The economic consequences of veganism

We hope you enjoyed your Christmas turkey. But should you leave the poor beasts alone next year and serve tofu on the big day instead? Stuart Watkins reports.

100% Vegan statement of lifestyle choice
(Image credit: Peter Dazeley)


Around 7% of us are now vegan
(Image credit: Credit: LightField Studios Inc. / Alamy Stock Photo)

Simon Amstell is that apparently rare thing a vegan with a sense of humour. He is the writer and director of the 2017 film Carnage, a mockumentary set in the Britain of 2067, when the eating of meat and all other animal products has been banned. Young people take the new regime for granted and struggle even to understand the moral order that has passed; older generations examine their consciences and suffer from feelings of guilt as they wonder what kind of monsters they must have been to eat meat, eggs and cheese as if there were nothing wrong in doing so. Amstell's future Britain is a world in which even the word "veganism" has disappeared, since it simply signifies the cultural norm; "carnism" has instead come in to use to describe the ancestral diet, as well as the extremist ideology that justified it. As Amstell has it, our present-day world is one where it's normal to suck on the teats of a cow who has had her "babies" ripped away from her and either killed or locked up in pens in the dark. If you prefer to drink beetroot juice instead, you're the maniac!

We remain some way from Amstell's imagined future, but veganism is on the rise. According to a report from Waitrose, one in eight Britons is now vegetarian or vegan. A further 21% claim to be "flexitarian" ie, to follow a largely but not strictly vegetarian diet. That means around a third of Britons are reducing the amount of meat they eat, or are cutting it out altogether. The number of vegans in the UK has grown fourfold in the past four years, from 150,000 to 600,000, according to the Vegan Society. A survey for found similar figures but put the number of vegans as high as 7%. According to the Waitrose report, about 60% of vegans and 40% of vegetarians had adopted the diet over the past five years, with 55% citing animal welfare, 45% health, and 38% environmental issues as the reason for their choice.

The case for cutting out meat

But are the turnip-munchers right to be cutting out the meat and cheese? George Monbiot, the environmental campaigner, certainly thinks so. The environmental case for cutting out meat seems compelling enough on its own. "Whether human beings survive this century and the next, whether other life forms can live alongside us: more than anything, this depends on the way we eat," he wrote for The Guardian earlier this year. "We can cut our consumption of everything else almost to zero and still we will drive living systems to collapse unless we change our diet." According to Monbiot, "all the evidence now points in one direction: the crucial shift is from an animal- to a plant-based diet".

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For a start, there are the greenhouse gases released as a result of producing food. The evidence seems clear that switching to a plant-based diet would lower emissions. A UK study published in the journal Climatic Change in 2014 found that eating a diet high in meat cost 7.2kg of carbon dioxide emissions per day, compared with 3.8kg for vegetarians and 2.9kg for vegans. A 2018 paper by Joseph Poore of Oxford University found that going vegan would cut carbon emissions from food production in half. It would also free up land for other uses. Nearly 80% of the world's farmland is dedicated to rearing animals; a plant-based diet would cut the use of land for agriculture by 76%. The land currently used by grazing livestock could be used for "rewilding", says Monbiot, allowing the ecosystems destroyed by livestock farming to recover, absorbing carbon dioxide from the atmosphere, protecting watersheds and halting species destruction.

Some people retort that soya production is equally destructive of forest, savannah and marshland. But as Monbiot says, if you want to eat less soya, then you should eat soya: 93% of the soya we consume is fed to the animals we then eat. Taken together, the results seem clear-cut. As Chloe Cornish notes in the Financial Times, Poore's paper alone marshalled data from 570 studies covering 38,700 farms. It looked at 40 common foods and assessed how much land and water they use, what they contribute to greenhouse-gas emissions and to what extent they cause problems such as groundwater and freshwater becoming more acidic. It couldn't find any animal products that were more environmentally friendly than their plant-based alternatives. As a result of his findings, "Poore ate his last Pret a Manger cheese-and-tomato croissant and went vegan".

And it's not just the planet that would benefit. Our health and wealth would too. A study from the Oxford Martin Programme on the Future of Food, published in 2016, modelled what would happen to our health and the global economy if we all switched to either vegetarian or vegan diets. By 2050, 5.1 million deaths could be avoided if we kept our diets within current recommended dietary guidelines. If we went vegetarian, the figure would be 7.3 million lives saved. If we went vegan, it would be 8.1 million. The economic benefits of dietary change could be as much as $700bn-$1trn per year in terms of savings on healthcare costs and lost working days due to ill health.

