Picked Pockets: Taxpayers Pay Heavy Price for Endless Growth
Investment in local food and addressing climate reality would help support a sustainable economy and save tax dollars
April 20, 2015
The costs associated with climate-change impacts and health-care issues concerning diabetes and obesity are in the billions. Even more alarming, is the fact that special-interest laws and shortsighted policy disregard the connection between environment and public health and place the financial burden on repairing the damage done to both on taxpayers.
In 2012, the year Superstorm Sandy ravaged much of the Northeast, U.S. taxpayers paid three times what private insurers paid out to cover losses from extreme weather. From 1995 to 2012, $19 billion in tax money subsidized junk-food ingredients, such as high-fructose corn syrup, compared to only $688 million in subsidies to grow apples.
Despite significant progress in understanding the impacts of climate change and America’s addiction to empty calories, sugar and fast food, costs associated with a changing climate and unhealthy diet are frequently neglected and typically not calculated — at the continued expense of the economy, public health and the environment.
Largely because of processed foods — strategically placed in supermarkets and heavily marketed to children — filled with government-subsidized ingredients, obesity has become a major public-health problem. In fact, if subsidies for junk food instead went directly to taxpayers, each one of them would receive enough money back to buy 21 Twinkies, according to a 2013 report. If the subsidies for growing apples were returned to taxpayers, each of them would be able to buy half a red delicious apple.
Americans consume 31 percent more packaged food than fresh, and about two-thirds of adults and nearly a third of children are overweight or obese, according to the Centers for Disease Control and Prevention (CDC).
“Food is the first and last line of defense when it comes to health,” said Julian Forgue, who opened the popular Providence restaurant Julians two decades ago. “Sugar is killing us.”
America’s rising obesity rates are placing a substantial financial burden on government-funded medical programs — a cost that is ultimately shouldered by taxpayers. One health study has found that the percentage of Medicare beneficiaries who were obese rose from 21 percent in 1997 to 29 percent in 2006. That percentage is continuing to climb.
In fact, researchers estimate that obesity accounts for nearly 10 percent of all medical spending, according to a 2009 study by the CDC. Researchers also estimate that if U.S. obesity trends continue, obesity-related medical costs could rise by $43 billion to $66 billion annually during the next 15 years. Per capita medical spending is some $2,750 higher for people who are obese.
Obesity is linked to more than 60 chronic diseases. According to the American Cancer Society, 572,000 Americans die of cancer annually, and about a third of those deaths are linked to excess body weight and poor nutrition. About two-thirds of U.S. adults with type 2 diabetes are overweight or obese.
The country’s increasingly heavier and unhealthier population drags down the economy. According to a 2012 study by Cornell University, 21 percent of U.S. health-care costs — roughly $200 billion annually — are caused by obesity, an underlying factor for heart disease and diabetes.
Since 1980, the rate of obesity in children and adolescents has almost tripled, according to the CDC. In Rhode Island, 63 percent of the population is overweight or obese, according to Christopher Ausura, food systems coordinator for the state Department of Health.
“A sick population costs the state a lot of money,” said Ausura, noting that it costs Rhode Island about $1.5 billion annually to treat illnesses associated with obesity, diabetes and hypertension.
To combat this 50-year assault on our tastebuds, waistline and heart, Forgue believes children, beginning at a young age, should be taught the value of food and the importance of nutrition.
But in many southern New England public school districts, and across the country, budget cuts and standardized test preparation have led to the elimination of what was once called “home economic” class.
“If we educate the youth, we’ll educate ourselves. Our schools are our greatest think thanks,” said the 44-year-old restaurateur who has cut his sugar intake dramatically in the past several years. “We need to start with the kids and get our seniors living in high-rises involved in community gardens and growing food.”
Obesity strikes all ages and rungs of the social ladder, and in the past decade there has been a heightened awareness of the so-called “food desert” phenomenon — low-income urban areas that lack access to fresh fruits and vegetables.
