Demand offsetting

For the last few years I’ve been avoiding factory farmed eggs because I think they involve a lot of unnecessary suffering. I’m hesitant to be part of that even if it’s not a big deal on utilitarian grounds. This is a pain since factory-farmed eggs are used all over the place (e.g. in ice cream, pastries, pasta…). I’d prefer just spend a bit of money and not think too much about what I eat.

In this post I’ll describe a possible offsetting strategy that I think is unusually robust and should be satisfying for many moral perspectives. The same proposal would also apply to many other animal products and potentially to the environmental impacts of consumption.


I think it’s possible to produce humane eggs where hens have positive lives and nothing horrifying happens to anyone. So my ideal would be to buy and use humane eggs. But this is tough since most of the time I’m eating eggs that someone else used as an ingredient (and even when I’m using them myself acquiring really humane eggs is kind of a pain).

So here’s an alternative that seems easier and just as good:

  • Some people raise humane eggs.
  • They sell these on the wholesale market as if they were totally normal eggs.
  • An inspector verifies that hens are treated extremely well and that they have sold N eggs on the wholesale market.
  • The inspector issues N “humane egg” certificates to the producer.
  • The producer sells these certificates in an online marketplace in order to cover the extra costs of humane eggs.
  • Whenever I eat an egg, I buy a humane egg certificate to go with it.


If I buy an egg and a humane egg certificate, what is the net effect on the world?

Buying the egg increased demand for eggs. If I hadn’t also bought a certificate, that would indirectly cause someone to make one more factory-farmed egg.

Buying the positive-welfare certificate means that someone sold a wholesale egg on my behalf and increased the supply of eggs. If I hadn’t also bought an egg, that would indirectly cause someone to make one less factory-farmed egg.

So my net effect on factory farmed eggs is zero. It’s as if I was making my own positive-welfare egg and eating it, with no effect on how many factory-farmed eggs other people make or eat.

(In reality both of these actions will have other effects, e.g. causing other people to eat more or fewer eggs, but I think they still cancel out perfectly.)

This is an unusually pure form of offsetting. I’m ensuring that every hen who comes into existence because of me is living a positive life. Put differently, buying eggs only hurt hens via some indirect market effects, and I’m now offsetting my harm at that level before it turns into any actual harm to a hen. I think this form of offsetting is acceptable on a very broad range of moral perspectives (practically any perspective that is comfortable with humane eggs themselves).

Cost to the consumer

I’d guess that positive welfare eggs cost something like 3x more than typical eggs. For example I think Vital Farms sells eggs for around $6/dozen vs $2/dozen for more typical eggs.

So for each $1 that I would spend on eggs, I’d need to spend $2 to buy an egg-offset certificate. I haven’t looked into it but I could imagine wanting to go even higher to have a margin of error and shoot for even higher welfare standards. Let’s call it $0.50/egg, suggesting a 4-5x markup over typical eggs.

(I’m also not sure about relative egg sizes and didn’t look into prices very precisely, for me personally the numbers are low enough that it doesn’t matter too much even if being conservative.)

How much would that cost in practice? Here are some estimates from quick googling of recipes:

The whole US produces about 100 billion eggs / year. If we wanted to offset all of that at the less-conservative $0.25/egg number, that would be $25B/year or $76 per person per year.

Benefits of decoupling (paying for welfare) from (paying for eggs)

Today animal welfare standards involve (at least) three parties: whoever raises the hen humanely, the grocery store or restaurant or whatever who uses the humane eggs, and the customer who demands humane eggs. Often there are more people still, like a host who prepares a meal for guests. And that’s all on top of the fact that people need to buy eggs at a particular place and time and so on. This means that dealing with humane eggs is always kind of a pain, and we need to get everyone to agree on a small list of standardized welfare requirements.

But humane egg certificates cut out all the middle men and just involve the producer and the consumer. So they make life way easier, and then they can also be specialized based on different welfare expectations. A certificate can say as much as it wants to about the welfare of the hens who produced it. Some customers could just go for anything that sounds “humane,” others could rely on more nuanced evaluations by non-profits who evaluate welfare claims, and the most over-the-top consumers could be matched with the most over-the-top farms.

Getting started

By the same token, it seems much less daunting to get this kind of system off the ground since it only involves two parties. A single farm could opt to sell wholesale eggs and allow inspections in order to serve a small number of customers, since they don’t have to geographically or temporally matched. I think it could be very fast to reach the point where humane egg certificates had as much flexibility as the current patchwork ecosystem for buying humane eggs.

The market could even get jump started by a tiny number of philanthropists (or even just one) who buy a few million dollars of humane egg certificates, negotiating directly with a few farmers. So this doesn’t necessarily involve any hard coordination problems at all.

Or we could literally have a kickstarter amongst people who are interested in humane egg certificates and have enough agreement about what kind of welfare standard they’d want to use (and then could pick someone to find and negotiate with a farm directly).

I think most philanthropists wouldn’t do this unless they were excited about setting norms or driven by non-utilitarian interests. In some sense this methodology feels like the “GiveDirectly of animal welfare,” extremely scalable and robust but a very expensive way to fix the problem. See the next section.

(In practice I think there are all kinds of issues with this proposal that I don’t know about, so I actually don’t know what the first steps would end up looking like, e.g. it depends on how small farmers think about humane eggs and wholesaling. This post is definitely written in spitballing mode, not as someone who understands the domain.)

Thoughts on cost-effectiveness

I’d estimate that it would cost something like $300B/year to offset all of the global harms of factory farming in this way, which feels at least 1-2 orders of magnitude worse than the kinds of welfare interventions that philanthropists feel excited about. Of course that’s also an argument against the cost-effectiveness of offsetting.

