Diet, Economic Development and Climate Change

We study the impact of economic development on greenhouse gas emissions (GHG) from agriculture. We document the environmental implications of two agricultural transformations linked to economic development. First, a shift in consumer demand to food products with higher GHG emissions. Second, the adoption of modern, input-intensive technologies with high levels of GHG emissions. We incorporate these mechanisms in a quantitative, trade model by featuring different income elasticities of demand across food products, and multiple agricultural technologies for production across grid-cells covering the surface of the Earth, with food products and technologies being heterogeneous in their GHG emission intensity. Using the model's open economy structure, we prove that the income elasticities are identified without price data. We conduct a host of policy counterfactuals related to economic growth, trade policies, and sustainable diets. The GHG emissions from economic growth is understated by more than one third if diet and technology changes are shut down, and overstated by one hundred percent if global food supply readjustments are ignored.