However, such a transition may require public investment and redistribution to help certain groups who suffer disproportionately from the changes – implying that feasible externality taxes may not be enough. If so there may be a case for land taxes to help fill this gap.

The transition to carbon neutrality

If in the future there are feasible technological alternatives that produce large quantities of low-cost carbon-free energy, which I fully expect, the long-term costs and benefits of this Act will be minor. New Zealanders will simply import the foreign-produced capital equipment to generate this energy, as they have always done, and people will think about carbon fuel sources in much the same way that they think about using candles to light up their homes. 

As part of the transition, the private sector will have to make capital-intensive investments in alternative energy systems, which requires greater savings. The Government may need to make such investments as well, which is likely to require additional taxation. Some of this money may be raised by Pigouvian “pollution-correcting” taxes, although there is no guarantee that these taxes will be sufficiently large to pay for these investments – and they will not be large enough if the goal of zero carbon emissions is achieved. 

In fact, taxes may be needed to be increased for other reasons. During the transition period, the Act will reduce the welfare of those who would benefit materially from cheaper but dirtier energy and who don’t want to reduce their energy consumption. There may be a demand to compensate low income people if the price of energy becomes very high. 

This may not be just a transition problem either. If cheap alternative energy sources do not eventuate in the long term, New Zealanders will less use carbon-based energy which will result in lower material living standards than otherwise. In this case the Act will result in a lot of redistribution from those who would like to use cheaper carbon-based energy to those who prefer fewer carbon emissions. These lower living standards may be perceived as welfare-enhancing given they result in much less greenhouse gas pollution, just as most people are glad petrol is no longer used in petrol. However, there may be a large number of people who resent the limitations the Act places on their material living standards.

If externality taxes aren’t enough, then what can we do?

If more revenue is wanted for green public investments or for redistribution, is there a good way to increase taxes? The “who will pay more taxes?” question always involves a trade-off between equity and efficiency considerations. There is a demand for efficient taxes to ensure the government does not harm the economy too much, and there is a demand for “equitable” taxes to ensure the living standards of those who cannot afford them are not too harshly reduced. 

For years a large majority of economists have noted that urban land taxes are a particularly efficient way to raise revenue, so they are an obvious place to start. They tend to meet most formal “equity” considerations, as well, since the amount of urban land people own or use tends to be increasing in with wealth and (conditional on age) with income. However, this is not the only equity consideration. If taxes on land or on the income from land are used to pay for the transition to a zero carbon economy, there is another delicious implication. 

Financing the transition to a zero-carbon economy is actually a subset of a more general intergenerational question – if an older generation has caused an environmental problem that needs to be cleaned up by young and future generations, who should pay? Frankly, most economists would probably defer on the “should” aspect of the question, but they have worked out that older generations can be made to paid, if society believes they should. The solution is to use urban land taxes to finance the clean-up costs.

The clearest articulation of this principle has been by Antonio Rangel, from CalTech. The argument is relatively simple, and in some sense dates back to Ricardo and Henry George: if you place a tax on land, the price of land falls and so the incidence of the tax falls on the owners of the land at the time the tax is introduced or raised. 

Even though young people and future generations will actually pay the land tax, they will be compensated by lower land prices. Consequently, a large fraction of the burden of the tax will fall on the older generations who were responsible for the pollution problem. But the argument is better than this. If you introduce a land tax, the threat that it will be raised in the future if clean-up costs are higher than expected or pollution targets are not attained increases the incentives of current generations to actually take action to prevent the pollution problem from getting out of hand. 

This is useful. Urban land taxes are not only an efficient way to raise any taxes associated with the Zero-Carbon Act, but they have “equity” characteristics that suggest they are both efficient and equitable. They could be a “win-win” solution to some of the issues associated with global warming. 

Although it isn’t on the policy agenda right now, there is no reason why it couldn’t be.

This is where New Zealand has an issue. 

New Zealand has a two-pronged retirement policy. The first is New Zealand Superannuation, which is largely funded on a pay-as-you-go basis and so generates zero savings (this is discussed here). The $14 billion in tax largely paid by working age people (or the companies they own) is directly transferred to older people and nothing is saved.  No green energy plants are going to be financed here. 

The second is private savings, either through KiwiSaver or other private saving instruments. This has potential.  But in order to take advantage of the increase in savings that occurs as the population ages, savings need to be productively invested. 

Productive investment relies on information and incentives. With respect to tax policy settings this means the tax system shouldn’t artificially encourage investment in one sector or another (unless it is to solve some externality problem such as pollution). Investment opportunities should be equally taxed – or equally not taxed. 

