Marques et al., 2018

• The effects of the protein transition on the macro economy

• Marques, A. C., Fuinhas, J. A., & Pais, D. F. (2018). Economic growth, sustainable development and food consumption: Evidence across different income groups of countries. Journal of Cleaner Production, 196, 245-258.

• Study here t.ly/ohj4Y

Claude generated summary

• In high-income countries (HIC), higher meat consumption is associated with lower GDP growth in the long run. A 1% increase in meat consumption reduces GDP by about 0.125%.
• In upper-middle income countries (UMIC), higher meat consumption also reduces GDP growth, with a 1% rise in meat consumption lowering GDP by 0.371% in the long run.
• However, in middle- and low-income countries (MLIC), higher meat consumption is linked to higher GDP growth in the short run. The paper finds that a 1 percentage point increase in meat consumption leads to a 0.882 percentage point increase in GDP in MLIC countries.

The paper suggests some possible reasons for these differing effects:

• In HIC and UMIC, higher meat consumption may reduce GDP by increasing imports of cheaper meat from poorer countries, negatively impacting trade balances.
• In MLIC, increased domestic meat production and exports may boost economic growth, at least in the short run. But this comes at the expense of sustainability and the environment.
• The differing impacts highlight a dilemma between economic growth and sustainable development when it comes to meat consumption. Reducing meat intake may support sustainability but could negatively impact GDP, especially in poorer countries.

Abstract

Considering that high population and income growths will lead the coming decades, an increase in global food demand is expected. Livestock products, such as meat, are closely related to this trend, but also associated with impacts on the environment and public health, from land and water depletion, to greenhouse gases emissions and higher risks of non-communicable diseases. This trend raises doubts about the sustainability of the food industry and thus a solution is needed for the problem. How to feed the world population without compromising present and future generations. The literature suggests that meat consumption should be reduced for the sake of the environment and global population, however without considering the effects that such reduction would have on the economy. Inspired by these facts, this paper empirically analyses the interactions between food consumption, economic growth and sustainable development (measured by the Index of Sustainable Economic Welfare). More specifically the paper assesses the effect that food consumption has on the economy. The econometric analysis applies the Autoregressive Distributed Lag model for 77 countries, further distinguished by their income group, from 1995 to 2013. The findings support that meat consumption has different impacts on economic
growth and sustainable development considering different income groups. However, there is an evident dilemma between economic growth and sustainable development since meat consumption has contradictory effects on each. Thus, it is crucial to understand how to promote sustainability, i.e., reducing the environmental externalities and chronic health diseases, without compromising economic growth.

"The influence of meat consumption on economic growth varies by income level group. In model VII (Table 9), meat consumption is negatively impacting in the long-run, at a 10% significance level. This is also visible in model VIII, but at a 1% level. Conversely, for model IX, the impact of meat consumption is shown to be positive in the short-run. A 1% increase in meat consumption will decrease economic growth by nearly 0.125% and 0.371% in HIC and UMIC,
respectively, while in MLIC this change impacts positively up to 0.882pp in the short-run. Plant-based consumption is not statistically significant in HIC, neither in the short- nor the long-run, while a positive impact is observed only in the short-run in the UMIC and MLIC of almost 0.08 and 0.11pp, respectively."