Here are some of the things going on:

  • Most interventions consist in lobbying or advocacy, trying to convince other people to pay a cost (e.g. to eat less meat or to pay for better animal welfare standards). I think that’s ethically problematic as an offsetting strategy relative to paying the cost yourself, and to a lesser extent I think there’s something to be said for philanthropists directly paying these kinds of costs in addition to trying to convince others to pay them.
  • The standards I’m imagining above (at $0.50/egg) are kind of “overkill,” designed to address all of the possible negative effects on a hen rather than targeting the lowest hanging fruit. Individual humane egg certificate purchasers could focus on particular standards (e.g. just ensuring that hens have dust baths and adequate cage space) and get to something closer to the cost-effectiveness of traditional hen welfare interventions, and the same norms and infrastructure could be used for both.


What would happen if many people tried to use this offsetting strategy?

If demand for humane egg certificates was equal to demand for eggs, then all eggs would be humane. Economically, this would be because the price of eggs has fallen below the costs of factory farming, with most of the value being in the humane certificates. I think this is basically the best possible case for an offsetting strategy, and I’d personally consider it better than abolition.

If deployed at large scale, there could be considerable customization of humane egg certificates and people who wanted it would be able to get high welfare standards with high-quality monitoring. In general I think that early adopters should view themselves as overpaying in order to share the burden of setting up the scheme and helping scale up humane agriculture.

9 thoughts on “Demand offsetting

  1. Local eggs in VT cost $3.00 – 3.50 per dozen, too variable and delicious to not be humane, confirms that $6 is bureaucratic overkill

  2. Certificates seem like good branding, but not necessary. This could just be funded by some billionaire. But I’d worry that at scale, it would make Vital Farms compete with charity eggs, and potentially damage the humane egg industry.

  3. This scheme has actually been implemented in electricity markets. The payment from your electric bill (which is marked up a bit) goes to a renewable energy provider, who is pumping their power output into the electric grid to intermingle with all others sources of power.

    I think this “you aren’t actually buying the atoms you paid for” structure is common for markets in commodities that flow through fixed, specialized infrastructure (crude oil, natural gas, electricity); when you “buy” the commodity from a provider, what you’re really doing is paying the provider to pump that much of the commodity into the common network, and you receive the right to draw the same amount out of the other end of the network.

  4. One issue with this is that humane eggs appear to actually be different from your standard factory-farmed ones. I don’t know how much this difference is meaningful, but probably a lot of people who buy expensive eggs care about it.

    Their arguments would presumably be something like: I am paying extra in part because I want eggs with better nutrients because the hens had better diets, and because the hens are not being given excessive antibiotics.

    (I am not an expert on eggs, but I can definitely tell the difference between milk from cows with different diets. It’s night and day.)

    1. Real eggs are unambiguously delicious, it’s as real as the difference between real milk and factory milk, the difference between a house and a prison, the difference between God and self-help books

  5. I think your current plan may rely on an assumption of perfect elasticity around demand/supply of eggs. i.e. that one extra egg bought leads to one extra egg supplied and that one extra egg supplied by a firm leads to one less egg supplied by other firms. I gather that decent estimates for such numbers do exist and could be used to account for these failures of perfect elasticity in your certificate scheme. Note that I’m not sure if this actually makes the revised scheme cheaper or more expensive than the simple model (the first effect would seem to help and the second to hurt). It may also be that there is some nice reason why these things must cancel out that I’m not grasping.

    1. If the egg I bought was perfectly fungible with the egg I sold, then it feels like the two elasticities should cancel out—given fungibility the effect is the same as if I had produced a humane egg and then bought it from myself, which has no effect on other egg producers or consumers. (Actually even that’s not clear since it might e.g. have a different effect on planning for future years’ egg production than it has on planning for future years’ humane egg production, not clear which would be bigger.) I feel reasonably good about that argument, but certainly it’s not watertight and it might be mistaken. I don’t have any other arguments for canceling out.

      I’m thinking of it as: for each particular fungible class of eggs (at a given time/place, of a given type and with given marketing, etc.) there is some parameter X that is equal to both “extra eggs created if I buy an extra egg” and “fewer eggs created by other people if I sell an extra egg.” Then the offsetting is only exact if X is the same for the egg I ate and the egg I produced. If X varies randomly that’s not a big deal (but like you say it does change the value from 0 to some unpredictable quantity as you say), if X is systematically lower in the places where I offset (e.g. because it’s cheaper to offset in those places) then I will be systematically worse than offsetting.

      And if I care about individual hens who are brought into being or not brought into being on my account, I only seem totally safe if the two eggs are in fact directly fungible rather than coming from markets that behave similarly (though at that point it starts to feel like worrying about butterfly effects).

  6. In theory, I agree there are conditions under which I’d be ok with egg production. But in practice, I don’t think any of those practices are commercially viable. In real life, I’d bet a lot of money on the “humane egg credit” being goodharted to hell. See e.g. carbon credits[*]. I expect most people who care enough to buy them to still be price sensitive in such a way as to end up getting them cheaper where possible, which will incentivize the humane-egg-credit groups to make the least-humane eggs they can get away with.

    My expectation is that an actually-functional humane system would be much more expensive than most people (>=95%) would ever voluntarily pay. Just eating plants seems like a much easier and less corruptible ask.


    1. My current understanding is that there are eggs on the market where hens have adequate lives (e.g I think vital farms is OK but that may be wrong) and they are something like 2-3x more expensive than normal eggs. Welfare judgments seem even harder than measuring carbon, but the counterfactual evaluation is easier in this case and there are various structural and institutional difficulties with carbon offsets. (I think that people using carbon offsets for personal consumption already often hold themselves to a much higher standard than people who buy the cheapest carbon offsets.)

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