Unfortunately, NZ does this poorly. 

In contrast to the rest of the OECD, New Zealand has a tax regime for retirement savings that encourages investment in housing and property rather than other assets. Unlike most other countries, New Zealand taxes retirement savings on a “taxed-taxed-exempt” basis under which income is taxed when it is earned, the profits, dividends and interest on these investments are taxed as they accumulate, and the accumulated sum is exempt when it is paid out. 

When this system was introduced in 1989, the plan was to even up the tax on different classes of investment, a noble goal, but when it was implemented it was introduced without a capital gains tax and with an exemption for owner-occupied housing, New Zealand’s largest asset class. This provides an artificial tax incentive to save for retirement by investing in large houses or by buying property in the best possible suburbs. 

Other countries tax retirement savings on an “exempt-exempt-taxed” basis. This provides a tax regime which is broadly neutral between housing and assets held in retirement savings accounts , although it taxes other assets more harshly. This system is largely regarded in the literature as less distortionary than the New Zealand system. 

This means that in other countries private savings accumulated for retirement can be invested in green technologies without facing the tax disadvantage they face in New Zealand.

Unfortunately, for older New Zealanders there may be no practical way to change New Zealand’s current retirement income policies – except to raise taxes now to prefund a larger fraction of future New Zealand Superannuation payments, by placing the money in the New Zealand Superannuation fund. There is evidence that this is a popular policy.

In general, once a previous generation has adopted a pay-as-you-go retirement income scheme, it cannot be undone without some groups being made worse off than they otherwise would have been (although with the benefit that the large opportunity costs placed on future generations by a pay-as-you-go system will be reduced). For older people, it may also be impractical to change the distortionary TTE tax scheme. 

But, as I noted earlier, this does not mean young cohorts who are yet to accumulate much savings (say those born after 1985 or 1989) could not redesign a retirement saving scheme for themselves that does not prevent or discourage green energy investments. 

Given that they will be living in the 21^st century for much longer than older cohorts, perhaps they should be given the opportunity to do this. So far there has been little analysis as to whether it is possible for young people to adopt different tax or retirement policies than older people. There is no inherent reason why it may not be possible. 

Perhaps, then, the time is right to allow younger cohorts to design savings institutions and retirement income polices that will simultaneously enable them to address three of the biggest problems the world is likely to face in the next fifty years. 

In this post I will discuss how the solution to these three issues can be linked. In a follow up I’ll use the example of New Zealand to show how policy settings may be making the third issue worse than it needs to be.

Before getting started, it is useful to discuss the three issues in a bit more detail.

The first issue concerns the way the world economy will function if global emissions of greenhouse gases significantly decline – although a low emission economy may be preferable to allowing the concentration of emissions to increase. The necessary decline in global emissions may require a decline in the goods and services produced – maybe not by as much as some fear due to technological change – and lower growth will mean the global economy will be allocating fewer resources than it currently anticipates.

The second issue is the way the incomes of one or two billion people who live in poverty (or who will live in poverty, as many of these people are not yet born) can be significantly increased. By 2050 a majority of these people will live in South Asia, the Middle East and Africa, the last countries with rapidly rising populations. Lifting these people out of poverty will require more material resources and greater energy use.

The third issue is the way the economies of western countries and East Asian countries such as China, Korea, and Japan deal with a process of population ageing that is likely to see a reduction in the population of several countries. For a discussion of these issues that I’ve found particularly informative see Macroeconomic implications of population ageing and selected policy responses or Some macroeconomic aspects of global population aging.

This ageing process influences not only what goods and services are demanded by these populations, but also their willingness and capacity to work as well as the type of assets they are willing to invest in as part of their general saving for retirement.

Put this way, these three issues are clearly linked. 

The first two issues are linked because the people in the poor countries located around the Indian Ocean want to develop, but this has always taken vast quantities of capital and energy, and in the past this has always meant coal, gas, or oil – and CO₂ (see Ayres and Warr, 2009). Is it possible for half of the world’s population develop without massively increasing the amount of CO₂ in the atmosphere?  The answer is ‘Maybe’ .

Technological breakthroughs in renewable energy and storage technologies mean the lifetime costs of renewable electricity are now competitive with gas-fired electricity and cheaper than coal (Geoffrey Heal (2018) Financial & Technological Prerequisites of the Energy Transition). This means poor countries could develop and increase their energy usage without a massive increase in carbon usage. Simultaneously, these technologies will help currently rich countries reduce their reliance on carbon emitting energy sources.

