

Perhaps in the research and design phase when there is debate in the literature or the metrics are complex (as they are in climate science and nutrition and health) it is hard to claim that any of the papers discussed above represent a marked violation of ethics. No standard of ethics should require human infallibility or perfect knowledge - especially when the goals are learning. I don't think this guide is necessarily meant to catch all of the nuances discussed in this post. But when it comes to adoption and scaling of interventions or policies, the ethics involved probably merit greater attention. I think the checklist and prompting questions as they are may be quite useful and can be refined to better reflect certain domains. 

Conclusion

Learnings from studies like Blondin et al. (2022) and De-loyde et al. (2022) are very important for understanding how choice architecture and nudges can be used to influence behaviors that may represent impactful solutions for important societal problems like climate change. We should take these learnings and test them in other contexts to confirm they work in different environments before scaling. We also want to make sure that as we learn about nudging and behavior change to improve choices related to food and sustainability in non-coercive ways, that we do not inadvertently do more harm than good on a grander scale in terms of loss of trust in the science, institutions, and innovations that can have the greatest impact. We need to make sure that we are using choice architecture responsibly, and the ingredients are based on sound science and transparent in the tradeoffs they represent and sensitive to the context in which choices are being made. 

Additional and Related Reading

More recent related posts and updates: 

Nudging Back: Turning off your Zoom Camera May Be Good for the Climate. https://ageconomist.blogspot.com/2023/02/nudging-back-turning-off-your-camera.html 

Picture This: Putting Beef and Climate into Perspective. https://ageconomist.blogspot.com/2023/03/putting-beef-and-climate-into.html

Rational Irrationality and Behavioral Economic Frameworks for Combating Vaccine Hesitancy https://ageconomist.blogspot.com/2021/08/rational-irrationality-near.html

Facts, Figures, or Fiction: Unwarranted Criticisms of the Biden Administration's Failure to Target Methane Emissions from Livestock. https://ageconomist.blogspot.com/2021/12/facts-figures-or-fiction-unfair.html 

The Limits of Nudges and the Role of Experiments in Applied Behavioral Economics. https://ageconomist.blogspot.com/2022/06/the-limits-of-nudges-and-role-of.html 

Will Eating Less U.S. Beef Save the Rainforests? http://realclearagriculture.blogspot.com/2020/01/will-eating-less-us-beef-save.html

Can Capitalism Be A Force For Good When it Comes to Food? https://ageconomist.blogspot.com/2021/07/can-capitalism-be-force-for-good-when.html

GMOs and QR Codes: Consumers need more than a label they need a learning path https://ageconomist.blogspot.com/2016/08/gmos-is-just-any-label-enough.html

Modern Sustainable Agriculture Annotated Bibliography (updated) http://ageconomist.blogspot.com/2011/02/modern-sustainable-agriculture.html

References

Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al. A solution to the misrepresentations of CO2-equivalent emissions of short-lived climate pollutants under ambitious mitigation. npj Clim Atmos Sci 1, 16 (2018) doi:10.1038/s41612-018-0026-8

Blondin, Stacy & Attwood, Sophie & Vennard, Daniel & Mayneris, Vanessa. (2022). Environmental Messages Promote Plant-Based Food Choices: An Online Restaurant Menu Study. World Resources Institute. 10.46830/wriwp.20.00137. 

Graham Brookes & Peter Barfoot (2020) Environmental impacts of genetically modified (GM) crop use 1996–2018: impacts on pesticide use and carbon emissions, GM Crops & Food, 11:4, 215-241, DOI: 10.1080/21645698.2020.1773198

The environmental impact of recombinant bovine somatotropin (rbST) use in dairy production Judith L. Capper,* Euridice Castañeda-Gutiérrez,*† Roger A. Cady,‡ and Dale E. Bauman* Proc Natl Acad Sci U S A. 2008 July 15; 105(28): 9668–9673

De-loyde, K., Pilling, M., Thornton, A., Spencer, G., & Maynard, O. (2022). Promoting sustainable diets using eco-labelling and social nudges: A randomised online experiment. Behavioural Public Policy, 1-17. doi:10.1017/bpp.2022.27

Drewnowski, Adam et al. “Energy and nutrient density of foods in relation to their carbon footprint.” The American journal of clinical nutrition 101 1 (2015): 184-91 .

Johnson, N.F., Velásquez, N., Restrepo, N.J. et al. The online competition between pro- and anti-vaccination views. Nature 582, 230–233 (2020). https://doi.org/10.1038/s41586-020-2281-1

Keiichiro Kanemoto, Daniel Moran, Yosuke Shigetomi, Christian Reynolds, Yasushi Kondo,Meat Consumption Does Not Explain Differences in Household Food Carbon Footprints in Japan, One Earth, Volume 1, Issue 4, 2019,Pages 464-471, ISSN 2590-3322, https://doi.org/10.1016/j.oneear.2019.12.004.

