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The Case for Public Investment in Alternative Proteins

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The Case for Public Investment in Alternative Proteins THE CASE FOR PUBLIC INVESTMENT IN ALTERNATIVE PROTEINS BY ALEX SMITH, SALONI SHAH AND DAN BLAUSTEIN-REJTO EXECUTIVE SUMMARY This report makes a comprehensive case for robust public investment in research and develop- ment for alternative proteins. It also provides a framework for how to spend these funds and maximize their benefit for reducing the environmental and health costs of meat consumption. Currently, the United States consumes more meat per capita than any other country in the world. The American diet’s emphasis on meat contributes to greenhouse gas (GHG) emissions, health problems, animal suffering, local pollution, and poor labor conditions. In the past decade, however, the U.S. has seen a burgeoning alternative meat industry, includ- ing cultivated products from companies like Beyond Meat and Impossible Foods, Mosa Meat, Memphis Meats, Blue Nalu, and Eat Just. Despite the industry’s growth, these products — still more expensive than conventional meat and lacking diversity — have yet to meaningfully reduce U.S. meat consumption. Alternative Meats Mitigate Externalities Related to Animal Agriculture With sufficient research and development (R&D) for new and improved products and produc- tion, the benefits for the environment, public health, and animal welfare could be enormous. The externalities from animal agriculture, such as GHG emissions and health impacts, cost the American public at least $388 billion per year. Replacing 45% of beef with plant-based alter- natives could, for example, reduce U.S. GHG emissions from agriculture by around one sixth. Substantial replacement would also reduce deaths associated with air pollution; overuse of antibiotics by livestock producers; and rates of colorectal cancer, heart disease and other diet- related issues. To realize these benefits, the U.S. government should make sizable investments in alternative meat R&D. Public Investment in Alternative Meats Will Drive Economic Growth With the help of the federal government, the U.S. alternative meat industry can be a driving force for domestic economic growth by becoming an international leader in the fast-growing market for alternative meats. According to Farm Animal Investment Risk and Return (FAIRR), projections of future market share put alternative proteins — including milk and egg alternatives — between 16 and 62 percent of the global protein market by 2050. 2 A $50 million federal investment would create more than 2,000 jobs and add nearly $1.5 billion to the U.S. economy over 10 years. If the alternative meat market grows ten-fold by 2030, as some posit it can, the industry could create nearly 200,000 jobs in the U.S. The Federal Government is Uniquely Suited to Fund the Necessary Research High-risk, pre-competitive, and multidisciplinary R&D is key to the alternative meat sector overcoming its barriers to growth and widespread adoption. Such research often necessitates public support. For long-term growth, the cell- and plant-based meat industries must answer basic scientific questions about cell biology, genomic sequencing of potential inputs, and techniques to improve production processes. Due to the multidisciplinary nature of the needed scientific research, alternative meat produc- ers and researchers are hard-pressed to find capable collaborators and partners. This is an issue the U.S. government has a proven track record of solving — a notable success story being the Advanced Manufacturing Institutes created by the Obama administration. How The Federal Government Should Invest To ensure that plant-based and cultivated meat can be a real alternative to conventional animal agriculture, we recommend that the federal government: • Fund and develop collaborative and multidisciplinary public-private partnerships aimed at alternative meat R&D. • Expand existing R&D funding for alternative meat at agencies such as the Agricultural Research Service, the National Institute of Food and Agriculture, and the National Science Foundation. • Apply a mission-oriented approach that targets innovations that could lead to price reductions, cell-line identification, and the development of whole-cut meat alternatives. Altogether, limiting the social, monetary, and ethical costs of animal agriculture and ensuring American competitiveness in the growing global market for alternative meats requires large- scale, organized public investment in plant-based and cultivated meats. 