One of the difficulties with this solution is that renewable electricity has much higher up-front costs than carbon-based electricity, even though it has much lower ongoing costs. It is expensive to build renewable energy plants, an expense most developing countries will struggle to meet because they are capital poor. 

But this provides an opportunity for the older people in western and east Asian countries, whose ageing populations wish to accumulate capital for their retirements. Recycling this capital from ageing countries to young countries to enable green development is possibly the greatest development and climate-change opportunity of our time. 

However, there are two major constraints. 

The first is ensuring the recipient countries have the appropriate political and institutional structures that encourage investment without expropriation. This is no small task. No one wants to invest in an undeveloped country if they believe the country is too corrupt to operate properly, or is likely to take the proceeds of their investment. But change can occur, even if it is one country at a time. 

For example, Morocco, where I am currently visiting for a year, is actively encouraging investment in green energy plants financed by Germany and other countries, and has ambitious plans to build solar and wind energy plants to reduce reliance on gas. 

The second constraint is to ensure the savings of current and future generations of middle-aged people living in rich countries are productively invested. In a follow up post I will use the example of New Zealand to explain this issue in greater detail. As we shall see, a key issue is to design savings institutions for young cohorts that will enable their savings to be used in a manner that is consistent with the environmental situation they want to live in.

What is strange about these episodes is that nothing fundamentally changes other than awareness of an existing issue. This, of course, is a fundamental change. Where thousands were blind they now see. Slavery, starvation, or global warming suddenly become the issue of the day and the world changes.

But is awareness, and the noise surrounding it, the right change to save the planet?

Does it matter if people who once were blind now see? Yes, actually. Information blindness is a part of being human. There is so much to do, so much to know, so much to live that ignorance of most things is normal and rational. It takes a jolt to suddenly realise an issue is important. When the jolt occurs, it is important to respond by fixing the problem.

Unfortunately, even though it is tempting to follow the jolter, they are often not an expert about the issue. The ability to catalyse a movement is different from deep knowledge about the issue.

Climate change is a case in point. Physicists, chemists, biologists, philosophers, businessmen and women and even economists have been investigating, analysing, debating and taking action about climate change for decades and decades. The amount of expertise is staggering – and so is the way that the expertise has been ignored.

If you are serious about taking action to solve the problems associated with climate change, you should read what the experts have been saying. Otherwise they will be continue to be ignored and there is a huge risk that our natural state of rational ignorance will lead to climate boredom. Our attention will be distracted by a sudden awareness of the next big issue. If you are like me and have limited time to read and think and take action, it is important to use that time to read and take notice of the experts.

The solutions and where expertise comes in

There may need to be two climate change solutions.

For people in a rich country like New Zealand, the solution may involve less. Less petrol, less travel, less meat, less plastic, less concrete in our very large houses, less rubbish – and perhaps less time spent at work making stuff that we no longer want and more time spent in leisure with family, friends or a low-emissions podcast.

When Henry Thoreau, the first great environmental writer, retreated to Walden Pond in 1845 he suggested that his greatest skill was living cheaply, for then he did not need to waste his life working. But it may not require much less, given that scientists and businesses have shown time and time again that technological innovations can produce the same amount of output with vastly fewer inputs. It is scientists, engineers and business-people rather than politicians that are leading the charge on the practical ways that people can substantially reduce the carbon inputs used to make any level of output. Indeed, when the designer of the computer, John Von Neumann, wrote about carbon and climate change in 1955 he was sceptical whether politicians had either the talent, ability or interest to deal with the problem.

The other solution is more difficult, for people in developing countries already have much less of most things except an aspiration to develop. Since no country has developed yet without burning large amounts of coal, oil or gas, this may be the key question of the 21^st century: how can people in developing countries develop without cooking the planet? The obvious answer is low carbon energy. This will require significant capital investment as capital-intensive green energy projects are used as a substitute for carbon-intensive energy sources. In turn, this will require the redirection of the savings of the rich world into capital investments in developing countries, a process that is already beginning.

Working out who is an expert is difficult. But it is worth doing. And that is why it will be great if we thank Greta Thunberg and direct our questions to the people who have spent their lives working, thinking, and acting on these issues. People like the great marine biologist and environmentalist Rachel Carson. The planet scarcely deserves less.

