The real cost of eliminating poverty

What would it cost to eliminate poverty and ensure that each person on the planet enjoyed a ‘living wage’; enough income to meet their basic needs for a descent and good life?

First, the world’s leaders, along with the world’s billionaires, would have to issue a joint declaration of well-being, that all people on the planet are deserving of a sufficient ‘living wage’ that would meet their basic needs for a good life.

What is a living wage? A living wage is the income required to meet the basic needs for a reasonable good life of clean water, good air, good food, comfortable shelter, clothing and some healthy degree of autonomy.

The Catholic 13th century theologian Thomas Aquinas (building on the ideas of Aristotle) said what is required of a good life is sufficiency of material needs (and hence sufficiency of income to finance those needs) and virtuous action).

Based on Plato and Aquinas, the key virtues to act upon are moderation, courage, justice and wisdom.

Reality Check: The Facts

The current estimated global poverty line is $1.45 per day or $530/yr.

$2.50/day ($912/yr) is the estimated poverty level in developing countries. In 2005, acccording to poverty facts currently roughly 50% of the world’s people (over 3.2 billion) live on $2.50/day while 80% (5.15 billion) live on $10/day or less.The $10 dollar a day (US $3,650/yr) figure above is close to poverty levels in the US.

The poorest 40 percent of the world’s population accounts for 5 percent of global income. The richest 20 percent accounts for three-quarters of world income.

In 2005, the wealthiest 20% of the world accounted for 76.6% of total private consumption. The poorest fifth just 1.5%.

The poorest 10% accounted for just 0.5% of all consumption while the wealthiest 10% accounted for 59% of all the consumption.

About 0.13% of the world’s population controlled 25% of the world’s financial assets in 2004. The total wealth of the top 8.3 million people around the world “rose 8.2 percent to $30.8 trillion in 2004, giving them control of nearly a quarter of the world’s financial assets.”

A conservative estimate for 2010 is that at least a third of all private financial wealth, and nearly half of all offshore wealth, is now owned by world’s richest 91,000 people – just 0.001% of the world’s population.

The next 51 percent of all wealth is owned by the next 8.4 million — just 0.14% of the world’s population. Almost all of this financial wealth has managed to avoid all income and estate taxes, either by the countries where it has been invested and or where it comes from.

The world’s gross domestic product in 2006 was $48.2 trillion in 2006.

  • The world’s wealthiest countries (approximately 1 billion people) accounted for $36.6 trillion dollars (76%).
  • The world’s billionaires — just 497 people (approximately 0.000008% of the world’s population) — were worth $3.5 trillion (over 7% of world GDP).
  • Low income countries (2.4 billion people) accounted for just $1.6 trillion of GDP (3.3%)
  • Middle income countries (3 billion people) made up the rest of GDP at just over $10 trillion (20.7%).

How much would this cost to eliminate poverty around the world (with 7.074 billion people and assuming the same distribution of poverty)?

To double the raise the income of roughly 5.64 billion (80% of the world’s population who live on less than $10/day) to $10.00/day would cost $29.39 billion/yr. (I have not included people in the developed countries who may not be earning $10/day).

The $29.39 billion is equivalent of 0.5% of the total estimated wealth of the 1,426 billions (according to Forbes latest wealth estimates).

Imagine a campaign to Bill Gates and the rest of the super wealthy to give 0.5% per annum of their estimated wealth as a ‘wellbeing’ dividend to the 5.6 billion living without a living wage.

If we bumped this up to my estimate of a ‘good life’  living wage of roughly US $4.00/work hours or roughly $20/day (averaged over 365 days), then the annual price tag would jump to $85.7 billion per year or 1.6% of the total wealth of the world’s wealthiest billionaires.