Private costs of carbon emissions abatement by limiting beef consumption and vehicle use in the United States. McFadden BR, Ferraro PJ, Messer KD (2022) Private costs of carbon emissions abatement by limiting beef consumption and vehicle use in the United States. PLOS ONE 17(1): e0261372. https://doi.org/10.1371/journal.pone.0261372

ABC TV settles with beef product maker in 'pink slime' defamation case. By Timothy Mclaughlin https://www.reuters.com/article/us-abc-pinkslime/abc-tv-settles-with-beef-product-maker-in-pink-slime-defamation-case-idUSKBN19J1W9 

Dairymen reject rBST largely on economic grounds. Mateusz Perkowski Dec 10, 2013 Updated Dec 13, 2018 .https://www.capitalpress.com/dairymen-reject-rbst-largely-on-economic-grounds/article_335ce36b-ec75-5734-9aad-80f11cae1d43.html

Camille D. Ryan, Andrew J. Schaul, Ryan Butner, John T. Swarthout, Monetizing disinformation in the attention economy: The case of genetically modified organisms (GMOs), European Management Journal, Volume 38, Issue 1, 2020, Pages 7-18, ISSN 0263-2373

C. Alan Rotz et al. Environmental footprints of beef cattle production in the United States, Agricultural Systems (2018). DOI: 10.1016/j.agsy.2018.11.005 

News Feature: Finding a vaccine for misinformation. Gayathri Vaidyanathan. Proceedings of the National Academy of Sciences Aug 2020, 117 (32) 18902-18905; DOI: 10.1073/pnas.2013249117 https://www.pnas.org/content/117/32/18902

Tuesday, June 28, 2022

The Role of Identify Protective Cognition in the Formation of Consumer Beliefs and Preferences

Background

People pick and choose their science, and often they do it in ways that seem rationally inconsistent. One lens through which we can view this is Bryan Caplan's idea of rational irrationality along with a Borland and Pulsinelli's concept of social harassment costs. 

According to Caplan:

 "...people have preferences over beliefs. Letting emotions or ideology corrupt our thinking is an easy way to satisfy such preferences...Worldviews are more a mental security blanket than a serious effort to understand the world."

This means that:

"Beliefs that are irrational from the standpoint of truth-seeking are rational from the standpoint of utility maximization."

In a previous post, I visualized social harassment costs that vary depending on one's peer group. If these costs exceed a certain threshold (k), consumers might express preferences that otherwise might seem irrational from a scientific standpoint. For example, based on peer group, a consumer might embrace scientific evidence related to climate change, but due to strong levels of social harassment, reject the views of the broader medical and scientific community related to the safety of genetically engineered foods. 



See here, and here.

Identity Protective Cognition

In Misconceptions, Misinformation, and the Logic of Identity-Protective Cognition (Kahan, 2017) the concept of identity protective cognition adds more to the picture. Below are three aspects of identify protective cognition:

  1. What people accept as factual information is shaped primarily by their values and identity
  2. Identity is a function of group membership, i.e. it's tribal in nature
  3. If people choose to hold beliefs that are different from what the 'tribe' believes, then they risk being ostracized (i.e. they face social harassment costs)
  4. As a result, individual thinking and thought patterns evolve to express group membership and what is held to be factual information is really an expression of 'loyalty to a particular identity-defining affinity group.
Additionally Kahan discusses some important implications of this sort of epistemic tribalism. Additional education and more accurate information aren't necessarily effective tactics for addressing the problems of misinformation and disinformation. In fact, what Kahan's and others research have shown is that it can actually make the problem worse. 

'those highest in science comprehension use their superior scientific-reasoning proficiencies to conform policy-relevant evidence to the position that predominates in their cultural group....persons using this mode of reasoning are not trying to form an accurate understanding of the facts in support of a decision...with the benefit of the best available evidence....Instead they are using their reasoning to cultivate an affective stance that expresses their identity and their solidarity with others who share their commitments.' 

In this way, identity protective cognition creates a sort of spurious relationship between what may be perceived as facts and the beliefs we adopt or choices we make. It gives us the impression that our beliefs are being driven by facts when the primary driver may actually be cultural identity. 




This sort of tribalism can result in a sort of tragedy of the science communication commons - similar to the tragedy of the commons in economics where what seems rational from an individual standpoint (adopting the beliefs of the group to avoid punishment) is irrational from the standpoint of accuracy of beliefs and has negative consequences for society at large. As a result:

'citizens of a pluralistic democratic society are less likely to converge on the best possible evidence on threats to their collective welfare.'

Of course this has consequences for elections, the regulatory environment, and decisions by businesses and entrepreneurs in terms of what products to market and where to invest capital and resources. Ultimately this impacts quality of life and our ability to thrive in a world with a changing climate and bitter partisanship and social unrest. 

The Problem and the Solution

As discussed above, this sort of tribal epistemology is not easily corrected by providing correct information or education. In fact it drives one to seek out misinformation in support of one's identity while ignoring what is factually correct. The authors speak broadly about the role that 'pollutants' or 'toxins' in the science communication environment play in promoting this tribal mentality. One form of social harassment cost that may be driving this is cancel culture or call out culture. Cancel culture works like an immune system that scans the network of believers and seeks out non-conforming views, and tags it to be attacked by others in the group. This drives even the brightest to seek out misinformation instead of avoiding it. 




Another pollutant to the science communication environment is troll epistemology and related efforts to produce a 'firehose of falsehood' (see Paul and Matthews, 2016). Whether intentional or not, modern media technology provides the infrastructure to produce an effect similar to modern propaganda techniques pioneered in Russia.  This emphasizes flooding the science communication environment via high-volume and multichannel, rapid, continuous, and repetitive false or unsubstantiated claims with no commitment to objective reality or logical consistency. 


Authors conclude:

'the most effective manner to combat the effect of misconceptions about science and outright misinformation is to protect the science communication environment from this distinctive toxin.'