However, there is something I’d like to add.  The “left vs centre” debate going on at the moment involves a lot of agreement around environmental sustainability – it is the language around economic sustainability, and tying that explicitly to “social justice” that leads the current Green party to the left.  As a result, they are consistent – but the position may not be popular, representative, or actually correct.

In the past the Greens were technology pessimists and tended to believe that we needed strong “quantity” restraints to solve environmental issues (population limits etc).  The “left-right” debate seems to often get stuck on this – with the Greens saying they’ve moved to the centre by embracing market mechanisms and incentives to technology as ways of improving outcomes.  This is a smooth move by the Greens, good stuff – but I think it misses the central difference between the sustainability that the Greens focus on, and the sustainability which is the focus of recent Blue-Greenish rants.

I haven’t really used this before on the blog, but I think we can conceptualise this by looking at Treasury’s Living Standards Framework.  I’m not a fan of the entirety of the framework, but it is a cool way to help frame questions.  By considering the “capitals” involved we can get a good idea of what is “sustainable”.

In this context, sustainability involves a process where the overall stocks of “capital” (which produce social outcomes) are not being degraded.

A centrist Green party (the more I think of it the more I want to avoid Blue – as they are supposed to be just as likely to work with either main party) implies a certain view about the types of capital being degraded – specifically it is NATURAL CAPITAL that is being undermined, and which requires central government intervention.

The current Green party, which leans left, also believes current policies are degrading social capital – this is a social justice argument (even when it is framed in broader social responsibility terms as in the linked post), and forms part of the basis for “fighting inequality” in some sense.  This involves a view of the sustainability of social institutions and structures, due to the way people work with each other and consider themselves in their community.   This is a fundamentally “left wing” view.

Yes social and natural capital outcomes and processes are intertwined, but a policy focus on both social and natural capital still implies that the party needs to sit left, and inherently puts less weight on natural capital issues than a “centrist” party would.  This runs to the core of much of the disagreement – the relative weights played on these types of “capital” and whether there is currently an issue of degradation in those areas.

Personally, my reading of New Zealand data tells me that the real sustainability issue is in natural capital – not in our social capital (we are not the US).  In that context I prefer the weighting given by a centrist Green party.  This position is consistent (as is the left-green position) but who knows if it would be particularly popular – or will even be correct in a few elections time.  However, the language about sustainability and stocks of capital is a useful rhetorical device to help us analyse, monitor, and debate these issues.

However, there are a few links that I missed.

An excellent post by Eric Crampton from 2010, considering NZ policy choices.  I hear he is doing the next Top 10, so it will be interesting to see if he expands on this!  He discusses the idea of what policy we should put in place, given the fact that the lack of an international agreement removes the “externality” argument from play.  Ideas such as investment in technology (risky, with high potential reward, strategy) and investment in adaption and insurance become much more important here – it is an honest conversation we need to have!

Also, the links in this tweet:

Interesting to read @ezraklein's AGW pessimism http://t.co/3rBYXao3BL just after reading Jim Manzi's take: http://t.co/RLiZA7AJt5

— Ross Douthat (@DouthatNYT) June 5, 2014

Our views, and expectations of, global coordination are an essential part of what is “right” policy here.  Let’s try to be honest about that.  Yes, we can decry the impact on future generations, and we can do things to signal our concern (that is why I support a tax, even though it does nothing to the chance of a GWE).  But these issues are too important to only be controlled by the tyranny of ‘good intentions’, without considering what the actual future impact will be – if we actually believe that global coordination is fraught, we instead need to think about ways to coordination nationally to insure against/limit the impact where appropriate.  Ranting instead will just see us sacrificing future generations of New Zealander’s to make ourselves sound “moral” now

So it should be unsurprising that I broadly agree with the aim Green party policy here, and this should be kept in mind while reading my post.

However, TVHE isn’t about saying what policies I think are good or bad – it is about considering trade-offs and thinking about the details of policy when we can.  In that context, there are a few points I must raise.

Households, consumers, firms

The use of households by the Greens is a touch, disingenuous.  We need to be very clear about what the externality is before we make claims like this – an issue we will get to at the end (in fact, the most important question I have regarding the Green party policy).

Assume for now that there is a type of externality, which requires taxpayer funding to clean up, and is due to the decisions of producers.  In that case, pricing the externality is a way to get us towards “user pays” for pollution – excellent.

Now the ETS already does this in a form, so the question is how the relative burden is being shifted.  What forms of household/consumer/firm are currently being subsidised, and which forms are paying more in tax for the pollution?