3 CONTENTS Executive Summary 2 Introduction 6 SECTION I: THE NEED FOR RESEARCH AND DEVELOPMENT IN ALTERNATIVE MEAT FOR INDUSTRY GROWTH 9 State of the Industry 9 The Potential for Further Growth 11 The Barriers to Growth and the Need for R&D 12 Consumer Acceptance 12 Product Quality 13 Cost 14 Production Capacity 14 Scientific Barriers 15 SECTION II: WHY ALTERNATIVE MEAT R&D SHOULD BE PUBLICLY FUNDED 17 Alternative Meats Can Mitigate Externalities Related to Animal Agriculture 17 Greenhouse Gas Emissions 19 Land Use and Conservation 21 Water Use 23 Air and Water Pollution 23 Nutrition and Public Health 24 Animal Welfare 25 Externalities in Totality — Estimating the Costs of Animal Agriculture 26 4 Public Investment in Alternative Meat Can Drive Economic Growth 27 The Federal Government Is Uniquely Suited to Fund the Necessary Research 29 Governments Fund High Risk and Pre-Competitive R&D 29 Government Funding Solves Network Failures 30 SECTION III: HOW FEDERAL INVESTMENT SHOULD BE SPENT TO MAXIMIZE IMPACT 32 Fund Networks 33 Expand Existing R&D Programs to Include Alternative Meat 33 Apply a Mission-Oriented Approach to Innovate Towards Price Reductions and Cell Line Development 34 Appendix 1: Opportunities for Public Investment in Specific Research Questions 36 5 INTRODUCTION Currently, the United States consumes more meat, per capita than any other country in the world.1 The American emphasis on meat is linked with greater GHG emissions, health impacts, disregard for animal welfare, local pollution, and poor labor conditions. Alternative meats, namely plant-based and cultivated meats, present a rare opportunity for large-scale consumption shifts. Alternative meats are of two types. Plant-based meats, defined for this report as meat alternatives that attempt to mimic meat without utilizing animal prod- ucts, have already found success across the United States. On the other hand, cultivated meat — alternatives to conventional meat that are composed of actual animal cells grown completely in a cell-culturing facility — is a relatively new and emerging technology. With animal agriculture responsible for GHG emissions, local pollution, widespread COVID-19 outbreaks at facilities, and the unethical treatment of billions of animals, alternative meats rep- resent a real pathway towards a greener, cleaner, and friendlier food system. Yet, barriers remain for technological growth, product taste and texture, cost parity, and production processes. Federal investment in alternative meats could help firms overcome these barriers, mitigating the externalities related to animal agriculture while also growing a nascent industry and bene- fiting the U.S. economy. Currently, the federal government provides almost no funding for alternative meats R&D.2 Although the U.S. federal government has provided funding in the past — and recently, the NSF even provided a $3.5 million grant to researchers at UC Davis to study cultivated meat produc- tion — alternative meat has been a mainly private venture.3 In this report, we make a comprehensive case for robust public investment in R&D for alternative meats. We also provide a framework for how to spend these funds and maximize their benefit for reducing the environmental and health costs of meat consumption. In Section I, we outline the state of the plant-based and cultivated alternative meat industries and why their continued growth requires further R&D. In the short term, we suggest that target- ing fast food and institutional dining markets can drive adoption of meat alternatives by taking advantage of existing and efficient supply chains. But increasing consumption of alternatives — and subsequently reducing demand for animal-based meats — means that the industry must 6 overcome barriers related to consumer acceptance, product taste and diversity, cost, production capacity, and basic science. All of this requires significant research and development. In Section II, we explain why the federal government should fund alternative meat R&D. First and foremost, alternative meats provide a unique opportunity to mitigate the environmental, social, and ethical costs of animal agriculture. Public investment could create a domestic alternative meat industry capable of growing the U.S. economy by meeting rising demand from international markets. The federal government is also best suited to fund the needed research. Private investment is unlikely to be as effective because the plant-based and cultivated meat industries are young industries, requiring high-risk research. Further, the research is multidis- ciplinary and collaborative, which can lead to the kind of “network failures”4 the federal govern- ment has successfully mitigated over several decades of research in technological innovation. Finally, in Section III, we outline recommendations for federal investment to maximize its impact. We argue the federal government should take three steps. First, invest in research and commercial networks capable of improving the possibilities of collaboration and cooperation between firms and researchers working on alternative meats. Second, appropriately
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