Related Posts and References

Borland,Melvin V. and Robert W. Pulsinelli. Household Commodity Production and Social Harassment Costs.Southern Economic Journal. Vol. 56, No. 2 (Oct., 1989), pp. 291-301

Frimer, J. A., Skitka, L. J., & Motyl, M. (2017). Liberals and conservatives are similarly motivated to avoid exposure to one another's opinions. Journal of Experimental Social Psychology, 72, 1–12. https://doi.org/10.1016/j.jesp.2017.04.003

Kahan, Dan M., Misconceptions, Misinformation, and the Logic of Identity-Protective Cognition (May 24, 2017). Cultural Cognition Project Working Paper Series No. 164, Yale Law School, Public Law Research Paper No. 605, Yale Law & Economics Research Paper No. 575, Available at SSRN: https://ssrn.com/abstract=2973067 or http://dx.doi.org/10.2139/ssrn.2973067

Paul, Christopher and Miriam Matthews, The Russian "Firehose of Falsehood" Propaganda Model: Why It Might Work and Options to Counter It. Santa Monica, CA: RAND Corporation, 2016. https://www.rand.org/pubs/perspectives/PE198.html.

Friday, June 17, 2022

The Limits of Nudges and the Role of Experiments in Applied Behavioral Economics

In a recent article in Nature, Evidence from a statewide vaccination RCT, authors found that eight different nudges previously shown to be effective for encouraging flu and COVID vaccination failed to show impact when tested on more reluctant populations. I think a knee jerk reaction is that maybe nudges aren't effective ways to increase vaccination after all. But that completely misses a very important aspect of nudges. Nudges work in most cases because humans can be sensitive to context. And applied behavioral design processes work to understand this context and test the impact of interventions to know if they are effective in a given context. At the highest level I think this paper is less about the ineffectiveness of nudges per say and more about the important role of changing context on behavior. 

I'd like to try to unpack more by focusing on the following: 

  • The importance of testing. You can’t blindly chuck nudges over the fence at your customers and simply assume they will be effective just because they worked in prior published studies or in other businesses. In this paper they tested 8 different nudges. If they had just scaled any or all of these without testing we would not have learned anything about effectiveness or the other lessons that follow relating to why they may not have worked. And vice versa - just because something failed to replicate in one context doesn't invalidate prior work or imply it won't work in yours. We just know findings are not generalizable across all contexts. The only way to really know about your context is to test. That is part of the value of business experiments.
  • Context matters. In the paper they discussed important differences in context between late stage COVID vaccination and vaccination earlier in the pandemic, as well as differences between flu and COVID.
  • The utility of behavioral personas and behavioral mapping to guide our thinking about why a given nudge may work or not. To take context a bit further, authors discussed differences in populations (age) and different challenges to flu vs COVID vaccinations and the differential impact related to how both logistical and psychological barriers may have been addressed in different populations and different contexts with different designs. All of these are things that we can point to or think about in the framework of behavioral mapping. Other issues related to 1) different kinds of hesitancy and changing norms over time, 2) whether some participants may have already been vaccinated (and not mentioned perhaps how prior infection may have changed the sense of effectiveness or urgency). These things may relate more to the kinds of personas that any given nudge may speak to. Although the paper doesn't discuss behavioral mapping or developing personas their utility here seems palpable.
  • Behavioral design frameworks. Additionally, authors discussed the impact of things like message saturation and novelty effects in addition to timing. These are things that I tend to think about in the context of Stephen Wendel’s CREATE action funnel as a design framework that speaks to issues like the importance of Cue and Timing. (Actually every aspect of CREATE speaks to almost all of the aspects of this messaging in some way).
  • The importance of operationalizing applied behavioral science through repeatable iterative cycles of learning. Even if one constructed behavioral maps and personas in the design of these nudges, the findings in this paper (and in many instances where we leverage experiments to test impact) dictate that we go back and revise our maps and personas based on learnings like these.

There has also been some recent discussion about the failure of nudges because they focus too much on individual behavioral (i-frame) vs. larger systemic issues  (s-frame). It seems to me that best practices in the 'diagnosis' phase of behavioral design process would be helpful in both of these areas if the behavioral lens is widened to include deeper thinking about the broader system (s-frame). As discussed in The Consitution of Knowledge: A Defence of Truth Jonathan Rouch discusses the challenges of changing behavior when beliefs and identity become tightly braided together. Sometimes people first have to be moved to a 'persuadable place emotionally' and their 'personal opinions, political identities, and peer group norms' have to be 'nudged and cajoled simultaneously, which is a long slow process.' To quote Jim Manzi, you can't test your way out of a bad strategy. It does not mean that we should give up on leveraging applied behavioral science to make a positive change in society, but it does make understanding of the larger ecosystem in the implementation of nudges all the more critical. 

As discussed in a recent article in The Behavioral Scientist:

"Our efforts at this stage will determine whether the field matures in a systematic and stable manner, or grows wildly and erratically. Unless we take stock of the science, the practice, and the mechanisms that we can put into place to align the two, we will run the danger of the promise of behavioral science being an illusion for many—not because the science itself was faulty, but because we did not successfully develop a science for using the science." 

The authors follow with 6 guidelines echoing some of the above sentiments above that are well worth reading. 

Reference: 

Rabb, N., Swindal, M., Glick, D. et al. Evidence from a statewide vaccination RCT shows the limits of nudges. Nature 604, E1–E7 (2022). https://doi.org/10.1038/s41586-022-04526-2

Chater, Nick and Loewenstein, George F., The i-Frame and the s-Frame: How Focusing on Individual-Level Solutions Has Led Behavioral Public Policy Astray (March 1, 2022). Available at SSRN: https://ssrn.com/abstract=4046264 or http://dx.doi.org/10.2139/ssrn.4046264


Monday, June 13, 2022

Agricultural Economics in the Healthcare Space

During the pandemic, it wasn't too uncommon to hear the criticism that economists should stay in their lane when it comes to issues related to health. So I thought I would write a short piece discussing what role I have had as an applied (agricultural) economist working in the healthcare space for almost a decade now. 

