Calculating The Social Costs Of Animal Agriculture

When evaluating industries, economists sometimes think in terms of “externalities.” This refers to costs or benefits to groups that aren’t themselves producing for or consuming from that industry. In the case of modern animal agriculture, these unrepresented groups include farmed animals who suffer as a result of farming, and future humans who will experience the effects of greenhouse gas emissions from farming.

By thinking about the consequences of externalities for unrepresented groups, it’s possible to put a number, in dollars, on the “social cost” (the total cost to society) of an industry. In this paper, researchers attempted to calculate the social cost of animal agriculture. 

To do this, it’s important to decide whether the results of factory farming for unrepresented groups might be, on balance, a good or a bad thing. Any level of greenhouse gas emissions from farming will be at least a little bad for future humans; this is easy to conclude. A trickier part of this process is trying to determine exactly how bad the experience of factory farming is for animals. The researchers assume that, if a life is more good than it is bad, it adds to social welfare (the overall welfare of society). 

For the sake of this paper, the researchers argue that, on balance, the experience of being a farmed animal is probably worse than not existing. That is, it’s not a worthwhile life. This is based partly on a previous study of experts including philosophers, activists, and farmers, who largely stated that the life of a broiler chicken was not worth living. If we decide that the life of one farmed animal is a bad thing, this has huge implications for the industry as a whole. Tens of billions of animals are raised and slaughtered each year, largely made up of chickens.

The researchers state that the experience of living as a farmed animal is the equivalent to a human living on $1 a day. This number may seem arbitrary, but it’s based on the idea that the life of an average farmed animal is worse than a neutral human life. This neutral boundary is taken to be $1.90 a day, the internationally defined poverty line. This is just a thought experiment, and the researchers acknowledge the problematic implication of assuming that a human life below the poverty line is “not worth living.”

When calculating the social cost of animal agriculture, the researchers used a model which considers the greenhouse gas emissions caused by the industry, the damage that occurs as a result, and its effects on animal welfare.

From there, they found that the annual social cost of an individual eating meat is around $122,837. Of this, only $47 is caused by environmental damage, while the rest is attributed to animal welfare. Over the entire population, $47 each a year is still a large impact. However, the negative impacts on animal welfare are clearly much larger, even if we assume that the quality of life for a farmed animal is only slightly worse than neutral. Of course, these numbers don’t reflect an actual amount of money that would be saved by switching to a vegetarian or vegan diet. This is just a way of putting a number on the negative impacts of animal agriculture.

The researchers consider policy implications of their findings. Based on the large social costs, they argue that the optimal level of animal agriculture would be approximately 45% smaller than it currently is. While animal advocates may wish for a larger reduction in size, for the purposes of this paper, social welfare beyond this point might be quite small.

One important implication concerns the specific animals that people choose to eat. Driven by the lower environmental impact, a consumer might decide to eat less beef, but more chicken. While cow consumption might be more climate-intensive, eating chickens requires a larger number of animals to be raised and slaughtered. In other words, more chickens than cows are needed to generate the same amount of protein. This means more lives in existence that are not worth living, which drives up the social costs of a diet that includes meat. From both a social welfare and a general animal welfare perspective, it might not be effective to encourage people to eat less beef if they are substituting it for chicken.

As the researchers acknowledge, one issue here is that it’s difficult to compare the experiences of farming across species. Despite this, research into animal welfare has supported the idea that farmed chickens typically have worse lives than farmed cows. If so, the welfare costs of chicken consumption remain large compared to cow consumption. These findings also rely on the idea that the average farmed animal’s life is worse than not existing, an idea that some people may argue against. 

Overall, this paper supports the idea that our society would likely be a better place with a smaller animal agriculture industry. It is also an important reminder about the risks of adopting a more climate-friendly diet at the cost of animal welfare. While reducing your carbon footprint is sure to have a positive impact overall, prioritizing the reduction of animal suffering is likely to have an even larger effect.