Labeling carbon like calories

The world emitted 32.5 gigatons, or 32.5 billion metric tons, in 2017. Globally, agriculture accounts for 24% of these greenhouse gas emissions, with livestock accounting for about 14.5% to 18%. This makes animal production alone more polluting than the entire global transportation industry. And though agriculture isn’t always the most popular topic when it comes to policy conversations around climate change, the data make a compelling argument to change the way we consume livestock.

Pie chart showing emissions by sector. 25% is from electricity and heat production; 14% from transport; 6% from residential and commercial buildings; 21% from industry; 24% from agriculture, forestry and other land use; 10% from other energy uses.

Source: EPA

According to Drawdown, the self-proclaimed  “most comprehensive plan […] to reverse global warming,” a shift to plant-rich diets is the fourth most impactful solution (out of 80) to achieve this goal, with the potential to reduce atmospheric CO2 by 66.11 gigatons.

 If 50 percent of the world’s population restricts their diet to a healthy 2,500 calories per day and reduces meat consumption overall, we estimate at least 26.7 gigatons of emissions could be avoided from dietary change alone. If avoided deforestation from land use change is included, an additional 39.3 gigatons of emissions could be avoided, making healthy, plant-rich diets one of the most impactful solutions at a total of 66 gigatons reduced.

Despite the well-documented research on the benefits of a plant-rich diet, global meat demand has remained untouched, and consumption in all animal categories has increased linearly since the 1960s. It doesn’t appear to be slowing down.

Source

A recent paper authored by Joseph Poore of Oxford University and published in Science indicates both alarming new research regarding food emissions and revisits pragmatic solutions. Poore’s findings corroborate existing research that animal products, particularly red meat, contribute substantially more to greenhouse gas emissions than any plant based food. Average emissions, or kilograms of CO2 equivalent, for 100g of protein in beef are 50 kgCO2eq. For peas, that number is 0.4 kg, or 0.8%. Beef emissions are unequivocally higher, even when factoring in high quantities of “food miles” that many plants bear. Food miles indicate the distance, say, an avocado from Mexico has to travel to the café in Notting Hill where you enjoy your avocado toast on a Sunday morning.

Poore revisits a powerful solution: give more power to the consumer. Food consumption is a uniquely personal choice involving individual preferences and dietary requirements, making any restriction on high carbon food consumption undesirable. Poore advocates for labeling a food’s carbon impact, a measure that would aim to reduce the overall demand for animal products. Reducing demand would theoretically reduce production, as is necessary in the free market, profit-maximizing model. In practice, carbon labeling would look like an additional piece of information required on nutrition labels. Carbon impact, like calorie content, would be required.

On unpackaged food, carbon may be labeled on the grocery store tags or on the glass panes that shelter the meat counter. Enforcement of a policy such as this not only democratizes information regarding food impact, but also allows customers to make conscious choices about the foods he chooses to purchase.

Providing more information to the consumer nearly always sounds like a good idea. But there are very real costs associated with a benefit such as this. Labeling all food products requires impact studies and manufacturing changes. Simply updating a food label costs businesses, on average, $6,000 per SKU, a significant cost for firms that produce hundreds of food items. We could imagine that labeling carbon may cost much more, as there are no current metrics to update—the data would have to be created for the first time. This information would be gleaned from impact studies, research that derives from tracing each ingredient to its origin and calculating its carbon impact throughout the supply chain, an activity that is sure to be much more costly than traditional nutrition labels, where information can be tested and obtained in a lab. Supply chains are rarely transparent or easy to track, and doing so will cost substantial amounts of money for companies to comply. There is also the matter of verification. Should companies be charged with labeling the carbon impact of each product, it would be easy, and almost predicted, that some of those numbers may be inaccurate and, therefore, counterproductive. To execute this successfully there must be verification agencies in place—auditing for environmental impacts, not just financial ones.

To many companies, $6,000 or more per item is pocket change. For others, like emerging start-ups in the food industry or small family farms, it’s the end of a company. That said, food giants are constantly updating their labels to market their product’s “new look, same great taste!” Carbon labels gives companies a new excuse to rebrand! This does, however, puts extraordinary pressure on small players in the industry like family grocers, many of whom are providing the healthiest, least polluting items. This dynamic indicates the need for government subsidies to assist financing large projects such as this.