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First Study to Measure the Wellbeing Impacts of the BC Construction Associations Employment Program

BC’S STEP PROGRAM PAYS BACK GOVERNMENT FUNDING WITHIN 10 MONTHS, DELIVERS $8+ MILLION IN INCREMENTAL REVENUE 

VICTORIA, BC, October 2, 2013 – A report published today by Mark Anielski of Anielski Management demonstrates that the British Columbia Construction Association’s (BCCA) Skilled Trades Employment Program (STEP) delivers both a positive quality-of-life impact for skilled workers and a timely return on taxpayer dollars.

Mark Anielski, author of The Economics of Happiness: Building Genuine Wealth, is an international expert in the new field of the economics of well-being and happiness. Anielski conducted an independent assessment of the economic well-being impacts of BCCA programs currently operating in the province in order to help construction employers to source job-ready workers. The programs are demand-driven, providing customized assistance to BC employers, while supporting candidates who demonstrate a fit for the trades.

On the $7.55 million invested in STEP, Anielski calculated an economic return of $8.17 million in annual income tax benefits to government, and a reduction of Income Assistance payments of $1.11 million, for a total societal benefit of $9.28 million.

By Anielski’s calculations, that return on investment occurred over less than 10 months.

This is potentially good news for the construction sector, which is looking to find increased support for skilled trades training in the face of major skills shortages looming in BC.

While such calculations give us some assurance of the ‘economic value’ and return on dollars invested, personal testimonials of how the BCCA programs have impacted individuals, their families and their employer are powerful. Here are a few personal stories of how the BCCA Connector programs have had a positive impact on work and quality of life.

Meet Aaron: Apprentice Sheet Metal Worker

Meet Krysta: Electrical Apprentice and Mom

Other stories of BCCA well-being impacts

On October 2, Premier Christy Clark (British Columbia) and Premier David Alward (New Brunswick) hosted a national skills training roundtable to hear opinions on the newly proposed Canada Jobs Grant, which could put an end to successful provincial programs like STEP in favour of a new set of federal funding criteria.

BC’s construction employers hope that won’t happen. “The BCCA programs have been totally positive for us. STEP has been a huge benefit to our company” says Dean Baumeister, of Dalco Parts & Service in Fort St. John.

“By March 2014, STEP’s programs will have placed roughly 7,000 British Columbians into skilled trades jobs. Our team makes 6,000 points of contact each year with BC construction employers. With more than 50 staff in the field we are operating the most connected, effective HR program in the industry,” says Manley McLachlan, BCCA President. “We broke the mold to do it and we know it works, but this report reinforces our success story.”

The BuildForce Canada report Construction Looking Forward (Spring 2013) predicts a shortfall of 30,500 skilled workers in BC by 2021. This number does not include potential LNG sector development, which the BC government predicts will deliver $1 trillion in GDP benefits and 100,000 new jobs over the next 33 years.

The British Columbia Construction Association (BCCA) is an employer-based construction association. Together, the BCCA and its four regional associations (http://www.sica.bc.ca/, http://www.vrca.bc.ca/, http://www.vicabc.ca/, http://www.bccanorth.ca/) represent more than 2000 businesses active in the industrial, commercial, institutional and multi-family residential construction industry. Membership services include educational programs, employee benefits programs, technology tools for bid and project management (BidCentral), employment and recruitment programs (STEP, Job Match and FSWBC), and advocacy to ensure British Columbia’s construction sector remains strong. www.bccassn.com

Download Full Report Anielski Report_BCCA STEP Programs_October 2013

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A Tribute to Dominic Mishio and the City of Leduc, Alberta: How to Win an Election based on Genuine Wealth

A Tribute to Dominic Mishio and the City of Leduc:
How to win an Election based on a Genuine Wealth Approach to Governance

“ The genuine wealth assessment for the City of Leduc is the document that guides our strategic plan. Our priorities are examined by their impact on our capital accounts…The genuine-wealth assessment has broadened the view of council to look at the impact of our decisions in many different ways in the community. Decisions are no longer viewed based just on their financial impact.

— Dominic Mishio
Alderman and Deputy Mayor (2007-2013)
City of Leduc

Six Years of Genuine Wealth in Leduc (PDF copy of this paper)

Albertans are about to elect a new municipal council of mayor and counsellors on Monday October 21, 2013.

