Illustrative Case Studies

Are consumers minimizing energy use by purchasing products according to distance travelled? This is essentially an empirical issue. In addition to the production method, distance traveled, and mode of transport, the retail system (e.g., supermarket or farmers’ market), transport method to home (e.g., walk, bike, or car; distance; also, was the outing a specific trip for food or was it combined food shopping and other activities), and food preparation methods (e.g., raw or roasted) are also important in an analysis of energy use.

Interestingly, some product lifecycle studies found that the greatest energy use occurred when moving the produce from the retailer to the consumer. This was because consumers often drive an empty car to the shop, then drive home with five or ten kilograms of groceries in a one-ton vehicle. The energy use per kilogram on the trip between the retailer and the consumer’s home was found to be greater than the cumulative production and distribution costs to that point.

Saunders and Hayes (2007) summarized some recent studies looking at energy use and greenhouse gas emissions. In some of the studies cited, energy use and emissions were discussed in the transport phase only, but a few also included other phases of the supply chain, such as farm production, the packing and packaging system, storage, distribution to wholesalers and retailers, transport to home, and household use. Few included all these stages.

Most of the studies focused on local energy use and emissions for production within developed countries, with some comparisons done between local goods and production and transport of items imported from abroad. For example, Van Hauwermeiren et al. (2005), as reported in Saunders and Hayes (2007) compared emission levels from farm to retailer of tomatoes grown in Belgium for local consumption (both organic and conventional, grown outdoors; and conventional grown in greenhouses), imported from Spain by truck (conventional), and imported from Kenya by air (conventional and organic) (Table 1 [ PDF 27.3KB | 1 page ]).

Two features of Table 1 are the high emissions for produce grown in a greenhouse (third entry for Belgium, column 3) and for airfreight (both entries for Kenya, column 4). Emissions for tomatoes grown in a greenhouse (1459g CO₂/kg) are far greater than the emissions for tomatoes produced by the open-air method (18.6g CO₂/kg for conventionally grown tomatoes). Organically grown tomatoes (11.5g CO₂/kg) produce fewer emissions during the growing process, and importing from Spain (307g CO₂/kg) pollutes less than buying locally grown greenhouse tomatoes (1543g CO₂/kg). However, airlifting tomatoes from Kenya (8510g CO₂/kg) creates considerably more pollution than growing them locally in greenhouses. The only way to justify buying greenhouse or airfreight tomatoes is if energy comprises a small share of total resource use (expressed in retail price). For example, a carbon tax of €20 per ton would raise the cost of air freighted Kenyan tomatoes by €0.17 per kg on tomatoes with a retail value of €3–4 per kg.

In another study reviewed by Saunders and Hayes (2007), Jones (2006) described a similar situation for green beans grown in Kenya and airlifted to the UK. In his study, energy requirements for beans were similar at the two locations (0.82–1.38 megajoules per kg [MJ/kg] for production in the UK, and 0.69–1.72 MJ/kg in Kenya). With the same energy requirements for packaging at each location (3.92 MJ/kg), Jones calculated a total of 4.74– 5.30 MJ/kg for beans produced and sold in the UK, and 62.51–63.54 MJ/kg for Kenya-grown beans exported to the UK. These figures, however, do not include storage costs. Examples of energy use (emissions) required to ship goods between two developed countries (including by sea), are given in Saunders, Barber, and Taylor (2006). They compared energy use (emission levels) in the production and transport of dairy products, apples, onions, and lamb from New Zealand to the UK (Table 2 [ PDF 27.1KB | 1 page ]).

It is clear from the data in Table 2 that, when considering the total lifecycle of a product (in this case production and transport from New Zealand to the UK, assuming similar costs for domestic transport and distribution within the UK), local consumption does not necessarily result in lower energy use or lower carbon emissions.

The ratios in Table 2 show that energy use (measured in MJ/t) and emission levels (measured in kg CO₂/t) for the production and transport of the four products can be considerably higher when production takes place in the UK than when it takes place in New Zealand. This is especially the case for lamb (with energy and CO₂ levels four times higher in the UK), although less so for onions. On the face of it, emission levels are higher for onions grown in New Zealand, but if energy used in storage during the months that onions are not produced in the UK were to be included, the UK energy use would be 30% higher than that in New Zealand. British consumers who wish to minimize energy use should be buying dairy products, apples, onions, and especially lamb from New Zealand, rather than from local producers. Other externalities, such as accidents and noise,, should also be taken into account.

Some organic organizations have considered banning international trade in organic agriculture (by refusing the use of the logo of the dominant certifier to the potential exporter), If this occurs, it is useful to examine how importer and exporter are affected.

Gibbon and Bolwig (2007) gave examples of the costs involved in exporting organic products to the UK from two African countries (Kenya and Ghana), if airfreight were to be banned by the Soil Association in the UK.

A number of scenarios were examined. Outcomes depend on many factors, such as reactions to the ban from supermarkets in the UK; whether exporters and importers were wholly or partially dependent on organic produce; whether airlifted produce was for yearround supply, supplementing out of season produce, or to temporarily alleviate acute shortages in certain produce; and whether the enterprises examined in Kenya could revert to marketing of conventional produce after the ban, or whether they would need to close down.