The author of this research, Dr Marco Springmann, believes his figures are conservative and probably an underestimate. He is an advocate of a tax on animal products so that their prices reflect the cost of externalities. If the cost of climate damages associated with the greenhouse-gas emissions of foods were integrated into the price of food, beef would be 40% more expensive, he reckons, and milk and other meats would cost 20% more. The greenhouse-gas emissions from food production, coupled with population growth and the aspiration in developing countries to consume similar meat-heavy diets as in the UK or the US, could make it very hard to limit global warming to below the two degrees specified in the Paris climate agreement, he told Oxford Today. Things cannot stay as they are, he says. We need a paradigm shift so that "eating meatbecomes as frowned upon as smoking".

Some massively misleading claims

Indeed, eating meat is fast becoming as repellent as smoking to many campaigners, says Bjrn Lomborg on Project Syndicate. But the massive figures often quoted to convince us to go vegan are "massively misleading". Importantly, the often-quoted 50% reduction in carbon emissions is the reduction in an individual's personal emissions that are accounted for by food. But that only accounts for a fifth of our total personal emissions. Additionally, those savings are from a lifestyle that would not only eschew meat and dairy and eggs, but also honey, seafood, fur, leather, wool, gelatin and much else. "This is not going to be a mainstream dietary and lifestyle regime anytime soon." If we turn to a systematic survey of peer-reviewed studies in the literature, rather than cherry-picking the best-sounding numbers, we find that a non-meat diet will reduce an individual's emissions by 540kg of carbon dioxide. For the average person in the industrialised world, that means cutting emissions by just 4.3%. But even this still overstates the effect because it ignores an "age-old... economic phenomenon known as the rebound effect".

Vegetarian diets are slightly cheaper, and the saved money will likely be spent on other goods and services that cause additional greenhouse-gas emissions. In the US, vegetarians save about 7% and in the UK about 15% of their food budgets. A Swedish study showed a vegetarian diet is 10% cheaper, freeing up about 2% of an individual's total budget. That extra spending will cause more carbon-dioxide emissions and cancel out half the saved emissions from going vegetarian, the study concludes. Instead of going completely vegetarian for the rest of your life, you could reduce greenhouse-gas emissions by the exact same amount by spending $6 a year using the European emissions trading system while eating anything you want. There are many good reasons for eating less meat, says Lomborg, who is a vegetarian himself. But making a huge difference to the climate isn't one of them.

Going mainstream

Nevertheless, the climate is just one of many reasons people cite for going vegan, as Dan Hancox says in The Guardian. And if the forecasters and market analysts are anything to go by, veganism is "going mainstream". In 2016, a group called Fairr (Farm Animal Investment Risk and Return) co-ordinated a group of 40 large institutional investment funds worth £900bn publicly to urge major food producers and retailers such as Kraft Heinz, Nestl, Unilever, Tesco and Walmart to develop plant-based alternatives. Supermarkets shelves now groan with vegan products; hip vegan eateries are popping up all over London and beyond. "There's growing... support" from investors, says Rosie Wardle, who worked for Fairr. "Across the board now, market research firms, food analysts, industry commentators, they're all talking about alternative proteins and flexitarian diets."

Investors who want to take a punt on the trend might consider a forthcoming exchange-traded fund, the US Vegan Climate ETF (there is no ticker yet). It will track an index based on the Solactive US Large Cap index. This is a proxy for the S&P 500, but it excludes firms that engage in animal-unfriendly practices or that belch out greenhouse gases. For a hefty fee of 0.6%, you will avoid funding the slaughter of 13 animals a year for every $1,000 invested, according to the company behind the launch, Beyond Advisors. The top-ten holdings of the underlying index include such names as Apple, Microsoft, Alphabet, Facebook and JP Morgan so hardly pure plays on dietary changes. Another option is LA-based meatless burger maker Beyond Meat, which has filed for a $100m initial public offering. It will trade on the Nasdaq with the ticker BYND. Its products aim to replicate the taste and look of meat. If plant-based proteins can replicate the success plant-based milks have had in the dairy market, then Beyond Meat is looking at a possible $140bn market, according to the FT's Lex column. Get in at the start, and you could soon be toasting your good fortune with a celebratory glass of beetroot juice.

Stuart Watkins

Stuart graduated from the University of Leeds with an honours degree in biochemistry and molecular biology, and from Bath Spa University College with a postgraduate diploma in creative writing. 

He started his career in journalism working on newspapers and magazines for the medical profession before joining MoneyWeek shortly after its first issue appeared in November 2000. He has worked for the magazine ever since, and is now the comment editor. 

He has long had an interest in political economy and philosophy and writes occasional think pieces on this theme for the magazine, as well as a weekly round up of the best blogs in finance. 

His work has appeared in The Lancet and The Idler and in numerous other small-press and online publications.