In fact, many of our population’s most vulnerable citizens — children and the elderly — are surrounded by unhealthy food choices, according to the U.S. Department of Agriculture (USDA). This lack of options leads to poor nutrition, increased health risks and rising health-care costs. It’s a vicious loop that’s bad for public health and the economy.
“Agricultural production is inextricably linked to the health of our nation, and every American deserves access to safe, nutrient-rich food,” Sonny Ramaswamy, director of the USDA’s National Institute of Food and Agriculture, said in early February when announcing the availability of $16 million in federal funding to support research, education, and efforts to improve food production and increase food security. “This funding will increase food security by improving agricultural production systems at the regional and national levels and by encouraging diverse agricultural production.”
Despite its growing number of farmers markets and taste for local food, southern New England isn’t immune to the challenges of developing a more sustainable, productive and economically viable food production system.
A better coordinated local/regional food system would support better nutrition, lower health-care costs and strengthen southern New England’s economy. It’s a conversation Leo Pollock, network coordinator for the Rhode Island Food Policy Council, said he is surprised we aren’t really having.
“To me, it’s amazing that we have a farm bill that subsidizes the commodity production of processed food, while, at the same time, taxpayers are footing the bill for increasing health-care costs tied to diabetes and obesity,” he said. “When do we realize this isn’t working anymore?”
Common sense tells us that people who eat a healthier, more nutritious diet typically have less of a need for health care and related government programs. A strong regional food system that encourages and supports community gardens, urban farming and local food production would improve public health, lessen the financial burden on taxpayers, create jobs and help protect the environment.
“It’s hard to convince people to invest upfront in something that will pay off in future cost savings,” Pollock said. “An investment in better population health is a long-term vision. Population health doesn’t change in six months. But investing in healthy food also supports a sector of the local economy that has a direct impact on that outcome.”
As part of the Rhode Island Public Interest Research Group’s 2013 “Stop Subsidizing Obesity” campaign, a press conference was held in August of that year at Lippitt Park in Providence. Rep. David Cicilline, D-R.I., was one of the speakers.
“With obesity continuing to be one of our primary public-health concerns, there is no reason for the federal government to continue subsidizing corn and soybeans to be processed into junk-food additives,” he said. “The government is spending billions to subsidize junk food and very little for fresh fruit and vegetables. Congress needs to cut off generous subsidies for large agricultural corporations and do a better job promoting good public health policies.”
Nearly two years later, little has changed. Most of the fruits and vegetables grown in Rhode Island, Massachusetts and Connecticut are still considered “specialty crops” by the USDA — the same agency that believes Americans deserve better access to healthy food. That specialty distinction means that local farmers growing fresh produce essential to a healthy diet are receiving virtually no taxpayer support.
Earlier this year, Kraft Singles, those individually wrapped slices of heavily processed “cheese product,” became the first product to earn a nutrition seal from the Academy of Nutrition and Dietetics, the trade group that represents 75,000 registered nutrition professionals. These slices can’t be called cheese, because less than 51 percent of their composition is actually cheese. The rest is composed of other ingredients, such as milk protein concentrate, a cheap milk byproduct.
The Kraft Foods Group, a global food power, now has permission to use the academy’s new “Kids Eat Right” label to better market its fake cheese to parents.
Instead of using taxpayer money to subsidize Big Ag junk, taxing consumers for drinking Big Gulps and vilifying trans fats, local food advocates believe we should be incentivizing the consumption of healthier foods.
“Education programs and cooking classes are great, but what has to happen is that we need to shift people’s diets not by guilt or bans but by increasing incentives,” Pollock said. “Incentivizing healthy food also creates a whole new customer base for local farmers.”
A 2013 study by the CDC says nutrition assistance programs play a critical role in increasing fruit and vegetable consumption. According to the 16-page report, programs such as the Supplemental Nutrition Assistance Program (SNAP) and Women, Infant and Children (WIC) improve access to fruits and vegetables for individuals and families with lower incomes.
