Re-commenting the comment I left on Aaron Boddyâs linked post, because would genuinely be interested to read a reply to this from a proponent of the idea (It was a sincere question, I wasnât looking to just shoot the idea down):
This is a really interesting idea. But does a system like this risk increasing the number of animals being farmed?
Iâm struggling to wrap my head around the economics of it properly, but if you take it to extremes then it seems like it might?
Suppose Iâm a wealthy individual who is willing to pay a very high price to keep a hen out of a cage (more than the market price of all of her eggs over her life). Now imagine that the demand for eggs drops to zero. In the current system, farmers would stop raising hens, and animal activists would be happy. But in this new system, if it is still legal to cage hens, then a farmer could keep raising hens, threaten to put them in cages unless I pay them not to, and just throw all their eggs in the bin? Or am I misunderstanding the system?
Thatâs an extreme and unrealistic example, but just meant to illustrate that in principle paying for welfare (which is really paying someone not to do something bad) feels like it might carry a risk of increasing total amount of suffering, even if it decreases the average?
Iâm not sure the same problem applies to things like carbon credits.
A market for greenhouse gas (GHG) emissions decreases these if it functions well. Similarly, a market for the welfare of farmed animals would increase this if it functioned well. The welfare of farmed animals can be increased by i) decreasing the animal-years of farmed animals with negative welfare, ii) increasing the animal-years of farmed animals with positive welfare, or iii) making more positive animal-years of farmed animals with positive or negative welfare. I think iii) would increase the welfare of farmed animals more cost-effectively. I estimated School Plates in 2023, and Veganuary in 2024 increased the welfare of farmed animals 19.4 % and 1.20 % as cost-effectively as cage-free corporate campaigns. In addition, iii) generally increases the cost of animal-based foods, thus decreasing animal-years. So I expect a market for the welfare of farmed animals functioning well would decrease animal-years nearterm. Longterm, ii) may increase the welfare of farmed animals more cost-effectively than iii), and therefore animal-years may increase.
Thanks Vasco! I have written a reply to both you and Austin in the thread under Austinâs comment.
One thing that applies to your reply specifically: I donât see how a market for farmed animal welfare could decrease animal-years, as you suggest it might in the near term (though I may be misunderstanding how the system is supposed to work).
I get that animal welfare improvements often carry a cost, and that imposing an animal welfare improvement on a farmer with no compensation would therefore shift the supply curve, raise prices, and ultimately decrease the number of animals being farmed.
But my understanding of the animal welfare market idea is that these welfare improvements are not imposed, but bought. The person paying for the improvement would now need to pay enough that it is worth the farmer voluntarily implementing that improvement, which presumably would involve covering all of the cost of the improvement and then some. Since this is now an additional source of the income for the farmer, I think youâd expect it to shift the supply curve of animal products in the opposite direction, causing a drop in prices, and an increase in the amount of animal products consumed?
Thanks for the great point, Toby! Strongly upvoted. I now agree iii) would tend to increase animal-years because the improvements in the welfare of farmed animals would be bought instead of imposed (by legislation, or animal welfare corporate campaigns).
Weâd definitely want to avoid establishing perverse incentives (such as the famous âpaying for dead cobras â cobra farmingâ). At first glance, your example seems to gesture at a problem with establish credits for âalleviating sufferingâ versus âproducing positive welfareâ, which I agree we might want to avoid.
I donât think that paying for welfare has to be implemented as âpaying for someone not to do something badââsome carbon credits are set up way (paying not to chop down trees), but others are not (Stripe Frontierâs carbon capture & sequestration). Perhaps you as a wealthy individual would be better served by offering eg $1 per proven happy hen-year? So long as you set the prices correctly, I do think it would be a good thing to farm more animals in a way where the animals are generally happy, similar to how it would be a good thing to institute policies creating more happy human lives.
In practice, I think weâd want to balance considerations like potential perverse incentives/âblackmail, versus âhow feasible is it to actually implementâ, and also rely on sanity checks/âmonitoring/âinvestigative reporting to understand how these markets are functioning.
Thank you both for these answers, this is helpful!
It sounds like it is useful to distinguish two possible ways of implementing a welfare market:
A farmer is paid to change the welfare of their animals from negative (it would be better if they had never existed) to positive (it is better that they get to exist).
A farmer is paid to change the welfare of their animals from negative, to less negative, but the animals still lead net-negative lives overall.
I can see how on pure consequentialist grounds the first case would be good, and avoid the problem I was asking about. Although I expect a lot of vegans who have a principled objection to animals being treated as property will object to this, if increasing quantity of farmed animals is explicitly viewed as a positive outcome of the policy. I would certainly have reservations about it.
On the other hand, the second case seems like it does carry the risk I was asking about. We should expect the quantity of animals farmed to increase in a way that might outweigh the gain in welfare per animal (whether or not it does will I think depend on complicated economics things like the slopes of supply and demand curves?)