Over the last 7 years I have had the pleasure of being a mentor to my colleague and friend, Dominic Mishio, City of Leduc alderman and deputy mayor (2007-2013).

Dominic first met me at one of the famous Leduc-Nisku Economic Development Authority breakfast meetings in 2006, where he first learned about the Leduc Genuine Wealth (well-being) assessment I was leading for the City of Leduc. At that time Leduc had a population of 16,000 people; today Leduc has over 26,000 people.

Dominic was only 21 at the time I met him. He was so inspired by the Genuine Wealth project that he decided to run for Leduc City Council. He was elected in 2007 as the youngest elected official in Alberta at the age of 22, coming in third place overall amongst the aldermanic candidates. Dominic was also inspired by my quotation of Robert Kennedy who in 1968 critiqued the Gross National Product (now the GDP) as a measure of progress that failed to ‘measure that which makes life worthwhile’ while measuring all the money flows in the economy. Turns out Kennedy is Dominic’s political hero.

What was unique about Dominic’s political campaign is that he adopted a Genuine Wealth approach to his campaign. Using the results of the Genuine Wealth assessment I completed for the City of Leduc and Leduc County in 2006, Dominic went door to door asking people ‘what matters most to you and your quality of life?’ How can we improve the overall well-being of your life and our community? What are your dreams and aspirations for a better life?

Dominic was using his campaign season to ‘listen’ to the needs and dreams of all households in Leduc. I call the election period the ‘listening season;’ the time we check in with our neighbours about their quality of life, their needs and aspirations for a better life.

Dominic had adopted the very spirit of the genuine wealth model I have developing over the years. My main motivation for building this new model for governance was to have a practical way of measuring what matters most to citizen’s quality of life, to guide planning and budget decisions with a ‘well-being’  impact bottom-line perspective, and to help build a new economic development model based on well-being and happiness (not simply more growth).

Since 2007 Dominic has served two successive terms with the City of Leduc and has been a tireless champion of genuine wealth thinking and logic. Dominic looked at all planning and budgeting decisions by asking ‘what will the well-being impact be of this decision to our economy, community and the environment?’  By keeping this question in play meant that his colleagues on counsel and administration were required to address the well-being impact question with quantitative data along with good-old ‘gut feelings’ about whether any decision would have a qualitative impact on well-being.

At the young age of 28, Dominic is retiring from politics (for now) moving on to take on his new challenge as director of the Global Poverty Project, funded by the Bill and Melinda Gates Foundation

Don Iveson (middle) and Dominic Mishio (right)

Challenging all Municipal Leaders in Alberta to Adopt a Genuine Wealth Approach to Governance

A new generation of municipal leaders in Alberta is emerging. Young leaders like Don Iveson (Edmonton), Naheed Nenshi (Calgary) and Dominic Mishio are providing a refreshing new approach to politics and civic governance. Is this the time for a new economic development model based on genuine wealth and well-being?

Over 3 years ago, just after the last municipal election, I was introduced to an urban sustainability forum by newly-elected Calgary Mayor Naheed Nenshi. In his introduction to me, he noted that ‘one of the books I was told to read before becoming mayor was Mark’s book, The Economics of Happiness: Building Genuine Wealth.’ I was stunned and pleased that he considered my book, amongst others such as Malcolm Gladwell’s The Tipping Point, to have informed his decision to run for elected office.

Time for an Economy of Well-being for Alberta’s Towns and Cities.

It’s time for a new economic vision for our province and our communities. I believe this new vision should be founded on well-being. I believe that Genuine Wealth, as a model and concept of governance can be the practical tool by which all municipalities in Alberta can ensure that the conditions of well-being for all citizens can be ensured.

The Cities of Leduc, Edmonton and Olds are three examples of how new well-being measures of progress are being adopted to guide decision making and budgets.

