True Cost Accounting for Food Systems

David Bell
Jul 23
14 min read

Updated: Jul 25

When you buy food, you're not paying the full price. For every £1 spent on food in the UK, there's another £1 in hidden costs - expenses like environmental damage, public health impacts, and biodiversity loss. True Cost Accounting (TCA) reveals these hidden costs, showing how food production affects society and the planet.

Key findings:

UK consumers spend £120 billion annually on food, but hidden costs add £116 billion more.
These include:
- £44.94 billion in health costs from poor diets.
- £37.35 billion from natural resource degradation.
- £7.8 billion in biodiversity loss.
Globally, food systems generate $12–17 trillion in hidden costs each year.

TCA uses a 4 Capitals Framework - natural, human, social, and produced capital - to assess these impacts. It highlights how current food prices fail to reflect true societal costs, encouraging unsustainable practices. Solutions like cultivated meat could reduce these costs by cutting emissions, land use, and water consumption while easing pressure on public health systems.

The UK's food system urgently needs reform. TCA offers a way to guide policies, shift consumer behaviour, and prioritise low-cost, sustainable options for the future.

Key Components of True Cost Accounting

True Cost Accounting (TCA) is built around key elements that aim to capture the full impact of food production, from its effects on the environment to public health. These elements help us reimagine the real costs associated with how our food is grown, processed, and consumed.

The 4 Capitals Framework

At the heart of TCA is the 4 Capitals Framework, which evaluates the role of four types of capital: natural, human, social, and produced [2].

Natural capital includes the environmental resources essential for food production, such as fertile soil, clean water, a stable climate, and biodiversity. Industrial farming practices often degrade these resources, reducing soil fertility and polluting water supplies. On the other hand, regenerative farming methods, which restore soil health and boost biodiversity, contribute positively to natural capital.
Human capital refers to the health, skills, and well-being of people involved in or affected by food systems. This includes farmworkers’ safety, consumer nutrition, and public health. For instance, pesticide exposure harms farmworkers, while diets dominated by ultra-processed foods negatively impact consumer health.
Social capital encompasses the relationships, institutions, and structures that uphold food systems. This includes labour rights, community cohesion, equitable food access, and cultural food traditions. Industrial agriculture often displaces small farming communities, eroding these vital social networks.
Produced capital includes the physical and financial assets that sustain food production, such as farms, processing facilities, and distribution networks.

As Jenn Yates, Director of True Cost Accounting, explains:

"True Cost Accounting is a proven strategy for systems transformation. By expanding the lens beyond conventional metrics, TCA helps uncover both the hidden costs and hidden benefits of our food systems, enabling better decisions for people and the planet." [2]

This framework offers a clearer understanding of how food systems create value in some areas while causing harm in others, providing a more holistic perspective than traditional accounting methods.

Externalities in Food Systems

TCA also highlights the externalities - hidden costs and benefits - that traditional accounting methods often ignore. Globally, food-related externalities are estimated to total around £7.9 trillion annually, roughly 27% of the gross domestic product in low-income countries [4].

The numbers are staggering. Unhealthy dietary patterns account for over 70% of these hidden costs, while environmental costs make up about one-fifth. These include greenhouse gas emissions, nitrogen pollution, deforestation, and water overuse [5].

In the United States, researchers found that the true cost of the food system is $3.2 trillion annually, nearly three times the $1.1 trillion consumers spent on food in 2019. This means for every $1 spent on food, there are $2 in hidden costs [3].

Environmental Capital	Social & Human Capital	Economic Capital
Climate change	Labour rights and conditions	Spillovers (e.g., knowledge)
Acidification and eutrophication	Equity and living income	Monopoly power effects
Water stress	Local community rights	Food waste market effects
Land use transformation	Consumer rights	Income transfers
Biodiversity loss	Food security
Toxicity	Infectious diseases
Resource depletion	Health effects of diets

Environmental externalities are particularly striking. Agriculture contributes to climate change, depletes water resources through intensive irrigation, and causes biodiversity loss with monoculture farming. Social and human capital externalities include poor working conditions in food processing and the healthcare costs of diet-related diseases like diabetes and heart disease.

