The environmental impact of reducing food loss and waste: A critical assessment

This paper examines the rationale for pursuing environmental objectives by reducing food loss and waste (FLW). The main thrust of the literature on this issue is that FLW reduction can make a major contribution to making food systems more sustainable. Using a stylized analytical framework, we find that reducing FLW always improves resource use efficiency for land and water, and reduces the amount of greenhouse gases (GHG) emitted per unit of food consumed. However, whether the actual environmental outcome is improved will depend on where environmental damage and FLW reduction occur, and the way price transmission connects these along the food supply chain. We find that, while a food waste reduction at the consumer level always improves the environmental outcome, this is not guaranteed when reducing losses from farm to retail. We thus derive a condition linking the price transmission mechanism and the environmental impact of a loss reduction. Simulating environmental outcomes based on a range of parameter values found in the literature, we find that reducing losses at or close to the farm level can increase the aggregate amount of GHG emissions, and therefore focusing on reducing consumer waste is more effective in reducing emissions. As for reducing natural resource use, both loss and waste reductions reduce the amount of land and water use, but effectiveness is reduced by heterogeneity in environmental impact. Relative to loss reductions, effectiveness of a waste reduction is amplified if there are environmentally damaging losses upstream in the value chain, but also dampened by vertical heterogeneity of sourcing along a value chain. The paper makes the case that more targeted instruments may be better suited to address typically local water scarcity and land use and degradation issues.