Sunday, August 16, 2009

Climate Change and Food Prices

Readers are becoming increasingly aware that fighting climate change will raise food prices (see below). If we "should" try to curb emissions (which I personally am not so sure), then two things need to happen...

(1) Yes, overall food prices must rise. In the U.S., this would probably be more of a benefit than a cost. We eat too much, and would benefit from a reduction in calories. Emitting less gases does require us to be a little poorer.

(2) But more importantly, the relative prices of goods should change in a manner such that goods which emit more greenhouse gases cost relatively more, and those that emit less emissions cost relatively less.

The fact that food companies are remarking that food prices will rise only indicates that the proposed climate change bill is doing its job. If it did not alter our food consumption behavior through a change in prices, it would not be fighting global warming.

Food Firms Fret Over Potential Impact of Climate Bill

Coalition, Including Agricultural Giants, Plans to Draw Attention to Concerns That Legislation Could Lead to Higher Food Prices

Some of the nation's biggest food and agriculture companies are planning to release a flurry of studies in coming weeks that scrutinize the potential impact of climate-change legislation, warning that it could lead to higher food prices.

A group of agriculture giants including Cargill Inc., along with meat company Tyson Foods Inc. and food maker General Mills Inc., is concerned the companies might bear a disproportionate share of the costs of such legislation, according to a memo reviewed by The Wall Street Journal.

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