Government subsidies may cause public outcry, particularly given the intense budget negotiations and lobbying power in Washington. In 2017, the United States government issued $16,185,786,300 dollars in farm subsidies, over $7 billion of which was allocated to commodities. Over $5 billion dollars was allocated to corn subsidies alone in 2017, a crop that’s primary use is—yes—to feed livestock.

chartSource: World of Corn

If we were to allocate a fraction of these subsidies away from crops that we artificially overproduce, we could provide substantial funding for these impact studies that may assist in tangibly relieving the environmental impact of carbon in the food system. This money would not be difficult to find—the low-hanging inefficiency fruit in the budget office is bountiful and ripe. The Economist reports that “between 2007 and 2011 Uncle Sam paid some $3m in subsidies to 2,300 farms where no crop of any sort was grown. Between 2008 and 2012, $10.6m was paid to farmers who had been dead for over a year.”

By offering initial subsidies to domestic companies, we could numb the pain of a potentially jarring regulation to offset the initial start-up costs associated with new research and a new labels. After this research and methodology improves and becomes standardized, government subsidies could eventually be eliminated, and costs to individual companies would be normalized.

Do we really need to put a carbon label on kale, though? Can’t we trust the common consumer be educated enough to distinguish between environmentally impactful foods and benign ones? Not really, and it’s not because consumers are inept. Adrian Williams, an agricultural researcher commissioned by the British government to study the carbon imprint of different foods, addressed this succinctly in a 2008 New Yorker essay.

“Everyone always wants to make ethical choices about the food they eat and the things they buy… And they should. It’s just that what seems obvious often is not. And we need to make sure people understand that before they make decisions on how they ought to live.”

Perhaps the most glaring hurdle to implementing these labels is educating consumers enough that they understand them. In 2007, Tesco, the largest supermarket chain in Britain, pledged to put carbon labels on all 70,000 of their products. Four years into the project, the grocer abandoned the initiative “because the message [was] too complicated” after labeling only 500 products. Though the move to change business strategy was multi-faceted, Tesco’s decision ultimately came down to two elements: no one else followed suit, and consumers didn’t know how to read them.

Developed with the Carbon Trust, most of these labels appeared like black and white footprints with the correlated grams of CO2 emitted printed in the middle. And while these labels offer a point of comparison in the lower corner, most consumers simply look over this fact. When I myself was living in London for a few months, I saw these labels frequently and had no idea what they were, and I didn’t bother to find out, either.

These labels must not only be designed better, but we must also educate the public about what they mean. This means more media coverage, more government campaigns, and more exposure to the labels at a young age. Demand and, therefore, the carbon impact of the food system, will not change if consumers don’t know what’s going on.

As with all new ideas, these suggestions are bound to bring warranted debate and discussion, but the debates alone should not discourage us from enacting such policies. As with any action, there are trade-offs. An investment in labeling carbon is a plausible first step towards investing in a new version of economic growth that considers environmental health in addition to financial.

A common argument against carbon labeling is the question of where in the supply chain tracking begins. And doesn’t it all get too complicated? We can get wrapped up in the idea of where the carbon tracking starts and if the gasoline the farmer used to buy the seed that planted the corn should be accounted for in that model. But those nuances, while crucial in the execution, miss the point. Carbon labeling gives us the benefit of comparison between products. It doesn’t matter where in the supply chain it starts, as long as its standardized and a true reflection of reality. The most crucial element of this all is that the average man going grocery shopping on his way home from work can easily see that a pound of ground beef produces a lot more carbon than a pound of turkey. It’s then up to the consumer how far he wants to exercise his carbon freedoms. Maybe he’ll become a vegetarian, but maybe he’ll just choose to eat turkey tonight. That may be where we are as a society right now. And that’s okay.

Because there will not be a strong economic advantage to choose a food item lower on the carbon impact scale, it’s necessary to note that this measure alone will not sufficiently change market conditions to reduce emissions. It is, however, a powerful way for early adopters to advocate through purchases, and an effective way to spread information about the impacts of individual choices on the environment.

On a practical level, this is a policy for consumer education. On a philosophical level, this is a policy to get people closer to the goods they consume, exposing, label by label, what’s really going on in the supply chain.

To be clear, labeling carbon will not curb emissions enough to actually meet the IPCC’s goal of 1.5 degrees C of warming. True and meaningful action requires putting a real price on carbon reflective of its value and integrating the environment into our economic fabric. This policy must be part of an ecosystem of changing action, thought, and discussion. This policy is forcing consumers to literally look at their choices in black and white and show them the environmental costs of a lifestyle. Carbon labeling is not going to save the icecaps, but it may be our best chance at bringing consumers closer to the goods we consume.

Uber vs. NYC Taxi Drivers

As innovation in technology expands, so does the impact on many traditional industries. Accompanying these advances comes a shift in which jobs are in higher demand, and which jobs are threatened. Uber has revolutionized the car service market. It provides its customers with low prices, convenience, and comfort. This has caused harm to taxi companies, especially in cities like New York with an embedded high demand for taxis. Uber and other similar services have caused devastating change for traditional taxi drivers. New York City has made attempts to regulate Uber and other for-hire services in order to create a more competitive field for taxi drivers. Despite these efforts, it is unclear how long the advances in technology can be controlled. 