Economics is the study of people's choices and how they are made compatible. At a high level, agricultural economics focuses on choices related to food, fiber, natural resources, and energy production and consumption. This makes the intersection of food, health, and the environment an interesting space in agricultural economics. 

How do choices in this space impact health? What factors lead individuals to make healthy choices? In graduate school I specifically focused on why people seem to pick and choose their science and the role of evidence in food choices and attitudes toward food technology. What is the role of information and disinformation in the formation of consumer preferences and the choices they make? How can we design better policies, products, services, interventions, or choice architectures for better outcomes? How can we communicate science and risk more effectively? And, what are the best approaches in experimental design and causal inference to measure the impact in these areas? How do we bring this all together to make better decisions as individuals, business leaders, and as a society? At an applied level, which is where I work, this is not so much about making a novel contribution to the literature or advancing the field as much as it is about implementation - applying the principals of economics to develop solutions or provide frameworks to solve or better understand questions and problems in this space.

This line of reasoning has value not just in the context of food choices but for a myriad of behaviors related to healthcare at both the patient and provider level. From a business perspective, this is about how to identify opportunities to move resources from a lower to a higher valued use, and how we monetize behavior change. Of course applying this economic lens also requires bringing an ethical perspective to the table as well, which is important when we consider all of the tradeoffs involved in human decision making. 

When we are faced with wicked problems that may have alternative solutions, we can't just jump directly form the science to a cure, better policy, or product or service.  We learned from the pandemic the difference between having a vaccine and having people get vaccinated. At the end of the day there are no solutions really, only tradeoffs, and we need a framework for understanding those tradeoffs so we can make better decisions about food and health. That is squarely in the lane of theoretical and applied economists.

Related Posts and Readings

Why Study Economics / Applied Economics 

The Convergence of AI, Life Sciences, and Healthcare

The Economics of Innovation in Biopharma

Science Communication for Business and Non-technical Audiences 

The Value of Business Experiments

Statistics is a way of thinking not a toolbox

Causal Decision Making with Non-Causal Models

Rational Irrationality and Behavioral Economic Frameworks for Combating Vaccine Hesitancy 

Consumer Perceptions, Misinformation, and Vaccine Hesitancy

Using Social Network Analysis to Understand the Influence of Social Harassment Costs and Preferences Toward Biotechnology

Fat Tails, The Precautionary Principle, and GMOs

Innovation, Disruption and Low(er) Carbon Beef

Examining Changes in Healthy Days After Health Coaching. Cole, S., Zbikowski, S. M., Renda, A., Wallace, A., Dobbins, J. M., & Bogard, M. American Journal of Health Promotion. (2018)

Intrapersonal Variation in Goal Setting and Achievement in Health Coaching: Cross-Sectional Retrospective Analysis. Wallace A.M., Bogard M.T., Zbikowski S.M. J Med Internet Res 2018;20(1):e32

Monday, January 24, 2022

Innovation, Disruption, and Low(er) Carbon Beef

Is There Really Such a Thing as Low-Carbon Beef? That is the title of a recent article in Wired. The article was referring to a new USDA program that will allow beef to be labeled and marketed as having a lower carbon footprint based on a lifecycle assessment and audit of production practices. To be lower carbon it must be 10% lower. Here is a bit more detail:

"Verification of reduced greenhouse gas emissions in a group of cattle using a comprehensive life-cycle assessment model that incorporates impacts associated with management practices and cattle performance throughout the life of the animals.A qualified group of cattle must have life-cycle greenhouse emissions at least 10% lower than industry baseline based on the Low Carbon Beef Scoring Tables." 

Before getting into this further I will first answer the question posed by the title. Yes - on a relative global basis, beef produced and consumed in the U.S. is low carbon. Beef in the U.S. accounts for about 4% of total GHG emissions. But on a global scale, which matters most to climate change, overall, total GHG emissions related to U.S. beef consumption accounts for less than 1/2 of 1% (i.e. .5%) of GHG emissions (EPA GHG Emissions Inventory, Rotz et al, 2018). Additionally when compared to beef produced and consumed in other parts of the world, the carbon footprint of beef produced and consumed in the U.S. is 10 times or more lower (Herrero et al., 2013). There is no arguing against the fact  that when we look at the big picture, U.S. beef is low carbon beef. Of course it is fair to ask, within the U.S. can we improve our carbon footprint? Our history tells us yes we can and as I will discuss below, the new USDA labeling program cited in Wired may be one way to incentivize getting there. 

Will this new labeling and certification initiative be misleading as the article says? I am one of the first people to speak out against misleading food labels. Just see related posts below. There is currently a lot of confusion about the sustainability of our food choices,  and consumers are having to use a lot of proxies that are less than ideal to attempt to understand their carbon footprint. Examples include local, organic, 'hormone free', or non-GMO products (see my post about issue related to free-from food labeling). All of these options can in fact have higher carbon footprints, lead to more intense resource use, and have negative social and environmental consequences despite how popular some fads may be or what food marketers may imply about their product. By having a verified measure of carbon footprint associated with beef, the new USDA initiative should actually provide clarity to a confused and often misled consumer. Precisely the opposite of the concern raised in Wired.

