Hidden costs of wine: quantifying environmental externalities of organic and integrated management

Abstract

Agriculture is one of the largest contributors to environmental pollution and causing significant impacts on human health, ecosystems, and resource availability. Transitioning to more sustainable agricultural systems is crucial to mitigate these externalities. Organic agriculture is often seen as a key strategy for sustainable food production. However, the insufficient internalization of externalities in food prices can mislead consumers, promoting the demand for products that may be inadequately priced and environmentally unsustainable. Therefore, this study aims to quantify the external costs of organic and integrated viticulture using data from a long-term field trial in Germany. Life Cycle Assessment (LCA) was applied from cradle-to-farm-gate with functional units based on vineyard area (1 hectare) and grape yield (1 kilogram) to include the impact of changes in yield. Environmental impacts were monetized using True Cost Accounting, with factors derived from European Commission’s recommendations, and disaggregated across value chain steps to identify key contributors to externalities. The results reveal minor differences in overall externalities between organic and integrated viticulture. External costs per hectare were slightly lower under organic management (612 €/ha with central monetization factors), while costs per kilogram of grapes were higher due to reduced yields. Shifts in the relative contribution of impact categories were observed, with climate change and particulate matter identified as the most significant contributors to external costs. In terms of endpoint areas of protection, damages to human health and ecosystems accounted for a larger share of the total externalities compared to resource depletion. These findings highlight the importance of considering yield variability and multiple environmental impacts when evaluating the sustainability of viticultural practices. While external cost assessment provides valuable insights, its inherent limitations, e.g., valuation-, geographical- and temporal- uncertainty, and the aggregated nature of the data must be carefully considered to ensure their appropriate use in environmental policy and decision-making.