Many states with the highest consumption of fruits and vegetables also have higher national scores on access to farmers markets and acceptance of nutrition assistance program benefits at farmers markets, according to the CDC.
The study highlights the value of increasing SNAP recipients’ access to farmers markets through the use of nutrition incentive programs similar to Wholesome Wave and Farm Fresh Rhode Island’s Double Value Coupon and Fresh Bucks programs and through the availability of point-of-sale terminals at farmers markets, which make it possible to accept electronic SNAP benefits.
The Massachusetts Department of Transitional Assistance and the Department of Agricultural Resources partnered in 2009 to increase SNAP recipients’ access to farmers markets. The agencies helped finance point-of-sale terminals and transaction fees associated with SNAP purchases, increased people’s purchasing power through incentives that matched SNAP purchases and promoted these benefits widely to SNAP recipients.
In the first year, those efforts increased the number of farmers markets that accepted SNAP from 30 to 58 and boosted SNAP sales at those markets by 500 percent.
Late last year, the IRS ruled that nonprofit hospitals can claim the help they provide communities to “ensure adequate nutrition” as part of their exemption from federal taxation. Basically, it means hospitals can claim tax credit for programs that reduce the cost of fruits and vegetables at farmers markets and grocery stores, and for “prescriptions” that substitute healthier foods for medicine.
The idea isn’t a new one in southern New England. For the past several years, Rhode Island-based Thundermist Health Center, in partnership with Farm Fresh Rhode Island, has been providing nutritional counseling and “prescriptions” for fresh fruits and vegetables at monthly clinical sessions, in the form of vouchers.
The goal of the program is to improve the health of communities by giving individuals and families the resources and incentives to eat more locally grown produce. Enrolled individuals redeem their vouchers for tokens that pay directly for fruits and vegetables at farmers markets — an important incentive when nearly 20 percent of the families in Rhode Island are food insecure.
Pollock also believes primary-care physicians and insurance companies should have more active roles in this needed conversation. “A huge momentum change is necessary to change people’s eating habits. And we need to change the way people think about public health.”
The insurance industry estimates that 2012 was the second-costliest year in U.S. history for climate-related disasters, with more than $139 billion in damages, according to a 2013 report by the Natural Resources Defense Council (NRDC). Private insurers covered about 25 percent of those costs ($33 billion), leaving the federal government and its public insurance enterprises to pay for most of the remaining claims.
Extreme U.S. weather events in 2012 also caused about $110 billion in losses to the economy, or more than $300 for every American, according to a 2013 report by Ceres, a Boston-based nonprofit that advocates for sustainability leadership.
The report entitled “Inaction on Climate Change: The Cost to Taxpayers” notes that as the frequency and severity of extreme weather events intensify federal and state disaster relief and insurance programs will become increasingly unsustainable.
Federal taxpayers already support the National Flood Insurance Program, which is at least $24 billion in debt, and state taxpayers are sharing in the costs of supporting state-run insurance plans, according to the 31-page report.
“When we examine the full costs of public programs that pay for disaster relief and recovery from extreme weather events — ad hoc disaster assistance appropriations, flood insurance, crop insurance, wildfire protection and state run “residual market” insurance plans — we can begin to understand the price to U.S. taxpayers of inaction on climate change,” reads the first paragraph of the executive summary in the Ceres’ report. “Each of these programs is highly exposed to catastrophic weather events. As climate change results in more frequent, volatile and damaging extreme weather across the country, the potential liabilities of these public programs and the bottom line costs to taxpayers will soar. Taxpayers bear an additional burden — damages from extreme weather events that are neither insured by the private insurance market nor reimbursed by government programs. Continuing to ignore these escalating risks may be more comfortable than confronting the challenges of climate change, but inaction is the far riskier and more expensive path.”
Catastrophe modeler AIR Worldwide has estimated that the value of insured properties along the Atlantic and Gulf coasts, currently about $10 trillion, could double every 10 years.
