NAMA: Nachhaltigkeitsleistung und Nachhaltigkeitsbewertung
How much is the dish – A Framework for Internalizing External Costs of Agricultural Production
1Universität Greifswald, Deutschland; 2Technische Universität München, Deutschland; 3Universität Augsburg, Deutschland
Considering the UN’s Sustainable Development Goals the severe global environmental and social impacts of today’s industrial agriculture are to be reduced drastically. Transforming the consumers’ behaviour towards sustainable dietary choices is one auspicious approach. Consumers are currently misled towards demand of inadequately priced, environmentally damaging foodstuff by an insufficient internalization of external costs and thereby distorted market prices. Therefore, we build a framework that translates environmental and social damage into economic impact: following the polluter-pays-principle we calculate market-price surcharges for different food categories which account for their external effects. Life cycle assessment from cradle to farmgate is used to adjust producer prices regarding foods’ greenhouse gas emissions, energy use and nitrogen surpluses. Emission data for eleven food groups of plant and animal origin is therefore retrieved from the life cycle assessment tool GEMIS. We then conduct a meta-analysis referring to the environmental difference between organic and conventional farming practices to differentiate external costs even further. Our results show significant differences between the categories: while organic produce should be an average of 31.6% more expensive effects of conventional production resulted in an average surcharge of 145.2%. Plant-based organic food appears to be the currently most reasonably priced group. The most insufficiently priced food groups yet are different types of meat. A price shift in the categories of beef and poultry can be observed, as both conventional products are more expensive than their organic counterpart after internalisation. Overall, these results display the vastly varying gaps between current market prices and the true costs of different food categories. When environmental damage is internalized using our framework the consequential undistorted market design would lead consumers towards demand of reasonably priced, environmentally and socially beneficial foodstuff. Our market-based approach could pose a real chance to reduce agricultural emissions and contribute to achieving the SDGs.
Calculating External Climate Costs for Different Food Categories: A German Case Study
1Technische Universität München, Deutschland; 2Universität Greifswald, Deutschland; 3Universität Augsburg , Deutschland
Although about one fifth of greenhouse gas (GHG) emissions worldwide is attributed to the agricultural sector, thorough analysis of the quantity as well as the monetization of these climate relevant emissions has not yet been conducted in the context of differentiating between production systems as well as a variety of food categories. This paper therefore fills this gap in scientific literature by presenting a general method exemplary applied in the context of Germany. By doing so, we methodically show how the economic instrument of internalization of external effects through product-specific mark-up costs can be applied according to the polluter pays principle. Applying our results would ensure a sustainable and climate-friendly price-design of agricultural output. Using life cycle analysis as well as meta-analytical methods we can show that mark-up and external costs are the highest for conventional animal products (1.60€/kg product; 97% mark-up on producer price level), followed by conventional milk products (0.21€/kg product; 78%) and the lowest for organic plant-based products (0.02€/kg product; 5%). In all examined categories, organic products cause less additional costs than their conventional counterparts. The pronounced difference of relative external costs between food categories as well as the general amount of external climate effects in the agricultural sector can be seen as a strong argument for closing the gap between the currently observable market price and true costs in this sector. The true value of different food-groups and agricultural systems provides policy-makers with the relevant information to efficiently reduce associated ecological follow-up costs.
The interplay of strategic choices and sustainability control systems in the emergence of capabilities for corporate sustainability performance
TU Berlin, Deutschland
The aim of this paper is to explore the relationships between sustainability strategies, the use of sustainability control systems, organizational capabilities, and sustainability performance. More specifically, we focus on the differences between reactive and proactive sustainability strategies, and their impact on the intensity of use of sustainability control systems within firms. We analyse the impact of an intense use of sustainability control systems on the emergence of the capabilities of sustainable market orientation, sustainable organizational learning, and sustainable innovation. We further investigate whether both an intense use of sustainability control systems and organizational capabilities act as mediators in the relationship between a proactive sustainability strategy and corporate sustainability performance. Using survey data from a sample of 157 European firms across different industries, the results show that a proactive sustainability strategy is associated with an intense use of sustainability control systems and the development of organizational capabilities. Furthermore, we provide evidence suggesting that the intensity of use of sustainability control systems mediates the association between proactive sustainability strategy and corporate sustainability performance, while a mediation cannot be fully supported for the organizational capabilities analysed.