Challenges in Measuring True Costs

While TCA offers valuable insights, it faces several challenges that limit its widespread adoption. One major hurdle is the difficulty of assigning monetary values to environmental impacts, such as biodiversity loss or water depletion [6]. Current methods for calculating these costs are still evolving and often involve significant uncertainty.

Another issue is data gaps, which make it hard to apply TCA consistently across different regions or types of food systems [3]. Many environmental and social impacts lack proper monitoring, especially in developing countries where data collection infrastructure is limited.

Implementing TCA also requires expertise across multiple disciplines - economics, environmental science, public health, and social research [3]. Conducting thorough analyses can be resource-intensive, posing a challenge for smaller organisations or nations with limited budgets.

Finally, even when true costs are calculated, they don’t always translate into changes in consumer behaviour [6]. Price remains a driving factor in food choices, particularly for low-income families. While many may understand the hidden costs of cheap processed food, immediate affordability often outweighs long-term societal impacts.

Dr. Rajiv J. Shah, President of The Rockefeller Foundation, highlights these challenges:

"Understanding the true costs and benefits is critical for informed decision-making to make the U.S. food system more equitable, resilient, and nourishing for all." [7]

Addressing these obstacles requires investment in research and collaboration between governments, private organisations, and researchers. Developing better data collection systems and refining valuation methods are crucial steps. Even when complete data isn’t available, TCA provides a framework for combining quantitative analysis with expert judgment, helping guide policy and investment decisions toward healthier, more sustainable food systems.

Economic Impact of Hidden Costs in UK Food Systems

The UK's food system, when viewed through the lens of true cost accounting (TCA), reveals a troubling economic imbalance. Beneath the surface of what consumers pay at the till lies a web of hidden costs. These costs strain public services, exacerbate inequalities, and place a disproportionate burden on vulnerable communities. Let’s break down the health, environmental, and social costs that weigh heavily on the UK economy.

The Weight of Hidden Costs

For every £1 spent on food, an additional £1 in hidden costs is generated [1][10]. This translates to a staggering £120 billion in concealed expenses that society must absorb [10][12].

Health-related costs alone amount to £268 billion annually. This figure includes:

£67.5 billion for healthcare
£14.3 billion for social care
£10.1 billion for welfare
£116.4 billion in productivity losses
£60 billion tied to chronic diseases [8]

Professor Tim Jackson, an economist and Director of CUSP at the University of Surrey, illustrates the economic toll:

"The connection between diet and health is often discussed, but the economics of that link are staggering. When we factor in the health impacts, we discover that the true cost of an unhealthy diet is more than three times what we think we're paying for our food." [8]

Environmental costs surpass £30 billion annually. These include approximately £14 billion from greenhouse gas emissions and air pollution, £12 billion from food waste, soil degradation, and water use, plus £12.75 billion in biodiversity loss and £3.21 billion from soil carbon depletion [9][10][11].

The Sustainable Food Trust sheds light on how these financial burdens are passed on:

"UK consumers spend £120 billion on food each year yet there are serious environmental and health-related costs that generate a further £116 billion. These costs are not paid for by the food and farming businesses that cause them, nor are they included in the retail price of food. Instead, they are being passed on to the public through taxation, lost income due to ill health, and the price of mitigating and adapting to climate change and environmental degradation." [12]

Disproportionate Impact on Vulnerable Communities

The poorest households in the UK spend less than £40 per week on food, while the wealthiest spend over £90 [15]. However, food costs take up 17% of disposable income for the poorest families, compared to just 4% for the richest [15]. This disparity often forces low-income households into areas with limited healthy food options. For example, in Tower Hamlets, London, there are 42 fried chicken shops for every secondary school [14].

This inequality contributes to rising food insecurity. In 2023–24, the Trussell Trust distributed a record 3.1 million emergency food parcels [15]. The crisis also has emotional consequences, with "hunger trauma" affecting recipients and those providing aid [13].