I believe it is possible to redesign our planning and budgeting processes that ensures the highest and best use of our shared community assets. Empowering each of us to make the best.

Imagine if every community were able to celebrate the strengths of its unique assets with a Well-Being Index and genuine wealth ‘balance sheet,’ such as Leduc did in 2006.

Continue reading “A Tribute to Dominic Mishio and the City of Leduc, Alberta: How to Win an Election based on Genuine Wealth” »

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Building the New Alberta Economy of WellBeing, by Design

The New Economy of Wellbeing, By Design, for Alberta

August 31, 2013

What if Alberta’s economic development strategies were oriented towards enabling the highest possible conditions of wellbeing that yielded genuine happiness and joy?

Are there design features for our cities, communities, neighbourhoods, businesses and our personal lives that would result in the highest possible ‘returns’ to wellbeing (versus GDP or profits) on investment in the human, social, natural, built and financial capital assets?

Is there a way of measuring wellbeing impacts and social value from projects and programs of businesses, enterprises, and governments (local, provincial and federal)?

With my colleagues Robert McGarvey, Bill Craig and Dominic Mishio at the Genuine Wealth Institute (and www.genuinewealthinc.com) we believe it is possible to design, build and operate businesses, neighbourhoods, and communities that generate what we all want: a high quality of life, wellbeing and enduring happiness.

We believe wellbeing will become the new ‘bottom line’ and the ultimate ‘purpose’ of business, governments, neighbourhoods and communities.

Based on our research and studies of the science of wellbeing, we know that ‘the good life’ is defined by sufficiency of wealth (material and financial), good health (mental, emotional, and physical), strong and enduring relationships, and ultimately happiness (including spiritual wellbeing).

Genuine Wealth is both a concept for living and a practical model for operating our lives, businesses, neighbourhoods, and communities.

As a concept Genuine Wealth is a lifestyle by which we live an authentic existence where our actions are aligned with our values. We understand that true wealth is defined in terms of the conditions of life that contribute most to a good and happy life.

Our Genuine Wealth Model 2.0 (copyright 2013) was designed to assist those businesses, neighourhoods, and communities to help them mature into flourishing communities of wellbeing.

The Genuine Wealth approach begins with a heart-centred examination of our purpose, values, life operating principles, gifts, capabilities and dreams for a good life.

Indeed, we have learned that the word ‘wealth’ is a 13th Century Old English word that literally means ‘the conditions of wellbeing.’

The Genuine Wealth approach helps you and your organization, neighbourhoods or community measure progress in terms of what really matters to your dreams, optimizes your gifts and ensures that wellbeing is continually being maximized while managing risks to your future wellbeing.

We believe it is possible to design a community or business/enterprise so that it achieves the highest possible wellbeing conditions. We appreciate that basic human needs, including clean water, air, good land, affordable housing and good food, are preconditions for the pursuit of happiness and a joy-ful life.

We appreciate that without a sufficient living income or wage, financial anxiety can rob people of their hopes and dreams.

In our own lived experience, we have come to understand the benefits of eliminating debt and mortgages in our lives. We have experienced ‘genuine wealth’ when we have been freed of paying unnecessary interest on our debts giving us the freedom to work less and contribute more of our free time in service to others and our communities.

Indeed Genuine Wealth was formed by individuals who believe in the idea of ‘genuine wealth’ as a life style, including being genuine and actions which are aligned with strong virtues for a good life.

Everyday we try to live according to the principles of genuine wealth including working hard and with a sense of purpose, that our work is contributing to improving the wellbeing conditions for ourselves, our families, our friends and our community.

We believe a life-style of genuine wealth starts with getting our financial wealth in order by eliminating personal debts, which can be a liability to our happiness. We know how to develop personal and communal and enterprise business plans that can ensure financial resilience for your businesses and your household, maintaining a healthy balance between meaningful work and your personal (and communal) values and dreams of a good life.