Misleading or Realistic Recommendations?

The article in Wired quotes the following recommendation: "low-carbon certifications won’t fix the problems caused by beef consumption. “We need to substantially readjust our diets'

Another common suggestion to go along with this is to consume more plant based or cultured alternative meat sources. These suggestions suffer from two major drawbacks. From a behavioral science perspective, they are challenging behaviors to target. 

In a previous post, I discussed how we need to think about the problem we are trying to solve or outcome we are trying to achieve (climate change mitigation) and consider the behavioral map that relates all of the target actions we could take to achieve this outcome. Which solutions are technically correct but also the most impactful at scale from a behavior change perspective? Is a reduction in modern U.S. beef production or consumption the target behavior we should be trying to change compared to other options?

Paul Ferraro, Brandon McFadden, and Kent Messer take this head on using an auction experiment to measure 'plasticity' or the willingness of non-adopters to change behavior (Ferraro, et al., 2022).They find that targeting beef consumption might not be the most socially cost effective approach to mitigating climate change compared to other strategies for abatement (like carbon offsets or policies that encourage more technical innovations). They state:

 "Policy interventions are likely to provide the best return on investment when they target choices and behaviors for which abatement potential and plasticity are high enough to lead to meaningful reductions in GHG emissions....our estimates imply that it would cost at least $642 per tCO2e to reduce GHG emissions by inducing 50% of our study sample to eliminate beef consumption...currently the price to offset a tCO2e (based on existing markets for carbon offsets) is between $10 to $13." 

These costs are not only higher than market based estimates of the cost of carbon but also most estimates of the social cost of carbon as well even at the lower plasticity levels. They state: "in the U.S., a median estimate of the SCC is $48 per tCO2e."

The Fallacy of Disruption

The recommendations from Wired (and similar recommendations promoting cultured or alternative meats) may also suffer from what I am calling the fallacy of disruption. In his book Experimentation Works: The Surprising Power of Business Experiments, Steffan Thomke discusses what drives many important innovations as high velocity incrementalism. Not huge disruptive leaps:

"Even though the business world glorifies disruptive ideas, most progress is achieved by implementing hundreds of thousands of minor improvements that can have a big cumulative effect."

When looking at total economic growth, economists have estimated that 77% of economic growth is driven by existing products not via creative destruction associated with new products (Garcia‐Macia et al., 2019). While creative destruction is a well recognized and essential process in our economy, it is important to recognize there is a lot of progress to be made through high velocity incrementalism.  

The suggestion from the article that alludes to making huge technological disruptive leaps (like cell cultured meat alternatives) or behavior changes (making significant dietary changes) just isn't consistent with what we know about behavioral economics and the economics of innovation. As the work from Ferraro et al. has recently shown, even small changes in beef reduction aren't as practical as we might think. 

Internalizing Climate Externalities via Technological Change and Innovation

Climate change problems are what economists refer to as externalities, which at a high level are unpriced negative consequences of our behavior that fall on third parties or future generations. One way externalities are internalized are through technological innovations, which as discussed above, can result from incremental changes to the way we produce and consume goods and services. We have witnessed this in the beef industry over the last few decades. Thanks to advances in economic development, technological change, innovations in management, marketing, and pricing value in the beef industry (for just a few examples see here, here, here, here, and here), we've seen gains in beef production and quality. Additionally, in 2007 compared to 1977 we were able to produce the same amount of beef using roughly 30% fewer cattle and 30% less land. This represents a huge impact on global warming potential when we consider the implications of this in the context of methane emissions and the biogenic carbon cycle. As previously discussed, :

"when you get in your car to go to your favorite restaurant, the associated methane and CO2 emissions that result represents new and long lasting emissions. For the most part the steak or burger on your plate doesn't directly add any new warming potential to the atmosphere that didn't already exist, nor has any steak or burger you may have eaten in the last 30 years based on this data."

Feed and and water usage were also down between 15-20% with a 16% lower carbon footprint (Capper, 2007). All of these factors have culminated in a healthier, more nutritious, higher quality product with a lower carbon footprint. As noted above, compared to other places in the world, the impact of technological innovation is many fold.

It is important to note that these innovations were market driven. They entailed voluntary behavior changes by both producers and consumers that led to higher quality, more nutritious, and more environmentally friendly beef. In addition to helping provide more clarity to consumers compared to existing labeling schemes, the new USDA labels will only help incentivize this innovative process by effectively putting a price on carbon, in absence of any new regulatory frameworks, subsidies, permits, or carbon taxes. 

The history of food innovation in the beef industry tells us this trend of voluntary and market driven advancement will continue. While in the life sciences, the 'high velocity' part of high velocity incrementalism is more challenging than designing a search engine or smartphone app, with the convergence of big data, AI, and genomics,  innovations are happening faster. Current trends in ESG reporting and concerns about scope 3 emissions, along with advances in block chain and other source verification technologies will only further catalyze future advances. We just don't have this kind of momentum behind drastic dietary fads related to huge reductions in beef consumption, going vegan, or alternative proteins. 

Related Reading

Rational Irrationality and Satter's Hierarchy of Food Needs http://ageconomist.blogspot.com/2018/10/rational-irrationality-and-satters.html  

The 'free-from' Nash equilibrium 

The Challenging Tradeoff of Weighing Biased Consumer Preferences Against Marketing Food with Integrity. http://ageconomist.blogspot.com/2017/12/allenge-tradeoff-of-weighing-biased.html  

GMOs and QR Codes: Consumers need more than a label they need a learning path. 