Sue Pritchard, CEO of the Food, Farming and Countryside Commission, highlights the systemic nature of the issue:

"There is a clear and urgent economic case for changing the UK food system. The state of the nation's health is not simply the result of under-investment in the NHS. It represents the longstanding failure to take seriously the critical relationship between food and farming, health and inequalities." [8]

Rethinking the Numbers: Comparing Accounting Methods

Traditional accounting methods fail to capture the full economic impact of the food system. True cost accounting, on the other hand, provides a clearer picture:

Accounting Method	Food System Costs	Health Impacts	Environmental Costs	Social Costs	Total Economic Impact
Conventional Accounting	£120 billion (spending only)	Not included	Not included	Not included	£120 billion
True Cost Accounting	£120 billion	£268 billion (healthcare, productivity, welfare)	£30+ billion (emissions, biodiversity, soil)	Included in health and environmental figures	£418+ billion

Conventional methods reflect less than 30% of the food system's true economic impact. For instance, the health component alone highlights this gap. Ultra-processed foods dominate over half of the UK adult diet and nearly two-thirds of the adolescent diet [8]. Yet, their market price ignores the healthcare costs, productivity losses, and social care expenses they generate.

Professor Tim Jackson underscores the irrationality of this system:

"Some of these hidden costs, like lost economic productivity, can be hard to see. But over a third - an astonishing £92 billion each year - is directly shouldered by governments and households to address the illnesses caused by a food system that's, quite literally, making us sick. Most shocking of all is that solving this crisis would cost just a fraction of what we currently spend ignoring it." [8]

The Government-recommended Eat Well diet would cost £57 billion - less than 25% of the current £268 billion price tag of diet-related illnesses [8]. In other words, the current system costs four times more than it would take to fix it [8].

The Bigger Picture: Perverse Incentives and Systemic Costs

The rapid growth of the ultra-processed food market, expanding at 8.4% annually, far outpaces the 6.5% growth rate of the broader food market and nearly triples the global GDP growth rate (3%) [8]. This expansion is driven by hidden costs not being reflected in market prices, making unhealthy foods appear cheaper while healthy options seem expensive.

These economic consequences ripple across communities. Areas with limited access to healthy foods face higher rates of diet-related diseases, creating cycles of disadvantage that conventional accounting completely overlooks. True cost accounting, however, captures these interconnected impacts, offering a more comprehensive view of how food system choices affect the UK's economic and social wellbeing.

Cultivated Meat: A Pathway to Reducing Externalities

As discussions about the hidden costs of the UK's food system gain momentum, cultivated meat is emerging as a practical way to tackle many of the challenges tied to traditional agriculture. Drawing from True Cost Accounting (TCA) insights, cultivated meat offers a clear path forward. By uncovering the full spectrum of food system expenses, this innovative approach could reshape the UK's food landscape.

Benefits of Cultivated Meat

Cultivated meat redefines how meat is produced, addressing the externalities highlighted by TCA. Instead of raising and slaughtering animals, it grows real meat from animal cells in controlled environments. This method sidesteps many of the resource-heavy and pollution-driven aspects of conventional livestock farming.

Reducing Environmental Impact

When powered by renewable energy, cultivated meat production can slash greenhouse gas emissions by up to 92%, cut land use by 95%, and reduce water consumption by 78% compared to traditional beef farming [18][20]. To put this into perspective, producing one pound of beef with conventional methods requires a staggering 1,800 gallons of water. Meanwhile, livestock farming occupies 80% of agricultural land but contributes just 20% of global calorie intake [19].

The Climate Change Committee has recognised this potential, noting:

"Cultivated meat production could reduce the number of animals slaughtered for food. This could reduce antimicrobial use, land use and emissions of some greenhouse gases, such as methane. The Climate Change Committee has advised that UK meat consumption should reduce to meet net zero targets." [16]

Health System Advantages

By being produced in sterile, controlled settings, cultivated meat minimises health risks linked to traditional livestock farming. It reduces the need for antimicrobials, addressing growing concerns about antibiotic resistance. Additionally, these controlled conditions lower the likelihood of foodborne illnesses, easing the burden on public health systems.