In our own experience we have come to learn how to get in touch with our true gifts and purpose for living. We understand what it feels like when we are living a life of purpose; when we experience personal flourishing and flow. It is in these conditions that we experience happiness and true joy.

We appreciate that the science of wellbeing has found that relationships of trust, reciprocity and altruism are perhaps the most important of our ‘social assets.’ We know how difficult it is to build trust amongst family, friends, neighbours, and work colleagues; and how quickly trust can be lost or damaged. We appreciate the importance of this ‘relational capital’ to our individual and collective wellbeing. We have become experts in measuring these relational assets, including trust, and how to strengthen these social assets.

We appreciate the importance of natural capital assets (water, air, land and ecosystem assets) to our wellbeing. Without these natural assets, we would not enjoy material wellbeing.

Lastly we appreciate the importance of maintaining a healthy balance between the four aspects of a human being: physical, mental, emotional and spiritual wellbeing. This is based on the Aboriginal model of the medicine wheel, with these four aspects of a person that are driven forward through volition (freewill) and must be continually balanced (and rebalanced).

Finally, we know that the word ‘happiness’ is not simply a fleeting emotion but comes from the Greek word ‘eudaimonia’, which means ‘wellbeing of spirit.’ Genuine happiness, we believe, comes from experiencing a degree of spiritual joy in our hearts and souls. Maslow suggested that spiritual fulfillment and enlightenment was the highest of human aspirations.

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Ensuring Sustainable Happiness through Local Food Security for Edmonton: A Case for Conserving Edmonton’s Prime Food Lands

Ensuring Sustainable Happiness through Local Food Security for Edmonton

(this was based on presentation I made January 30, 2009 at the Food Today, Tomorrow and Forever conference in Edmonton, Alberta)

Potato Fields: Urban Farmland in Northeast Edmonton (Horsehills)

As the 2013 municipal election will soon be upon our great city of Edmonton, I would like to challenge all mayoral and counsellor candidates to consider an important question:

Could happiness and wellbeing be improved in Edmonton by securing enough ‘foodland’ within Edmonton’s boundaries to feed one million people in perpetuity?

Will the new city council have the courage and wisdom to treat the most productive food (farm) land in Alberta (with the longest growing season) as a strategy asset?

If we agreed to support the building of a new arena (a community and private enterprise (Oilers) asset) through our tax dollars why not find the accounting and political rational to put a good portion of Edmonton’s northeast farm/foodlands on the city’s ‘natural capital balance’ sheet which will generate ‘wellbeing’ returns on this wise investment for generations to come?

As Edmonton’s wellbeing economist I’ve examined the  potential options for the development of the Northeast section of the City also known as the Horsehill farmland, the question Edmontonians should be debating is: ‘how much ‘food’ land should be conserving as a ‘food land legacy‘ to provide our community with sustainable local food options?’

How much land would be required to feed 1,000,000 Edmontonians with enough vegetables per year?

What would the ‘genuine’ economic impacts — impacts to our community well-being —  of setting aside these lands, which will otherwise be developed for housing, commercial real estate and roads?

What would the WellBeing Returns on Investments be from food land conservation, beyond the property tax and other financial returns on development-as-usual?

How much land would we need to feed 1,000,00 Edmontonians

I’ve even done that showing that we could, in theory, sustain roughly 200 lbs of vegetables per annum for  1 million Edmontonians on that original 85,000 acres of Horsehills lands, with ‘spin-farming’ methods of gardening. Spin Farming can generate yields of roughly 26,000 lbs per acre. The average North American consumes 200 lbs of vegetables per year (9.2% of their diet). That would mean that we would only need to set aside 7,576 acres of land for meeting a good percentage of Edmontonians vegetable needs (not all of course since many vegetables will need to be imported!).  So we are talking about setting aside less than 9% of the original Horsehills area! The value of locally grown vegetables with lower transportation costs and distance to markets is of enormous value to our well-being. Some estimates suggest that the returns per acre on spin farming could be as high as $24,000/acre which is much better than conventional farming (average per acre cash farm receipts for Canada were only $320/acre in 2011). So are any of these numbers in the GEA materials and the ‘ask’ of City Council? These are the kinds of figures we need to present to the Mayor and Council; to date while trying to compel my Legacy board to do so, most have been reluctant (some feel ‘we should preserve all of the lands available’, which is unreasonable position from which to negotiate). I would prefer to go in with a clearly rational ask as I have suggested based on an analysis of how much land would we need to sustain our local food needs.