New York City taxis operate under a system that is controlled by medallions which are essentially licenses needed in order to operate a yellow cab. A driver who bought a medallion for a low six-figure sum could borrow against its rising value, and then use those proceeds to improve his quality of life. There are some family-run fleet operators who own hundreds of medallions. Unfortunately for established drivers, the cost of a medallion has plummeted since Uber has entered New York. (Berger) In 2013, the cost to purchase a medallion hit $1.3 million. However, by March of 2017 the price of a taxi medallion crashed to its lowest level in a decade when one was sold for $241,000. In January 2017, medallions accounted for 48% of total trips logged by yellow taxis, which is down from 68% in January 2016. Additionally, in 2016 lenders foreclosed on 39 medallions, which is more than triple the amount of 2015. (Agovino) Banks stopped lending to the majority of medallion buyers a few years ago because they were no longer solid investments. Mr. Daus heads a firm with several clients with large medallion portfolios. He believes that taken together the sales show that “the market has already bottomed out,” and indeed there are signs that the market for medallions may have stabilized. New York City closely controls the issuance of medallions, which number around 13,600 which prevents further devaluation. The problem is that given the market declines, many medallion owners owe more than the value of their medallions. (Berger) Once Uber entered the New York City market, too many drivers were chasing too few passengers and that pressure seems unlikely to change.

While it was originally assumed that Uber was only targeting neighborhoods with an already limited supply of taxis, this appears to not be the case.  

This graph demonstrates that there is an increase in Uber drivers in the central business district, which is known to be a hotspot for taxi hailers. From June 2013 to June 2015, Uber’s pickups in the central business district rose from around 175,000 to 1.8 million, while taxi pickups have fallen by around 1.4 million. This means that in a neighborhood where Uber and taxis directly compete, only 13% of the growth in Uber rides resulted from a growth in demand. The remaining 87% have replaced trips that would have gone to taxis. Additionally, passengers tend to use Uber more for late night trips due to its convenience and comfort. Citywide, taxi rides between the hours of 11pm to 5am have fallen by 22% from June 2013 to June 2015, while taxi ridership has declined by 12% in the hours of 5am to 11pm. (“A Tale of Two Cities”) Given the meaningful market share of Uber, it is clear that many passengers seems to favor Uber’s services. 

Uber’s original business approach was geared towards growing quickly so that others couldn’t replicate its model. CEO Travis Kalanick instilled a hyperactive management style that valued speed over integrity. He did this to preemptively wipe out competition by gaining market share and dollar gains in its early days. However, the finish line for this strategy is yet to be in sight. Despite the disruptive effects of Uber’s aggressive pursuit of market share, the overall demand for rides is still surging. Uber has recorded that the number of completed rides in the first quarter of 2017 has tripled compared to the first quarter of 2016. Currently, the momentum of the company coupled with its $7.2 billion cash hoard should ensure Uber’s survival. Looking forward, Uber’s best plan of action would be to engage in vertical integration in order to beat out its competition. This would consist of controlling the newest automobile technology. While Uber does not seem to be willing to lock down its employees using employment contracts, it could dominate the market by eventually owning a fleet of self-driving cars. These vehicles could be the realization of Uber attaining tech-giant status. (Mims)

Uber’s business model relies on the network effect. This means that the indirect values and goods of the company grow as more people use the service. Uber was able to out-compete traditional taxis with lower prices. However, it is impossible to determine how long Uber can maintain these low prices. Uber does offer its customers other advantages in addition to pricing. It provides ease of use through its simplified ordering process, ability to track the driver, simplified payment process, and easy ability to split fares. It instilled practical features such as its method of rating drivers, its consistent branding, its electronic receipts, and its choice of cars which range from standard to lux. The business model of Uber in itself is quite simple. It does not own any cars so all that is required is the use of technology to connect drivers with rides. The company, then, takes a portion of the transaction. In the early stages of the company, Uber spent almost no money on marketing relying on word of mouth. Uber’s initial challenges consisted primarily of: how easily and cheaply competitors could replicate the service. Competitors could improve on Uber’s model in certain cities and take market share. Additionally, the requirement that Uber launch in many cities around the world in order to preempt competition was difficult to manage. Clearly, Uber’s biggest obstacle is competition. (Koch)

In seeking growth, Uber hugely effected the lives of taxi drivers. Some drivers suffered extreme consequences. Nicanor Ochisor was an immigrant from Romania who worked as a NYC taxi driver. Ochisor had bought his medallion almost three decades ago. Initially that was an excellent investment, but after the introduction of Uber, the value plunged by 2018. Despite working 12 hour shifts, he was bringing home less money than before. In March of 2018, Nicanor Ochisor committed suicide. There has been a marked increase in deaths of drivers  given the economic pressures facing many taxi and livery drivers. Between January of 2018 to May of 2018, 4 drivers took their own lives. (Fitzsimmons) The situation has become so drastic that it has become clear that regulations are needed to prevent Uber and other similar services from destroying the taxi industry. 

