The True Cost of What We Eat
Nora Gau
Alexandra Brausmann, environmental economist at the University of Vienna, examines the EAT-Lancet Report through an economic lens, focusing on what it means for policy, prices, and incentives. She discusses how shifts in diets could reshape markets and inequalities - and why reflecting the true environmental and health costs of food in prices and policy decisions is essential for creating sustainable and politically viable food systems.
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ECH Editorial Team: From your perspective as an economist working at the intersection of climate and environmental research, why is the EAT-Lancet Report such a landmark contribution to global debates on food systems, sustainability and public health?
Alexandra Brausmann: The EAT-Lancet Report is a landmark because it integrates nutrition science with planetary boundaries, showing that healthy diets and environmental sustainability are jointly achievable. The report was the first to put numbers on a global reference diet that stays within environmental limits for climate, land, water, and biodiversity. In doing so, it shows that what we eat lies at the heart of both public health and climate policy.
ECH Editorial Team: The report calls for substantial changes in dietary patterns, including a strong shift towards plant-based diets. From an economic point of view, what opportunities and challenges does this transformation create for producers, markets and consumers?
Alexandra Brausmann: Dietary shifts create opportunities in plant-based agriculture, food innovation, and new value chains, while presenting challenges to established livestock sectors. Markets and individuals may benefit from lower healthcare costs and reduced climate damage, but the transition also brings risks. For example, farmers and companies may be left with so-called 'stranded assets', such as infrastructure and machinery that can no longer be used. Adjusting production can be costly as well. There are also concerns about affordability and access to high-quality food, particularly in developing countries, if these challenges are not addressed by policies.
ECH Editorial Team: The report highlights a paradox: food systems place enormous pressure on the environment while failing to ensure healthy diets for many people. Which economic structures contribute to this imbalance, and where do you see the greatest potential for change?
Alexandra Brausmann: This contradiction stems from a combination of economic and structural factors. For example, many foods appear cheaper than they actually are because the true environmental and health costs – such as climate impact, pollution or diet-related diseases – are not factored into their prices. At the same time, power imbalances in global food chains mean that large companies and certain countries have the most influence, while small farmers and poorer regions have little control over production, trade or prices. Government subsidies often favour calorie-dense, resource-intensive foods, making them artificially affordable and at the same time poverty limits many people's access to healthy alternatives. Part of the problem is also consumers’ lack of awareness about substantial health risks associated with consuming highly processed, sugar-packed foods.
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ECH Editorial Team: Transforming food systems requires significant investment. How should policymakers assess the short-term economic costs against the long-term benefits for health, climate and economic stability?
Alexandra Brausmann: It is always tricky to tell policymakers what they should do. There are certainly well-established tools to assess costs using a social cost–benefit framework that includes avoided health expenditures, reduced climate damages and increased productivity gains at a given time horizon. While transition costs are immediate or short-term, long-term benefits are large and persistent. Evidence shows prevention-oriented food policies yield high returns when health and climate co-benefits are internalized.
ECH Editorial Team: What role do economic policy instruments - such as subsidies, taxes or pricing mechanisms - play in implementing the recommendations of the EAT-Lancet Report? Which levers do you consider particularly effective?
Alexandra Brausmann: Economic instruments are essential to align private choices with social goals. Reforming agricultural subsidies, pricing carbon and nitrogen, taxing (or even banning) ultra-processed foods, and subsidizing fruits and vegetables can shift demand and production. Policies are most effective when combined, clearly communicated, predictable, and paired with social protection for vulnerable groups.
ECH Editorial Team: Given the very different economic conditions across regions, how can the transition towards healthier and more sustainable diets be shaped in a way that is both economically feasible and socially just, especially for lower-income countries?
Alexandra Brausmann: Equitable transition requires differentiated pathways. In low-income countries, priorities include reducing undernutrition, improving productivity, education, and health care, and expanding access to diverse foods. High-income countries could lead in reducing emissions and reforming food production, shifting away from health-compromising high-sugar and highly-processed products, and most importantly changing consumer preferences towards healthy foods through a combination of information campaigns and incentive-based policies. International finance, technology transfers and trade reforms are critical for fairness.
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ECH Editorial Team: The EAT-Lancet Report brings together expertise from nutrition, environmental science, climate research and economics. Why is this interdisciplinary approach particularly important when addressing complex challenges such as global food systems?
Alexandra Brausmann: Food systems link health, ecosystems, climate and economic behaviour, and no single discipline can fully capture the complex interactions between these factors. Interdisciplinary research allows trade-offs and synergies to be identified and prevents siloed policy responses, supporting coherent strategies. The EAT-Lancet approach enhances credibility by anchoring normative objectives in various evidence bases.
About the researcher
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Alexandra Brausmann is Associate Professor of Environmental and Resource Economics at the University of Vienna. She holds a Master’s in International Economics from the Graduate Institute in Geneva and a PhD in Economics from ETH Zurich. Her research examines the economic impacts of climate change, climate policy, agriculture, and sustainability, including resource use, environmental migration, and long-term growth. Using quantitative methods and economic modelling, she analyses how environmental risks and policy choices shape markets and inequalities, and how economic instruments can support more sustainable systems.
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