 

According to the GDP accounting calculator, the more money we spend the better off society is presumed to be. However, few people realize the GDP does not distinguish between expenditures in the economy which constitute a genuine improvement in individual, family/household, community or environmental well-being and those expenditures which actually reflect the loss of our social, human and natural capital assets. For example, Edmonton or Alberta’s GDP could be increasing every year as we deplete the amount of arable land in the interest of short-term benefits from oil and gas extraction and refining.

This is not only poor economics – in the traditional definition of economy as the science of the study of the well-being of households, it is also flawed capital accounting.

Wise economics would counsel that we know the condition of the capital or assets that contribute most to what we feel is ‘the good life.’  Wise stewardship like wise economics would consider also the material needs of each household including their need for good and healthy food, shelter, clothing, energy and ultimately happy living conditions. Yet our economic accounting systems do not measure these things in the GDP. All the GDP cares about is how much money changes hands.

Food is one of the most important contributors to our physical, emotional and spiritual well-being. Healthy food comes from healthy soils or land. New movements such as the Slow Food movement that originated in Italy are examples of groups of citizens and food producers who have united to renew our relationship and celebration  of food, grown locally and reflecting unique local growing conditions and cultural heritage.

I have spent some time attempting to measure the true economics of food production and how much land we need to feed a million or more Edmontonians on the land we occupy.

Surprisingly I found little information on how much land is available within Edmonton’s boundaries or surrounding counties for feeding enough Edmontonians with healthy foods. In other words, we have no account of arable land. Land is an important asset yet we have no balance sheet for the City or our communities which monitors the area of land available for growing food. Moreover, we know literally nothing about the natural productivity of the soil itself to generate respective yields of healthy supplies of vegetables, fruits, livestock, dairy and poultry products. We are, however, good at tracking how many cattle we produced and export to markets outside of Alberta yet have no idea of what we are capable to producing locally to supply our local populations with a sustainable supply of healthy food.

Edmonton’s Ecological Footprint

The average Edmontonian requires about 9.80 hectares of land in 2007 to meet their food, energy and material needs. That may not seem like a lot but consider that multiplied by about 750,000 citizens amounts to 7,345,000 hectares of total land required to meet our collective needs. The bad news is that Edmonton’s land area is only 69,980 hectares. This means that our total available land area would only meet less than 1% of Edmonton’s total land base! That means Edmontonians are entirely dependent on the importation of materials, energy, goods and services to meet our current life style.

Consider that the average world citizen only consumes 2.7 hectares of global hectares of land to meet their needs. This means that Edmontonians are consuming about 3.6 times more land per capita than the average world citizen.

Consider also that there are about 2.1 hectares of land available for each citizen and 1.0 hectares for cropland and pasture land for growing vegetables and raising livestock on the planet to meet their material or corporeal needs.

How Much Land Do We Have in Edmonton to Grow Food?

Based on my most recent analysis of the Genuine Progress Indicators for the City of Edmonton, using civic land statistics, in 2007 there were 28,922 hectares (71,437 acres) of land that are zoned as agricultural land (which also includes green space) which represents 43% of Edmonton’s total land area of 69,980.  This means there are roughly only 0.04 hectares of agricultural land available per Edmontonian, a far cry from the current consumption of 2.42 hectares (of ‘food land’ that is currently consumed by the average Edmontonian.

The bad news is that we have actually lost agricultural land within our city boundary since 2003; a 12.1% loss of agricultural lands (or a loss of almost 4,000 hectares since 2003 when we had 32,914 hectares of agricultural lands within our boundaries.