The Intergovernmental Panel on Climate Change (IPCC) has concluded that there is a 99 percent to 100 percent probability that global mean sea-level rise will continue for centuries. The global hot spot for sea-level rise is the Atlantic Coast, from Massachusetts to North Carolina.
In a Rhode Island Department of Health (DOH) report released earlier this year, the department’s former director didn’t downplay the impacts of a changing climate.
“The destabilizing effects of climate change on our environment are among the most significant potential health threats faced by individuals and Rhode Island communities today. Our mental health, physical health, the infrastructure of our cities and towns, and the safety of our food and water will all be impacted by more frequent heat waves, storms, droughts, floods, and sea level rise. In Rhode Island, where our economy, culture, and identity are all so closely tied to the ocean and to Narragansett Bay, the effects of climate change will be particularly acute,” Dr. Michael Fine wrote.
Eleven of the past 12 years were among the 12 warmest years on record since 1850, and heat has caused more deaths in the United States than any other type of extreme weather event, including tornadoes, hurricanes, floods, earthquakes and lightning, according to the CDC.
With climate change, extreme heat and hot weather in southern New England have already increased in frequency and magnitude. In 1970, for example, Providence had four days with a maximum temperature above 90 degrees Fahrenheit. By 2013 that number had risen to 22 days, according to the DOH report.
While the funds needed to pay for recovery from climate disruptions hit a record high in 2012 and is expected to continue to grow, the budget for programs to mitigate climate disruption, such as environmental enforcement, energy efficiency and renewable-energy research, suffered cuts of more than $100 million in the March 2013 “sequester,” according to the NRDC. Climate-change programs and initiatives designed to address extreme storms, wildfires and drought remain under constant pressure of being cut.
Reducing greenhouse-gas emissions, for one, would yield important economic and public heath benefits, according to Environmental Protection Agency (EPA). The average supermarket item in the United States, for example, travels about 1,500 miles between production and consumption. Local food production would consume less energy and reduce pollution.
Damages from severe storms alone can bridge many economic sectors. Hurricane Katrina, for example, damaged not only hundreds of thousands of housing units and other urban infrastructure, but it also affected as many as 2,100 oil platforms and damaged more than 15,000 miles of pipeline. Lost revenues related to these damages amounted to nearly $11 billion, and the total economic cost estimates from Katrina range upward of $200 billion, or more than 1 percent of U.S. gross domestic product, according to 2007 study by the Center for Integrative Environmental Research (CIER) at the University of Maryland.
Climate change also will continue to trigger increases in energy demand for cooling that will outpace declines in heating requirements. For example, electricity demand in Massachusetts may increase by 40 percent in 2030 because of climate change alone, most of which will occur in the summer and require significant investment in peak load capacity and energy-efficiency measures, according to the CIER study.
The country’s plan to deal with these problems has been hindered by climate-change deniers, such as the Oklahoma senator who heads the Senate Environment and Public Works Committee who brought a snowball to the Senate floor in February to somehow discredit science. The deniers cut investment in climate adaptation and ignore science for the sake of alleged deficit reductions, votes and campaign donations.
Florida’s governor seems fine with ignoring scientific evidence and sending current taxpayers and future generations the bills to clean up the costly damages associated with rising seas and more intense flooding that are troubling the Sunshine State. Southern New Englanders will help pay for the climate-related flood damage that already has been done and will be done to his state.
The National Flood Insurance Program includes several state programs, such as the one for Florida, which has more than 2 million policyholders and a face value of $475 billion, that had to be folded into the national program as the rising cost of flooding wasn’t being covered by private insurers, according to the NRDC.
The true economic impact of climate change also is riddled with hidden costs. Besides the replacement value of infrastructure, for example, there are costs associated with re-routing traffic, lost workdays, temporary shelters, emergency supplies, the spread of pests and disease, and lost tax revenue.
The continued insistence by Big Business and special interests to avoid addressing unavoidable climate change will continue to force taxpayers to write checks that eventually will bounce.