If UK supermarkets accepted other certification schemes than the Soil Association’s, the outcome was expected to be close to “business as usual,” both in the UK and in Kenya.

However, if supermarkets were to continue mainly or exclusively carrying products certified by the Soil Association, drastic changes could be expected in both countries. In the UK, changes would include the disappearance of virtually all air-freighted organic produce from supermarket shelves, losses in direct annual retail sales of £42 million, flow-on effects of another £4.9 million, and long-term effects of a similar scale.

For exporters in Kenya, the effects would also be drastic. A Soil Association ban on airfreight would affect two large fresh produce exporters, and at least three other operations certified as organic, although only the two large exporters are discussed here. For these two, organic produce comprises only a small part of their total operation: approximately 100 hectares (ha) certified organic, in addition to 25 ha under conversion, and 42 ha certified organic but without infrastructure. Exports are mainly bulk baby leaf salads and fine green beans.

If supermarkets ban the sale of air-freighted organic produce, both exporters said they would abandon organic production and go back to selling only conventional produce. This would result in a decrease in prices for their exports (loss of organic premiums). In the case of fine beans, these lower prices would be partly offset by an increase in productivity and a decrease in the number of workers needed for conventional management. In the case of baby leaf salads, the decrease in prices would not be offset by those same factors (reasons not provided). Both exporters mentioned that, as their ability to supply both conventional and organic produce gave them increased bargaining power; that would be another area in which they would be affected.

A large part (60%) of the investment in infrastructure for organic farming (conversion period, certification, consultancies, and training) would be lost. Lack of cross-pollination of ideas from organic to conventional farming practices (i.e., adoption of some of the methods used in organic farming) was also seen as a potential loss. Losses suffered by contracted farmers would be even higher, as they would experience problems with rotations that would need to include different crops acceptable to local consumers.

Other effects of a ban on air-freighted exports would include those on farm employees (approximately 700), as half the workers at the two establishments would likely lose their jobs. This would particularly affect casual workers who, in Kenya, are often older women. Apart from loss of income, the workers would also lose benefits such as free lunches, medical care, and child care. An estimated six to eight people are dependent on a single worker’s wages in Kenya, and that, on average, for each worker employed, another half a person was further employed in support of the original worker’s job. Knowledge about sustainable practices in organic agriculture could also be lost, such as knowledge about what to include in the rotations for soil and pest management, and about use of compost. In the words of one of the exporter-growers: “[It] would affect us technologically. It would be like going backwards. Organics is a business that has made us think outside the box. If conventional customers want us to move toward a residue-free product then the technical knowledge will have to come from organics” (Gibbon and Bolwig 2007: 22).

Less direct, down-stream effects were calculated, such as loss of sales within the community of local resources (e.g., straw and animal manure). These losses would have a significant impact on the local informal sector.

Of course, the loss of this sector in Kenya would create opportunities for countries closer to the market, such as northern Africa. However, this example serves to show that a ban based on distance or mode of transport may have unintended consequences.

Product-based studies do not capture the interactions between sectors and countries. A New Zealand paper by Ballingall and Winchester (2008) looks at the impact on importing and exporting countries of a shift in preferences in the UK, France, and Germany towards purchasing produce that has traveled shorter distances. The authors used a general equilibrium model, where imports are differentiated by country of origin, making New Zealand lamb a unique product, not only in relation to domestic (e.g., UK) lamb, but also in relation to lamb from competing countries, such as Australia. Ballingall and Winchester’s paper is innovative in its approach, in that it incorporates a measure of distance traveled into consumer preferences. This enabled the authors to show the likely impact of changing preferences on trade flows.

In importing countries where preferences have shifted in response to the concept of food miles, domestic producers would benefit from higher domestic prices, but the economy would be worse off overall because consumers would be limited in their source of supply. Exporting countries, in this case, New Zealand, would be worse off as a result of lower export prices, while importing countries, such as Japan, that do not have a preference for locally produced goods, would benefit from the lower prices and increased supply of New Zealand lamb. Empirical estimates indicate that the major negative impacts of a preference shift would be on poor, agriculture-dependent exporting countries, such as Malawi, which exports a high percentage of their production to Europe.⁷ Countries located further away, such as South Africa, might not be as adversely affected as countries like Malawi, as fewer of South Africa’s exports go to Europe. New Zealand could experience losses amounting to $135 million, or 0.3% of GDP, if 80% of European consumers switched to homegrown products. This loss would diminish by two-thirds if European consumers demanded homegrown goods, but were not overly particular about the distance that imported food had traveled. A region that would benefit from a preference shift in Europe is South East Asia. This region as a whole would gain because exports that had gone to Europe in the past would be diverted elsewhere, such as to Japan and Korea, lowering import prices in the region. However, it is possible, indeed likely, that individual countries and specific sectors within South East Asia would be worse off following an effective European food miles campaign. The general equilibrium framework highlights the gains and losses that flow from a shift in preferences.

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