This is a complex question, and doesn’t actually lend itself to points like this:

“The Green Party’s plan will future-proof our economy and put New Zealand firmly back in the global green race, all while leaving households better off.

From what I can tell, the main difference will be including agriculture in the tax – thereby switching burden from general taxpayers towards agriculture.  Whether that is fair (I think it is) and the impact on aggregate income (which is unclear) are two hard questions to ask, but important ones.  As always there is some type of trade-off here.

Let me give an example.  There is a lot of talk about “rural communities” struggling, and yet they are implicitly subsidised at present.  This scheme involves removing this subsidy for those regions, making whatever issues we are inherently concerned about there worse.  This isn’t to say we shouldn’t do it, just that we also need to consider side-effects in this manner – even IF the average household was better off, there are distributional consequences

The nature of the tax rebate

By giving everyone except the poorest a lump sum payment, the tax rebate involved from the ETS has its own distributional consequences – consequences we can argue about regarding both fairness and efficiency.

We shouldn’t just “throw” some type of tax rebate in the scheme, we need to ask about what the best type of tax rebate is to meet a given policy objective.

I am not going into detail here – but a tax-free threshold isn’t what economists usually consider when discussing this type of policy.  Instead this is a targeted form of progressivity – and so needs to be justified on that basis as well.

The ETS, Kyoto, and the externality

The externality is an interesting one.  To quote myself from Keith Ng’s facebook wall.  [Note:  At the start of this comment I talk about whether the costings are reasonable – I’m not covering that in this post, so take that as my comment ]:

Hmmm the report does cover it – but it decides to work with partial equilibrium discussions of the price change in a few categories, rather than doing a CGE model of the full impact. So by default the benefits will be exaggerated – but not as badly as if costs had been completely ignored.

I also didn’t see reference to payments due to Kyoto liabilities, which was the justification for an ETS initially. I wonder what happens there? Without the justification of Kyoto payments this becomes a very different question.

Essentially, we face a prisoner’s dilemma in the world for dealing with climate change – but the actions of NZ are inconsequential (due to our small size). We joined Kyoto to try to solve the PD – but if that is out of the question we have to ask what our “best response is” given what the rest of the world will do. In this case, investing in ways to mitigate the costs to NZ becomes the most sensible way forward – rather than targeting a non-existent externality (due to NZ’s small size once again).

John touches on the small size argument here, but I don’t find his reasons sufficient to undermine the small size argument in this scenario (eg demand is irrelevant if we are in a world with no agreement, and taxing industries for a “technological” dividend isn’t a compelling argument).

If we are discussing a world where Kyoto liabilities disappear, where is the externality from our production of carbon emissions?  Whether NZ cuts emissions to zero, keeps emissions unchanged, or doubles emissions, the probability of a GWE (global warming event) and the intensity of said event will be unchanged.  Just like with most of our commodity prices, the chance of global warming is outside the hands of our policy makers.

In this case, producers arguably AREN’T creating an externality.  We are just taxing them for kicks.  Now there are arguments for a tax (showing the rest of the world we are serious about climate change, having the moral high ground on an incredibly important and scary issue), but it isn’t the externality argument.  Kyoto, by putting in a liability for nations, creating the externality regime we justified the NZ ETS/tax argument on – if that is gone, the argument is different.

I have no doubt these words are incredibly unpopular, but I couldn’t really care less – instead, if we are accepting a policy framework where Kyoto has failed and a GWE is very likely we need to change tack in terms of our concern.  Namely, the role of policy is now about investigating the risks NZ faces in light of such an event, and helping us co-ordinate preparation.  It becomes one of insurance and civil defence.

Now, if we do believe in a central agreement about global warming – and that we need an ETS/tax in place to pay for this and give firms/households certainty, that is cool.  But then the tax is used to fund these liabilities NOT to cut taxes – something that I haven’t been able to find reference too so far in the report!  To me, this is an extremely important issue to get clarity on!

I am not against it per se, and given they are saying that in the first year they will have a working group to determine the details there isn’t too much I can dig my teeth into here.  As a matter of principle I am:

1. Against industrial subsides
2. For policies that help to improve matching and adjustment to changing economic reality

This policy is doing a bit of both, so I would need details before I can say much.  But the money quote for me from the policy document is this:

The Green Investment Bank (the Bank) will primarily act as an independent and expert facilitator of green capital. It will match funders to projects that produce financial and environmental dividends providing additional capital, where needed, and cleantech investment expertise.