References

HJ. L. Capper, The environmental impact of beef production in the United States: 1977 compared with 2007, Journal of Animal Science, Volume 89, Issue 12, December 2011, Pages 4249–4261, https://doi.org/10.2527/jas.2010-3784

Private costs of carbon emissions abatement by limiting beef consumption and vehicle use in the United States. McFadden BR, Ferraro PJ, Messer KD (2022) Private costs of carbon emissions abatement by limiting beef consumption and vehicle use in the United States. PLOS ONE 17(1): e0261372. https://doi.org/10.1371/journal.pone.0261372

Daniel Garcia‐Macia & Chang‐Tai Hsieh & Peter J. Klenow, 2019. "How Destructive Is Innovation?," Econometrica, Econometric Society, vol. 87(5), pages 1507-1541, September.

Herrero, M., P. Havlík, H. Valin, A. Notenbaert, M.C. Rufino, P. K. Thornton, M. Blümmel, F. Weiss, D. Grace, and M. Obersteiner. 2013. Biomass use, production, feed efficiencies, and greenhouse gas emissions from global livestock systems. Proc. Natl. Acad. Sci. 110: 20888-20893



Thursday, December 30, 2021

Facts, Figures, or Fiction: Unwarranted Criticisms of the Biden Administration's Failure to Target Methane Emissions from Livestock

Background

Methane has gotten a lot of attention recently in relation to fighting climate change:

"The oil, gas and coal industries are the largest source of human-caused methane emissions. An Environmental Defense Fund study found that cutting methane emissions now could slow the near-term rate of global warming by as much as 30%."

While these facts may be true, it takes theory to explain facts, and unfortunately bad theory leads to bad decisions even if we get the facts right. A recent article in Politico provides an example in it's criticism of the Biden administration's failure to target methane emissions from livestock to combat climate change:

"This creative accounting and the administration’s policies belittle the livestock industry’s role in the methane emergency. While Biden and other U.S. officials are preaching the importance of slashing methane emissions to prevent catastrophic warming and imposing tough new methane regulations on fossil fuel companies, they are allowing super-polluting meat and dairy corporations to continue to emit massive amounts of the same greenhouse gas with impunity."

Are all methane sources equal?

Accounting for methane is key, but there is a lot of nuance to understand about methane in order to account for it appropriately so that we take the right course of action when it comes to policy and food choices.

Let's start with a bigger picture looking at total GHG emissions by source:

Source: https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks 

When we drill into agriculture and focus on beef in the U.S. we find that it accounts for about 4% of total emissions. But on a global scale, which matters most to climate change, overall, total GHG emissions related to U.S. beef consumption accounts for less than 1/2 of 1% (i.e. .5%) of global GHG emissions (EPA GHG Emissions Inventory, Rotz et al, 2018). When we talk about methane emissions associated with eating U.S. sourced beef in the U.S., we are talking about a very thin slice of total global warming potential. 

When we zoom in on this slice of potential and focus on methane this is what we see according to the current administration's Methane Emissions Reduction Action Plan:

Source: https://www.whitehouse.gov/wp-content/uploads/2021/11/US-Methane-Emissions-Reduction-Action-Plan-1.pdf  

Enteric emissions account for all ruminant livestock emissions in the U.S. which would include both beef and dairy but that gives us a pretty good picture. Again, we have facts that are all true, but *how* should we interpret this? A naive interpretation would be to simply compare the pieces of the pie assuming that we can make apples to apples comparisons between each piece and choose a course of action based on the 'facts.'  But this would be misleading without understanding the underlying biology and data generating mechanisms giving rise to this data.

The crude infographic that I put together below sheds some light on this (See this video for a better illustration or Dr. Frank Mitloehner's more detailed explanation of the biogenic carbon cycle here; see also Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al., 2018). At the highest level, methane emissions produced by beef cattle are constantly recycled. The ultimate source of methane starts in plants and is consumed by livestock and later removed from the atmosphere in the form of CO2 by plants again to repeat. This can be visualized by a tank with water going in and eventually draining out. In this context methane is a 'flow' gas.

Methane sourced from natural gas and petroleum behaves differently. When we extract, refine, and burn fossil fuels the methane associated with this is released into the atmosphere, but absent any sort of mitigation it ultimately converts to CO2 where it remains to have a long lasting warming effect. This can be visualized by a tank with water going in but never draining out. 


In relation to the first tank representing enteric emissions from livestock, there are additional nuances. When we look at U.S. cattle inventories over the last 30 years what we see is that the rate of flow from the faucet has mostly been decreasing. We have not only been recycling the same methane in the atmosphere over and over the last few decades, but less of it. Thanks to advances in economic development, technological change, innovations in management, marketing, and pricing value in the beef industry (for just a few examples see herehere, here, here, and here), we've seen gains in beef production and quality. Additionally, in 2007 compared to 1977 we were able to produce the same amount of beef using roughly 30% fewer cattle and 30% less land. Feed and and water usage were down between 15-20% with a 16% lower carbon footprint (Capper, 2007). All of these factors have culminated in a healthier, more nutritious, higher quality product with a lower carbon footprint. We can't say the same about methane associated with fossil fuels and transportation which continues to flow at greater rates and doesn't get recycled. 


Source: https://www.nass.usda.gov/Newsroom/2021/01-29-2021.php 

So when you get in your car to go to your favorite restaurant, the associated methane and CO2 emissions that result represents new and long lasting emissions. For the most part the steak or burger on your plate doesn't directly add any new warming potential to the atmosphere that didn't already exist, nor has any steak or burger you may have eaten in the last 30 years based on this data! 

