ABSTRACT
Current economic systems do not capture all positive and negative social, environmental, and health-related externalities related to agriculture and food systems. This often results in distorted prices and unintended negative social and environmental impacts. In this chapter we review current accounting methods and frameworks commonly used to assess externalities that arise from food production and identify gaps in our knowledge. We highlight the Economics of Ecosystems and Biodiversity (TEEB) process that forms the basis of True Cost Accounting (TCA) in order to address the invisibility of nature in economics. Based on the shortcomings highlighted by the TEEB process and gaps in current literature, we establish conceptual foundations of TCA in agriculture and food systems. The scientific and economic foundations of TCA are based on the principles of Ecological Economics and expand traditional economic accounting to include the measurement and valuation of natural, social, and human capital. The chapter concludes by highlighting the utility and challenges for TCA in agriculture and food systems.