Cleaner Air

Studies indicate that cultivated meat could cut air pollution by up to 94% compared to conventional meat production [17]. Cleaner air could improve respiratory health and reduce the societal costs tied to air pollution, presenting a win for public health.

These benefits not only address environmental and health concerns but also open doors to economic opportunities in the UK.

Economic Opportunities in the UK

With its ability to reduce external costs, cultivated meat brings a host of economic advantages alongside its environmental and health benefits. Research suggests that for every £1 spent on cultivated meat, an additional £2.70 is generated through the production of essential inputs [20]. Globally, the industry has already attracted over £3.1 billion in investment across 175 companies as of 2024, underscoring its commercial potential [18].

Regulatory Milestones and Market Growth

The UK is carving out a strong position in the global cultivated meat market. In July 2024, Meatly received approval to sell cultivated chicken as pet food in the UK [18], marking a significant step forward in regulatory progress. The UK government acknowledges the potential of alternative proteins to improve public health, protect the environment, and stimulate economic growth. As Linus Pardoe, Senior UK Policy Manager at the Good Food Institute Europe, explains:

"Cultivated meat could play a key role in boosting food security, driving growth and helping us hit our climate targets." [21]

Energy Efficiency

Cultivated meat production is far more energy-efficient than conventional methods. It uses 45% less energy compared to European beef production and achieves 78–96% lower greenhouse gas emissions, 99% lower land use, and 82–96% lower water use [19][20]. These savings translate into reduced hidden costs for the food system.

Strengthening the UK's Economic Position

The shift to cultivated meat offers the UK a chance to reduce its dependence on imported meat, cutting transport emissions and building domestic capacity in a rapidly growing sector. By exposing the hidden costs of traditional meat production, TCA underscores the economic and environmental value of cultivated meat. A stable regulatory framework will be crucial for maintaining consumer trust, ensuring quality, and attracting private investment [20]. With early regulatory advancements, the UK is well-positioned to capitalise on the economic potential of this emerging industry while addressing critical challenges in the food system.

The Cultivarian Society and Food System Transformation

Amid the hidden costs revealed by True Cost Accounting (TCA), The Cultivarian Society emerges as a driving force for reshaping the food system. This organisation envisions a transparent future where real meat can be produced without slaughter, addressing the challenges highlighted by TCA. Their work paves the way for integrating modern production techniques with informed consumer choices.

The Role of The Cultivarian Society

Founded by David Bell, The Cultivarian Society bridges the gap between scientific progress and public understanding. It views TCA as a tool for rethinking how food is valued and fostering a deeper connection between people and what they consume [22].

The Society’s mission aligns with TCA’s principles by advocating for transparency throughout the food supply chain. Through education, public engagement, and global outreach, it promotes cultivated meat as a practical solution to the hidden costs that traditional accounting often ignores.

Collaborating with researchers and startups, the organisation transforms complex scientific findings into accessible information for policymakers, consumers, and industry players. This strategy supports TCA’s broader aim of uniting stakeholders - from farmers to consumers - under a shared vision for reform [22].

The Society’s educational initiatives highlight how cultivated meat can address the environmental and economic challenges linked to conventional livestock farming, presenting a powerful argument for overhauling the current food system.

Building a Transparent Food System

Beyond advocacy, The Cultivarian Society actively works to foster transparency across the food supply chain, aiming to build public support for clearer food policies in the UK.

Its platform offers straightforward, evidence-based insights to help people grasp the true costs of their food choices. By simplifying complex environmental and economic data, it empowers consumers to make decisions that reflect the full impact of their actions.

At the heart of the Society’s mission is its dedication to evidence-based discussions. Instead of relying on emotional appeals or marketing gimmicks, it grounds its advocacy in thorough research and data. This approach enhances its credibility with policymakers and industry leaders who increasingly acknowledge the urgency of food system reform.

The Society’s efforts align with TCA’s goal of fostering transparency in regulatory decisions, particularly in rethinking agricultural subsidies. By showcasing how cultivated meat can minimise external costs, it provides policymakers with tangible, data-backed alternatives to traditional farming support systems [22].