To combat Uber’s growth, the New York City Council created a cap on the number of for-hire delivery and transportation vehicles in the city. Additionally, in August 2018 the council put a halt on issuing new for-hire vehicle licenses for 12 months giving the counsel time to study the rapidly growing industry. Companies like Uber and Lyft will be required to provide the council data on usage and charges or they will face a $10,000 fine for noncompliance. New York is Uber’s most profitable market, yet it is the first United States city to propose a temporary restriction on the total number of vehicles. Yellow taxis are a staple of New York and the council is fighting to keep them afloat. Uber is arguing that creating a cap will leave drivers without an income. It will also disproportionately harm low-income and minority residents in New York’s outer boroughs who lack easy access to many forms of public transportation as well as access to taxi services. (Wodinsky) Despite Uber’s protests, New York does plan on mandating benefits for Uber drivers with these new changes. 

New York City regulators are planning on raising wages for Uber and similar services. Uber is known to be less expensive and more comfortable than taxis, but many of the drivers are struggling to earn a good living given the pay structure. Under the new regulation, if a driver’s profit fall below $17.22 per hour over the course of a week, the companies will be required to make up the difference. Currently, in New York City, about 40% of drivers have incomes so low that they qualify for Medicaid while about 18% qualify for food stamps. Some drivers bought vehicles believing the claim that they could make up to $5,000 during their first month of driving. They now feel trapped as their earnings fall short. (Fitzsimmons, Scheiber) Uber’s objection is that this will cause a rise in prices for consumers. This impact on pricing actually helps the regulators’s initiative. If Uber must pay their drivers higher wages, then the number of drivers hired will be limited and the cost of Uber will go up. Being unable to hire more drivers will enforce the cap on Uber and higher Uber prices will create more equal competition between Uber and taxi drivers. 

Taxi drivers in European cities have also faced decline in business due to Uber. The responses there have been more aggressive. In London, drivers brought streets around Trafalgar Square to a stop while honking their horns and holding signs in protest of the new technologically savvy driving services. In Madrid, hundreds of drivers marched through the streets blowing whistles. One banner read, “For the security of passengers and the future of taxis: Uber is illegal.” Also in Madrid, protestors surrounded and pounded on two black sedans that were unlicensed taxis. The front and rear windows of the one of the cars were broken. In Italy, taxi drivers handed out leaflets denouncing Uber and hung a banner that read, “Illegality Reigns Sovereign!” In Naples, dozens of taxi drivers protested in the city’s center, blocking traffic for hours. In Paris, hundreds of cabbies led strikes causing traffic jams and altercations between taxi drivers and drivers for other services. Finally, protests spread as far as Rio de Janeiro. While the city prepared itself for the 2014 World Cup, dozens of taxis formed lines and moved slowly along the Copacabana. (Fleisher) Clearly, taxi drivers around the world are prepared to fight for their jobs.

Uber was created as an industry disrupter seeking to defeat many of its competitors. Uber’s goal was to revolutionize the for-hire car service industry. The strategy was to grow quickly and gain a large customer base. Uber accomplished its goal by starting up in cities all over the world and by providing low prices. Unfortunately, this strategy decimated traditional taxi companies and its drivers and owners. Taxis have experienced massive declines in ridership which is especially felt in New York City where Uber has one of its largest customer bases. While regulations have been put in place to help the taxi industry, it is unclear whether these trends will ever be reversed. 

https://www.wsj.com/articles/with-kalanick-out-ubers-troubles-are-just-beginning-1498049054

https://www.entrepreneur.com/article/286683

https://www.cbsnews.com/news/how-much-is-a-nyc-taxi-medallion-worth-these-days/

https://www.wsj.com/articles/is-the-market-for-new-york-taxi-medallions-showing-signs-of-life-1516228199

https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay-nyc.html

https://www.theverge.com/2018/8/8/17661374/uber-lyft-nyc-cap-vote-city-council-new-york-taxi

https://www.nytimes.com/2018/05/01/nyregion/a-taxi-driver-took-his-own-life-his-family-blames-ubers-influence.html

https://www.wsj.com/articles/londons-black-cab-drivers-protest-against-taxi-apps-1402499319

https://www.economist.com/united-states/2015/08/15/a-tale-of-two-cities