That seems like a lot of land, however, consider that the average Edmontonian requires about 2.42 hectares, based on ecological footprint analysis that I conducted for the City of Edmonton. With almost 750,000 citizens in Edmonton this would require 1,861,991 hectares of land for producing the food Edmontonians currently eat. Of course the agricultural land available within the City boundaries would only meet a mere 1.6% of our current food demand! This means we are completely dependent on imports of food from agricultural land outside of our immediate city boundaries from somewhere on the planet.

What we don’t know is what percentage of those 2.42 hectares of food land are supplied by Alberta agricultural land and how much is imported. Alberta only has 646,557 hectares of Class 1 prime agricultural land available or only 0.19 hectares per capita based on 2008 provincial population figures. Again this would suggest that at best Alberta is only able to meet about 7.7% of our ecological ‘food’ footprint or demands. This means that a significant portion of our food consumed is imported.

Is there more land available outside of Edmonton for our food needs?

Based on a study I completed for the city of Leduc and Leduc County in 2006, I estimated that there are about 97,326 hectares of prime agricultural land available in Leduc County for growing good food, vegetables, livestock and other foods. If we add this to Edmonton’s agricultural land this would add up to 126,248 hectares or still 6.7% of Edmonton’s current food footprint.

How much land would be required to feed enough Edmontonians using intensive food production practices?

According to the analysis of my friend Joey Hundert, who has studied the benefits of SPIN farming, it would be possible to supply 750,000 people in the Edmonton with 200 lbs of vegetables (carrots, onions, garlic, beets, chard, etc) each per year with a mere 2,300 hectares of productive agricultural land.  The average American vegetable consumption per year is less than 10%, by volume, of a total food consumption of 2,175 pounds. To put this another way, one hectare of agricultural land within the city’s boundaries would provide about 132 people or approximately 50 Edmonton households (based on 2.6 members per household) with a sufficient supply of local vegetables. This depends on the success of SPIN farming yields; SPIN farming clearly provides significantly better yields of food per unit of land area. For example the vegetable food footprint amounts to a mere 0.003 hectares/person.

The typical American eats about 2,175 pounds of food per year. If all of this food were vegetables this would require a SPIN farming land area of 25,106 hectares to feed 750,000 Edmontonians. Again, if these yields are possible, it would suggest that Edmonton currently has sufficient agricultural zoned land (28,992 hectares) within its boundaries to generate enough for a total vegetarian diet.  Of course, these are hypothetical and crude estimates and do not considers land required for meat, poultry and other food production.

What is the real cost of shipping our food?

Some studies have estimated that the average food items can travel over 1500 miles  or 2400 kilometers (according to Michael Pollen author of the Omnivore’s Dilemma) s from farm field to your table.  If I were to price these kilometers the same way I expense my business travel costs (e.g. at $0.48/km) that would suggest my food is far more expensive to ship to my table than what I pay in the store. Why is this?

What I’ve always wondered is how food distributors can bring food into our Edmonton stores so cheap? How is it, for example, than bananas that come from Ghana can travel across the Atlantic ocean then by train or transport truck across Canada to my Edmonton grocery store and cost $0.49 per pound. That banana has traveled more than 10,000 kilometers.

I did some full cost accounting analysis for Ivor McKay when he tried living on a 100-mile radius diet in Edmonton for tomatoes.

What I found was the following:

I have been working with Ivor McKay who is living on the 100 mile diet here in Edmonton. Ivor works for CBC. I tried to calculate the true cost of his 100-mile diet effort contrasted with, for example, that  $2.50/lb hot house tomato from California (that probably really costs $45/lb tomato when you consider the real transportation costs). IF we applied the same cost of distance travelled calculus to Ivor’s 160 km diet we should be able to demonstrate that not only is this a wise choice financially but also ecologically and from a carbon footprint perspective.