Through community-building initiatives, The Cultivarian Society creates networks of informed advocates who influence local and national policies. These grassroots efforts complement its policy work, opening multiple pathways for meaningful change.

The organisation’s vision goes beyond promoting cultivated meat. It seeks to establish a kinder, more responsible food system - one rooted in compassion, scientific evidence, and informed choice. This comprehensive approach acknowledges that true progress requires not just technological advancements but also shifts in how society values and accounts for the costs of food production.

Conclusion

True Cost Accounting (TCA) is changing how we assess the value of food systems, shining a light on the hidden costs that retail prices often obscure [1]. These hidden costs - ranging from damage to ecosystems to public health expenses - reveal that food, which may seem cheap at the till, can carry a heavy societal price tag.

Globally, the unseen costs of food systems are staggering, estimated at $12–17 trillion annually [23]. Current market prices fail to account for massive environmental and health-related impacts [24], creating an economic bias towards unsustainable practices while leaving more sustainable options at a disadvantage.

Cultivated meat offers a promising way to address these issues. When produced using renewable energy, it has the potential to slash greenhouse gas emissions by up to 92%, reduce land use by 95%, and cut water consumption by 78% compared to traditional beef production [20]. Considering that livestock is responsible for 14% of global greenhouse gas emissions [20], this alternative could significantly reduce some of the most harmful impacts of conventional meat production.

The economic potential is equally striking. By 2035, the UK's alternative protein sector could add £6.8 billion to the economy and create 25,000 jobs. For every £1 spent on cultivated meat, an additional £2.70 in value could be generated through related industries [25][20].

The Cultivarian Society is at the forefront of advocating for change, combining scientific advancements with public awareness to help policymakers and consumers understand how cultivated meat can address the overlooked costs in traditional food systems.

FAQs

What is True Cost Accounting, and how does it provide a clearer picture of food systems compared to traditional methods?

True Cost Accounting (TCA) takes a deeper look at food systems by factoring in the often-hidden effects on the environment, society, health, and the economy. Unlike traditional accounting, which only tallies up direct financial expenses, TCA shines a light on broader impacts like carbon emissions, water consumption, public health challenges, and the loss of biodiversity.

By exposing these hidden costs, TCA empowers policymakers, businesses, and consumers to make decisions that support a more balanced and fair food system. It also underscores the potential of innovations such as cultivated meat, which can address many of the downsides linked to traditional meat production, offering a more considerate and sustainable choice.

How does cultivated meat help address the hidden environmental and health costs of traditional meat production?

Cultivated meat offers a fresh approach to addressing the hidden environmental costs of traditional meat production. By creating meat without the need to raise or slaughter animals, it slashes greenhouse gas emissions by up to 96%, reduces land use by an incredible 99%, and cuts water consumption by as much as 96%. These figures highlight its potential as a more sustainable way to help feed a growing global population.

Beyond its environmental advantages, cultivated meat also tackles pressing public health concerns. It removes the risk of zoonotic diseases and significantly reduces the dependence on antibiotics, a key factor in the rise of antibiotic resistance. By resolving these critical challenges, cultivated meat offers a step towards a food system that is not only kinder to the planet but also prioritises health and ethics.

What are the main challenges in using True Cost Accounting to uncover the hidden costs of food systems, and how can these be addressed?

True Cost Accounting comes with its fair share of challenges. For one, measuring the complex web of environmental, social, and health impacts tied to food production is no easy task. Reliable data is often missing, and figuring out how to allocate costs across the many facets of food systems can be equally tricky. These obstacles make it tough to fully reveal the "hidden" costs embedded in how we currently produce and consume food.

To overcome these hurdles, developing standardised metrics and methodologies is key. This would help ensure consistency and allow for meaningful comparisons. Another critical step is improving data collection - especially in areas like ecosystem services and public health - where gaps often exist. On top of that, using integrated approaches to evaluate multiple impacts at once can offer a more complete understanding of the true costs.

By addressing these challenges head-on, True Cost Accounting has the potential to transform how we think about food systems, paving the way for a fairer and more sustainable future.