This is as close as we get to potential details.  Essentially, government will take on half the capital of firms that are approved as “Green firms” – this type of public-private partnership will ensure that the taxpayer takes on some of the risk, and get some of the reward, for a bet on New Zealand green technology.  This incentivises the entry of firms into this industry by both reducing capital requirements and, through the nature of the partnership, giving firms an implied subsidy (by passing downside risk to government) – in a political environment where this is a flagship policy, there will be an incentive for government to keep sending money after bad firms, in order to avoid failure.

Now these political economy issues are ones we can work past, by having transparency and specific types of contracting in the “investment bank”.  But, I’m still unsure why we need public ownership here – why should government be holding these “Green assets”.  This isn’t just a way of incentivising a specific type of investment (which in itself is something I am uncomfortable with – unless it is based on an explicit externality or market failure) but also a way to increase the net asset holdings of government.

This is not just a criticism of the Greens though.  By aiming to run constant surpluses and build up assets, National, Labour, and even ACT (to some degree) are looking at expanding the government’s claim on national wealth.  Perhaps this is something we should have a bit more of a public chat about

Note:  The “source” of funding is a separate issue.  I don’t disagree with the Greens about higher taxes for resource extraction, which is merely the negotiation for the surplus of an already publicly owned natural resource/asset.  But remember, this “tax” could just as easily go into the general fund and fund completely different things – the “goodness” of the two policies aren’t conditional on each other.

I was interested to see this article on stuff about Greenpeace arguing for  a “green” economy. I even considered taking a peak at the report they have put forward by the  “German Aerospace Centre’s Institute of Technical Thermodynamics” until I got to this bit at the end of the article

Where the report stumbles is on the financial side, giving no detail on the level of investment required or the economic tradeoffs, making it impossible to judge if the transformation would be worthwhile or simply a pyrrhic environmental victory.

Argent said this was a deliberate choice, with the aim of the report to spark a discussion rather than getting too bogged down in the numbers.

Which basically means this report tells us nothing….

As a side note, as an economist I would replace “financial side” with “opportunity cost”  as it it’s not just “money” trade offs that need to be considered…social, environmental, and any other metric that will be part of the cost need to be considered. You can’t just look at non-monetary gains on the benefit side and ignore them on the cost side.

1. The person has an eating disorder
2. The person gains disutility from eating a dead animal/causing the death of an animal
3. The person gains disutility from the view that, given current institutions, the consumption of meat is unsustainable/damaging – specifically that the choice to eat meat lowers the lifetime welfare of future generations.
4. Update:  Health, I forgot health – some people do it for health reasons.

Now I have recently gone vegetarian myself.  My reasoning was the second one.  This is strange given things I have previously said, I know –  implicitly I do believe that if the animal only lives because it is going to be consumed, and that the life it lives is a good one, then it is morally right to eat the animal.

However, I am viciously time inconsistent.  When it comes to the final stage of the animals life where it must die, I can’t handle the personal disutility I gain from the idea that the animal died to feed me.  As a result of my selfish choice not to eat meat, the animals I would have consumed never get to live those beautiful free-range lives that they deserved.  Not to worry though. See it here first.

Anyway, I haven’t come here to discuss myself, I’ve come here to discuss the sustainability issue.

Is meat consumption sustainable in our finite world?

Lets note something down here.  Prices represent scarcity, as long as the “price is right” the consumption of meat is perfectly sustainable.  As Eric says:

There’s no need for a moral imperative to reduce meat-eating. Get rid of subsidies in the agricultural sector, make sure effluent externalities are properly priced or regulated, then let relative price adjustments take care of the rest. The optimal amount of meat will be eaten, so long as we keep waving our hands about the moral questions.

However, people who do not eat meat on these grounds have exactly the same argument.  They would say:

• Meat is subsidised.
• Externalities are not priced, regulation is not appropriate.
• We discount the future too strongly, relative to what we believe is morally right.

Given these sets of factors people turn around and say “what can I do”.  With the price too low, there is a relative overconsumption of meat, an overutilization of land into the production of meat, an excessive degradation of the environment.  In this context, it is completely consistent of people to say they will go vegetarian to deal with it – however, instead of complaining about the unsustainability of meat in of itself, it might be better that they say that the “price is wrong”. If you want to learn about how meat is stored for being sold and to be transported, get more information from this new blog post.

I would argue that governments should come together and ensure that the worst of these issues are fixed, namely that subsidises on agricultural production are removed.  Then these people can get back to enjoying the consumption of meat, knowing that the higher price they are paying represents truly sustainable practices.