Not a surprise

Researchers at Exeter University compared the carbon dioxide emissions of organic vegetables from local farm shops with mass produced organic vegetables delivered to customers\’ doors as part of a large scale vegetable box scheme.

They found that if consumers had to make a round trip by car of more than four miles to visit their local farm shop, the carbon emissions produced were greater than the mass produced vegetables that had been kept in cold storage and transported by heavy goods vehicle.

The researchers compared all carbon emissions from the fuel and energy used in each supply chain. As both methods used organic farming the farming practices were deemed to be the same.

Now, of course, what we want is a method of working all these sorts of calculations out. Does the organic farming method increase or reduce resource use? Foreign or local production? How many miles equals what method of production or storage? Well, usually we just use market priceing….but here were know that the are externalities from emissions. So, tax the emissions, making them internal to market prices (yes, Pigou Taxes again!) and our job is done. Market prices will now reflect resource use in production.

It\’s really a pretty neat idea, isn\’t it?

6 comments on “Not a surprise

  1. But Pigou taxes can mask or smother the market price signal and the knowledge it passes to the consumer. Remember there are only trade-offs not solutions. 😉

    So do we really “know” the cost of the externalities? Guess wrong and it could be very costly.

  2. ” Does the organic farming method increase or reduce resource use?”

    Organic requires more water and land to produce the same yield as conventional. And if you want to talk about a really stressed resource, try water.

  3. Did they account for the fact that most people pop into the farm shop on their way home from Tescos or work rather than make a special journey?

  4. “Break bulk, add value.” often true, but not always – depends to some degree on whether the cost is mostly rent or factor. If the cost is mostly rent, then you may get a higher unit cost if you sell in bulk – eg a large insurance broker might earn higher commission rate than a small insurance broker. On the other hand, Hitachi are normally going to have to accept a lower unit price for a warehouse of tvs than for a single tv.

    In summary, if something is scarce then the unit price may well rise for large supplies, if it abundant then more can always be sourced an so scale starts to apply.

  5. @Pamela — fertilisers are resources too. 😛

    In absolute terms, there *is* more wastage in organic farming, but if the cost of that wastage is less than the cost of using (gasp) “unnatural” fertilisers, then it’s economically sound, no?

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