The Next Economy
In Current Regulatory Climate, Alt Proteins Can’t Cut It in Race to Reduce Impact of Food

If you’re in the market to solve the climate crisis, you will get a far better return on your investment by putting your money into plant-based alternatives to meat than anything else. A recent Boston Consulting Group study into the subject found that each dollar injected into improving and scaling up alternative proteins resulted in three times more greenhouse gas (GHG) emissions reduction than putting it into climate-friendly cement tech, for instance. The return is an estimated seven times that of a sustainable building investment, and 11 times better than zero-emission vehicles.

The world is listening. Investments in meat alternatives, including lab-grown products and fermented options, grew by around $4 billion between 2019 and 2021. And the prediction is that alternatives will make up around 11 percent of all meat, egg and dairy products sold by 2035 – up from just 2 percent today.

But it won’t be easy. In fact, according to new research by Stanford University, it will be incredibly tough.

That’s because the hugely powerful and influential meat and dairy industries in the US and EU are seriously restricting the development of more sustainable alternatives. An analysis of subsidies received, lobbying activity and incoming regulation between 2014 and 2020 found that livestock farmers across the EU received 1,200 times more public funding than alternative protein producers — including plant-based and cultivated. In the US, animal farmers got 800 times more public money.

Meanwhile, the money spent by the meat industry on lobbying the US government was 190 times more than the meat-free sector spent; and it was three times higher in Europe.

“The lack of policies focused on reducing our reliance on animal-derived products and the lack of sufficient support to alternative technologies to make them competitive are symptomatic of a system still resisting fundamental changes,” said the study’s lead author, Simona Vallone from the Stanford Doerr School of Sustainability. The researchers were keen to point out the fact that almost all dietary guidelines fail to highlight the true GHG impact of producing meat, for example.

Co-author Eric Lambin points to the “powerful vested interests that have exerted political influence to maintain the animal-farming system status quo:” “Although in recent years both governments have invested in niche innovations and have started to modify regulations, they mostly preserved the status quo of animal-based production and consumption. Despite the urgency to increase food system sustainability, policies failed to address the environmental impacts of animal-based technologies,” he adds.

A shift in dietary habits resulting in a reduction in the amount of red meat eaten, particularly in affluent countries, could mitigate the huge GHG impact of livestock production. Another group of Stanford professors recently claimed that phasing out animal agriculture over the next 15 years would have the same effect as a 68 percent reduction in GHGs through the year 2100.

And yet, lobbying activity and significant subsidies are not giving alternatives the chance to compete.

In Europe, direct subsidy payments accounted for at least half of the income of cattle producers during the study period — money which “incentivized farmers to maintain herd size, keep pasture in production, or increase overall output.”

The study points to plenty of regulatory interventions that have stifled the market, helping to confuse consumers and maintain the animal-ag-centered status quo in the food system. For example, in 2017, following a European Court of Justice ruling, dairy terms such as ‘milk’ and ‘cheese’ could no longer be used to market most alternative milk and dairy products. Similarly, a proposed amendment to the US Federal Food, Drug, and Cosmetic Act would prohibit the sale of alternative meats unless the product label included the word ‘imitation’ or other words to indicate a non-animal origin.

It is clear that “a significant policy shift is required to reduce the food system impact on climate, land use, and biodiversity,” as Lambin says; and there are glimmers of hope: In the US, the recent decision to greenlight the sale of lab-grown chicken gave a big boost to cultivated-meat producers across the country; and the recently passed Inflation Reduction Act includes measures to financially incentivise farmers to implement GHG-reduction practices. In the EU, talk continues about accelerating the transition to a sustainable food system.

And global leaders find themselves under increasing pressure to dismantle industrialised food production and reform agricultural subsidies. The FAIRR coalition of investors, representing $7.3 trillion in combined assets, has called on G20 finance ministers to align their support of agricultural players with national climate commitments to the Paris Agreement and the recently ratified UN biodiversity treaty. In a damning statement, FAIRR founder Jeremy Coller pointed out that as governments around the world are setting bold climate and nature goals; in the same breath, they are “undermining those ambitions with almost $500 billion in harmful agricultural subsidies for high-emitting commodities such as red meat. We need to realign subsidies to nature goals … and to ensure a level regulatory playing field for alternative proteins and other sustainable solutions.”

As the Stanford researchers conclude, ensuring a fair marketplace for alternative meat products demands policymakers craft legislation that “ensures meat’s price reflects its true environmental costs, increases research on alternative meat and dairy products, and informs consumers on alternatives to meat via dietary guidelines.”