Are all sources of beef equal?

Why focus on U.S. beef production and consumption in this discussion? Because in the Politico article and in many conversations like this, the context is often subtly switched between consumers of U.S. beef and consumption of beef sourced in other parts of the world as if they are substitutes. This change in context ignores important differences between technological capabilities and production practices but also differences in incomes, tastes, and preferences. A lot of the criticism of U.S. beef may actually be true in relation to beef produced and consumed in other parts of the world. We are not burning down rain forests in the U.S. in order to produce and consume beef, and the indirect connection between U.S. beef production and consumption and deforestation in other parts of the world is very weak due to the way global beef markets function. However, there are opportunities to make beef greener in other parts of the world that should not be ignored and should be researched further (see Mrode et al., 2019; Silva et al., 2018; Gates, 2017).

Should we just ignore the very potent warming potential represented by methane emissions associated with U.S. beef consumption just because it represents a thin slice of the global pie that is relevant to climate change? No, but we should put it in the proper perspective, and think of the overall global portfolio of choices we make in our diets and daily lives and not get anchored on facts divorced from the proper context so we can actually make impactful decisions. 

Consumer fads and a climate friendly behavior change strategy

As discussed above, even if all U.S. consumers gave up beef tomorrow cold turkey, there is an upper limit on the impact we can have globally. Modest changes either reducing beef consumption or switching to alternative proteins would be even less impactful. However, we should still recognize that lots of small changes could add up to have a meaningful effect in the aggregate. Given the behavioral and nutritional challenges that make any meaningful reduction in beef consumption mostly impractical at a population level (and ignoring the elephant in the room that is transportation) it is an empirical question as to what other seemingly arbitrary lifestyle changes we could suggest to decrease our impact on climate - maybe that once a week trip to the grocer to buy in bulk instead of having the fleet of Amazon, UPS, and FedEx trucks down your street multiple times a week is one example. Other consumerist trends we've seen that could also be adding to our carbon footprint could involve the fads and infatuation with local, natural, and organic food consumption, and the notorious 'free-from' food marketing campaigns that tend to demonize climate saving technologies (see here, here, here, here, here, and here for related info). 

Putting the lens of behavioral science on this, we need to think about the problem we are trying to solve or outcome we are trying to achieve (climate change mitigation) and consider the behavioral map that relates all of the target actions we could take to achieve this outcome. What role does science literacy and misinformation and disinformation play in the trends and food fads noted above that could lead to hesitancy to adopt climate saving technologies? Which solutions are technically correct but also the most impactful at scale from a behavior change perspective? Is a reduction in modern U.S. beef production or consumption the target behavior we should be trying to change compared to other options? Maybe for some people but I'm not convinced it is a global solution. 

Getting the most nutritional bang for our climate buck

How do we know we are getting the most nutritional bang for our climate buck when thinking through this? In a 2010 Food and Nutrition Research article, authors introduce the Nutrient Density to Climate Impact (NDCI) index. Metrics like this could add some perspective. According to their work:

"the NDCI index was 0 for carbonated water, soft drink, and beer and below 0.1 for red wine and oat drink. The NDCI index was similar for orange juice (0.28) and soy drink  (0.25). Due to a very high-nutrient density, the NDCI index for milk was substantially higher (0.54) than for the other beverages. Future discussion on how changes in food consumption patterns might help avert climate change need to take both GHG emission and nutrient density of foods and beverages into account."

Authors Drewnowski, Adam et al. apply this more nuanced approach to 34 different food categories including meat and dairy:

"Efforts to decrease global GHGEs while maintaining nutritionally adequate, affordable, and acceptable diets need to be guided by considerations of the ND and environmental impact of different foods and food groups. In a series of recent studies, the principal sustainability measure was carbon cost expressed in terms of GHGEs (8, 14, 15). Testing the relation between nutrient profile of foods and their carbon footprint can help identify those food groups that provide both calories and optimal nutrition at a low carbon cost."


Just as combining trips and carpooling might be effective ways to reduce your carbon footprint getting the most out of every mile driven and gallon of gas used, to be truly impactful regarding climate change, we should be trying to get the most out of every bite we take and ounce we drink. 

Weighing efficiency and values

The previous discussion starts to sound a lot like a position related to optimization and efficiency which ultimately requires making value judgements that science and economics can't make.

As discussed in Heyne, Boettke, and Prychitco's text The Economic Way of Thinking:

"efficiency is essentially an evaluative term. It always has to do with the ratio fo the value of output to the value of input...in effect it depends on what people want done and how they value what they want done. It follows that the efficiency of any process can change with changes in valuations."

What I am getting at is that maybe people prefer to have sustenance from beef vs rice or other alternatives and we have to give weight to that in a policy framework. Physical and technical facts alone can never fully determine efficiency. That's what makes economics so powerful. Its the study of people's choices and how they are made compatible. It is way more than just the study of the technical allocation of resources because it forces us to consider each individual's preferences based on the knowledge of their specific circumstances of time and place.

Science and economics can't make value judgements for us, but we should strive get the facts right, and the stories we tell with the facts need to be true to the science behind them. 

