Finding the economics of change in the sustainability and climate change debate

Finding the economics of change in the sustainability and climate change debate

It seems every time I broach the subject of climate change, I get accused of being anti-science and simply wishing my views into reality. It is sad how public discourse has devolved into political correctness that seeks to shame and belittle anyone who holds a differing opinion. 

At least that seems to be the situation with those who believe that you and I and everyone else are to blame for climate change. They ask for the science, we provide it, but they don’t want to hear it or read it because it doesn’t fit their view. The great irony is that they miss the point – most everyone agrees with climate change and we all believe deeply in the idea of sustainability. 

However, we aren’t all in agreement with the models that describe climate change – they have all failed, so this isn’t even a debate—or the cause, whether it’s natural variability vs. man-made actions; and most importantly what to do about fixing it. Ranchers are action oriented and respond to situations by saying, “Let’s solve the problem.” We are not good at participating in the multi-billion-dollar scare industry and the battle for political power that the debate over climate change has spawned.  

The fronts producers want to address are the scientific realities and consumer desires and demands. We understand that this is about billions of dollars and political power, but we really have no desire to compete for those; we just want to mitigate the damage. 

To move beyond what we are currently doing to produce more from less, steward our resources and improve efficiency, safety and quality of our products while taking care of the land, water, animals, air, and people involved, we have to change the rules of the game. We are making great incremental improvement in all these areas, but if consumers truly desire for us to do more, then the key will be finding a way to monetize that change or create the economics that bring about substantive change. 

That process results in premiums for certain actions and discounts for failure to adopt certain practices. It is like the chicken and the egg argument—are good genetics being rewarded or poor genetics discounted; are preconditioned calves given a premium or are bawling calves discounted? The truth is that it probably ends up somewhere in the middle with both happening to some extent. 

At first, producers must be incentivized to change. We react to that incentive until it reaches critical mass, then are rewarded to the point that only covers the cost of doing whatever the market is asking for, and those who have not adopted are discounted.

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Eventually, the cost structure and expectations are institutionalized in the marketplace and the only way to detect the incentives that are now part of the system is to stop those practices. For example, there is no premium anymore for dehorned or castrated steer calves, but bring the others to town and the market will punish your failure. 

Consumers vote with their dollars every time they buy a product, and those votes will ultimately define and dictate what sustainability and climate change mean to our industry. Ultimately, I believe what we do as an industry to deal with the issues of sustainability and climate change and how much change we will implement will come down to the simple interaction of what consumers say they want and what they are willing to pay for. 

As producers, the biggest concern is that the consumer sends these signals through the marketplace and not some government agency that arbitrarily acts and reduces our viability and sustainability in the process. 

The opinions of Troy Marshall are not necessarily those of beefmagazine.com and the Penton Agriculture Group.

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