Re-commenting the comment I left on Aaron Boddyâs linked post, because would genuinely be interested to read a reply to this from a proponent of the idea (It was a sincere question, I wasnât looking to just shoot the idea down):
This is a really interesting idea. But does a system like this risk increasing the number of animals being farmed?
Iâm struggling to wrap my head around the economics of it properly, but if you take it to extremes then it seems like it might?
Suppose Iâm a wealthy individual who is willing to pay a very high price to keep a hen out of a cage (more than the market price of all of her eggs over her life). Now imagine that the demand for eggs drops to zero. In the current system, farmers would stop raising hens, and animal activists would be happy. But in this new system, if it is still legal to cage hens, then a farmer could keep raising hens, threaten to put them in cages unless I pay them not to, and just throw all their eggs in the bin? Or am I misunderstanding the system?
Thatâs an extreme and unrealistic example, but just meant to illustrate that in principle paying for welfare (which is really paying someone not to do something bad) feels like it might carry a risk of increasing total amount of suffering, even if it decreases the average?
Iâm not sure the same problem applies to things like carbon credits.
Hi Toby,
A market for greenhouse gas (GHG) emissions decreases these if it functions well. Similarly, a market for the welfare of farmed animals would increase this if it functioned well. The welfare of farmed animals can be increased by i) decreasing the animal-years of farmed animals with negative welfare, ii) increasing the animal-years of farmed animals with positive welfare, or iii) making more positive animal-years of farmed animals with positive or negative welfare. I think iii) would increase the welfare of farmed animals more cost-effectively. I estimated School Plates in 2023, and Veganuary in 2024 increased the welfare of farmed animals 19.4 % and 1.20 % as cost-effectively as cage-free corporate campaigns. In addition, iii) generally increases the cost of animal-based foods, thus decreasing animal-years. So I expect a market for the welfare of farmed animals functioning well would decrease animal-years nearterm. Longterm, ii) may increase the welfare of farmed animals more cost-effectively than iii), and therefore animal-years may increase.
Thanks Vasco! I have written a reply to both you and Austin in the thread under Austinâs comment.
One thing that applies to your reply specifically: I donât see how a market for farmed animal welfare could decrease animal-years, as you suggest it might in the near term (though I may be misunderstanding how the system is supposed to work).
I get that animal welfare improvements often carry a cost, and that imposing an animal welfare improvement on a farmer with no compensation would therefore shift the supply curve, raise prices, and ultimately decrease the number of animals being farmed.
But my understanding of the animal welfare market idea is that these welfare improvements are not imposed, but bought. The person paying for the improvement would now need to pay enough that it is worth the farmer voluntarily implementing that improvement, which presumably would involve covering all of the cost of the improvement and then some. Since this is now an additional source of the income for the farmer, I think youâd expect it to shift the supply curve of animal products in the opposite direction, causing a drop in prices, and an increase in the amount of animal products consumed?
Thanks for the great point, Toby! Strongly upvoted. I now agree iii) would tend to increase animal-years because the improvements in the welfare of farmed animals would be bought instead of imposed (by legislation, or animal welfare corporate campaigns).
Here is a related article about how carbon offsets actually raised emissions in China.
Weâd definitely want to avoid establishing perverse incentives (such as the famous âpaying for dead cobras â cobra farmingâ). At first glance, your example seems to gesture at a problem with establish credits for âalleviating sufferingâ versus âproducing positive welfareâ, which I agree we might want to avoid.
I donât think that paying for welfare has to be implemented as âpaying for someone not to do something badââsome carbon credits are set up way (paying not to chop down trees), but others are not (Stripe Frontierâs carbon capture & sequestration). Perhaps you as a wealthy individual would be better served by offering eg $1 per proven happy hen-year? So long as you set the prices correctly, I do think it would be a good thing to farm more animals in a way where the animals are generally happy, similar to how it would be a good thing to institute policies creating more happy human lives.
In practice, I think weâd want to balance considerations like potential perverse incentives/âblackmail, versus âhow feasible is it to actually implementâ, and also rely on sanity checks/âmonitoring/âinvestigative reporting to understand how these markets are functioning.
Thank you both for these answers, this is helpful!
It sounds like it is useful to distinguish two possible ways of implementing a welfare market:
A farmer is paid to change the welfare of their animals from negative (it would be better if they had never existed) to positive (it is better that they get to exist).
A farmer is paid to change the welfare of their animals from negative, to less negative, but the animals still lead net-negative lives overall.
I can see how on pure consequentialist grounds the first case would be good, and avoid the problem I was asking about. Although I expect a lot of vegans who have a principled objection to animals being treated as property will object to this, if increasing quantity of farmed animals is explicitly viewed as a positive outcome of the policy. I would certainly have reservations about it.
On the other hand, the second case seems like it does carry the risk I was asking about. We should expect the quantity of animals farmed to increase in a way that might outweigh the gain in welfare per animal (whether or not it does will I think depend on complicated economics things like the slopes of supply and demand curves?)