Additional and Related References:

HJ. L. Capper, The environmental impact of beef production in the United States: 1977 compared with 2007, Journal of Animal Science, Volume 89, Issue 12, December 2011, Pages 4249–4261, https://doi.org/10.2527/jas.2010-3784

Rafael De Oliveira Silva, Luis Gustavo Barioni, Giampaolo Queiroz Pellegrino, Dominic Moran, The role of agricultural intensification in Brazil's Nationally Determined Contribution on emissions mitigation, Agricultural Systems, Volume 161, 2018, Pages 102-112, ISSN 0308-521X, https://doi.org/10.1016/j.agsy.2018.01.003.

Mrode, R., Ojango, J., Okeyo, A. M., & Mwacharo, J. M. (2019). Genomic Selection and Use of Molecular Tools in Breeding Programs for Indigenous and Crossbred Cattle in Developing Countries: Current Status and Future Prospects. Frontiers in genetics, 9, 694. https://doi.org/10.3389/fgene.2018.00694

C. Alan Rotz et al. Environmental footprints of beef cattle production in the United States, Agricultural Systems (2018). DOI: 10.1016/j.agsy.2018.11.005 

https://phys.org/news/2019-03-beef-resource-greenhouse-gas-emissions.html

What cowboys can teach us about feeding the world. Could a cattle ranch in Australia improve food security in Africa? Bill Gates. Gates Notes. July 18, 2017. https://www.gatesnotes.com/Development/What-Cowboys-Can-Teach-Us-About-Feeding-the-World?WT.mc_id=07_18_2017_10_AustralianCattle_BG-LI_&WT.tsrc=BGLI

Scarborough, P., & Rayner, M. (2010). Nutrient Density to Climate Impact index is an inappropriate system for ranking beverages in order of climate impact per nutritional value. Food & nutrition research, 54, 10.3402/fnr.v54i0.5681. https://doi.org/10.3402/fnr.v54i0.5681

Drewnowski, Adam et al. “Energy and nutrient density of foods in relation to their carbon footprint.” The American journal of clinical nutrition 101 1 (2015): 184-91 .

Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al. A solution to the misrepresentations of CO2-equivalent emissions of short-lived climate pollutants under ambitious mitigation. npj Clim Atmos Sci 1, 16 (2018) doi:10.1038/s41612-018-0026-8

Thursday, October 21, 2021

The Supply Chain Knowledge Problem

Our current supply chain struggles can largely be understood through the lens of the fundamental problem of economics, the knowledge problem. The knowledge problem was originally characterized by Hayek:

"The economic problem of society is not merely a problem of how to allocate given resources....it is a problem of utilization of knowledge which is not given to anyone in its totality."

This can be understood by recognizing that 'know how' and 'know what' are spread across many minds to paraphrase some of the work by economist Kenneth E. Boulding and as discussed in Peter Boettke's Living Economics. The knowledge problem is also exemplified in the words of Leonard E. Read's pencil in his essay I, Pencil, "Not a single person on the face of this earth knows how to make me."

This excellent YouTube video update of Read's essay provides a modern illustration:


"if I didn't already exist you might think that such a flowering of free cooperation, competition, and creation was either impossible or magical and yet here I am!"


How does this apply to our supply chain issues? Well because 'know how' and 'know what' are spread across so many minds, not a single person on the face of the earth knows how to make anything. As a result, no one has the knowledge to fix our supply chains. Our supply chains are the result of human action but not human design. Of course this is a feature and not a bug. As a result most consumers and policy makers usually remain comfortably blind to the knowledge problem and the role of the price mechanism that solves it.


Our economy is not analogous to an engine that will automatically restart after shutting down like the engine of a car at a traffic light. Instead of thinking of our economy and the supply chains that sustain it as a mechanical system that can be engineered by technicians, a better analogy is an evolving ecosystem. Each product we consume and its components have evolved to fit into very specific niches. We could think of our supply chains as habitats that have been threatened by COVID and our response to it.


Just as restoring an ecosystem after an environmental disaster requires an understanding of ecology, we must understand the ecology of our markets and supply chains in order to restore our economy and avoid an even worse ecological disaster. We must recognize that the knowledge problem post COVID is more challenging than pre covid made evident by recent price spikes and shortages that some people could be confusing for monetary inflation. We have to understand that our supply chains evolved over a number of years, even decades, and ‘regrowth’ will take time and things may not grow back to look like they did before.This could mean higher prices now and well into the near future for a number of goods, with some items reaching new higher equilibrium levels as tastes, preferences, and production practices may have changed post COVID. 


COVID and our response to it unfortunately destroyed the ‘know what’ and ‘know how’ that was spread across millions of minds and across decades of building our supply chains. There is no simple blunt monetary or fiscal policy that can substitute for the ‘know how’ and ‘know what’ it’s going to take to rebuild them. It’s going to take time. Prices have to search and signal for the ‘know how’ and ‘know what’ to rediscover and rebuild what was lost.


Our supply chains co-evolved over time with a number of prohibitions and frictions. We learned during the pandemic the potential of relaxing some prohibitions such as those in healthcare, which allowed supply to creatively meet demand using telemedicine. What other opportunities exist to help rebuild our supply chains?


Policy makers must think carefully about how to respond going forward and must be willing to allow new species to emerge as different sustainable patterns of specialization and trade evolve post COIVD. Because, they don't possess the ‘know how’ and ‘know what’ to fix it. If anything, COVID has reminded us all of the words of Frederick Hayek:"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."



Notes and References:

Friedrich Hayek (September 1945). "The Use of Knowledge in Society" (PDF). The American Economic Review. 35 (4): 519–530

Living EconomicsYesterday, Today, and Tomorrow. Peter J. Boettke. 2012.