Ivor is traveling about an average 40 km/week to get his basic food needs (21 km/week to markets) and an additional estimated 20 km/week for other incidental things (this is my estimate). Using the full cost of the Yaris driving per km, applied to a total annual travel of 2132 km would equate to $376.56 to meet ALL of his local food needs. Contrast that with the cost to travel to California and back for a single trip (just for tomatoes!) = $904.66! So we could easily argue that it is far more economical for Ivor to buy locally than to have to travel afar.

I have also calculated that Ivor’s average grocery bill for each week of his experience between August 18, 2007 and January 19 2008 (about six months) was roughly $262.22 per week, which is only the purchase price of the local food excluding transportation costs. This weekly bill if applied to a calendar year would equal $13,635 per year which is about 2 times more than the average Edmonton household spent on food in 2005. I also estimated that his total travel distance for a year of living on a 100-mile diet was only 2,132 kilometers (about 10% of the typical annual kilometers driven by Albertans). Using a full cost accounting on each kilometer driven in his Toyota Yaris, which includes the social cost of carbon, I calculated an average $0.18/kilometer driven for a total cost of $376 in transportation costs. While this may appear high consider the real health and well-being benefits that don’t get counted. To be fair you also need to consider the full costs and benefits in terms of reduced environmental costs or liabilities that our conventional food does not include in the price tag.

I also calculated the full cost of the organic tomatoes I bought at Superstore that might eat which come from Sacramento, California area. Normally I might pay $2.50/lb, however if I consider the full cost of driving from Edmonton to Sacramento and back (5,122 km door to door) in my 2008 Toyota Yaris with it’s fuel efficiency and carbon footprint, the real cost of that pound of tomato should be more like $45.23/lb. (plus the purchase price of the tomatoes when you get there) which is base on a full cost accounting of driving the Yaris which is $0.1697/km (this includes total car purchase price amortized over 10 years, fuel, maintenance, insurance, etc.). Add to this the social cost of carbon which for the Yaris would be $0.0069/km you get a total per km. cost of $0.177 to drive your Yaris to get stuff.

Does Locally Grown Food Cost More?

Some might argue that local food can sometimes consume more energy — and produce more greenhouse gases — than food imported from great distances. Moving food by train or ship is quite efficient, pound for pound, and transportation can often be a relatively small part of the total energy “footprint” of food compared with growing, packaging, or, for that matter, cooking it. A head of lettuce grown in Edmonton in the winter may have less of an energy impact than one shipped up from California. But grow that Edmonton lettuce late in the season in a heated greenhouse and its energy impact leapfrogs the imported option. So while local food may have its benefits, helping with climate change is not always one of them.

“All things being equal, it’s better if food only travels 10 miles,” says Peter Tyedmers, an ecological economist at Nova Scotia’s Dalhousie University. “Sometimes all things are equal; many times they aren’t.”


The Economics of Happiness Argument for Local Food

Price and cost isn’t all that counts when you consider the quality of life experiences associated with food and eating.  The Slow Food movement believes that food produced locally with passion, under wise land stewardship and ultimately a good dose of love , tastes better and is healthier for your body. It returns us to Hippocrates vision that “Let  your food be your medicine.”

The case for local food is several-fold: It tastes better and preserves species biodiversity of local vegetables, fruits and other foods. It supports small-scale economies and communities in the face of globalization and cultural homogenization. Money spent on local food has a greater money multiplier impact. Buying food from farmers markets results in more engagement with other people; more relationships contributes more to personal happiness than money and education.

One of the arguments most often heard, however, is about energy. And at a time of rising concern about climate change, the great distances that most of our food travels are a potent symbol of the system’s profligacy and cost in greenhouse gases. For local-food activists, “food miles” have become a favored measure of environmental impact. Food activists in the US and especially in Western Europe have pushed to put the term on menus and grocery-store labels.

If we were to honestly measure our food miles and attach those to our labels as well as include the real environmental costs of food production and transport, local food would soon become truly economic. The real dividend, however, is in improved quality of life, healthier diets, and ultimately happiness.

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