Economic approach to environmental sustainability of protein foods

Intensive animal production systems in Europe, particularly in the Netherlands result in a series of environmental problems mainly due to manure surplus. This study aims to make contributions to identifying the solutions to the problems related to protein production and consumption. The first contribution is the theoretical modelling of environmental problems. Theoretically we represent the environmental impacts by including the biophysical process of environmental changes and the feedback to the economy in welfare optimization and equilibrium models. However, this often brings non-convexities and thus has implications for policy recommendations, because a non-convex program usually has multiple local optima and has the difficulty of decentralization. Particularly we illustrate how to solve a non-convex program using parameterization for the interaction between pork and crop production and how to check decentralizing ability of the welfare optimum. The second contribution is a systematic analysis of protein chains, which provides information on their environmental pressures. We use the environmental life cycle assessment (LCA) to compare the environmental pressures of a Dutch pork chain and a pea-based chain for Novel Protein Foods (NPFs). We conclude that NPFs are environmentally more friendly than pork in terms of some environmental pressure indicators. The third contribution is the empirical application of Applied General Equilibrium (AGE) models to analyse the economic and environmental impacts of enhanced consumption of NPFs under different scenarios in the global context. Our model results show that an exogenous shift from animal protein foods to NPFs in the EU, which is represented by an increased expenditure share of NPFs in protein budget, will decrease the NH3 emissions. If the EU consumers are willing to pay to improve the air quality, the EU will reduce the pork production and increase pea production. If the `rich¿ consumers consume more NPFs through lifestyle change in meat consumption, the global emissions of NH3, N2O and CH4 will be reduced