Quantifying and monetising externalities in Kenya's green bean value chain : implications for stakeholder and policy actions

Abstract

Growing international demand for fresh green beans is driving producers in Kenya to expand and intensify crop production for export, creating negative environmental, health and social externalities (hidden costs). However, empirical evidence on the magnitude of these externalities remains limited. Estimating these externalities to reveal their magnitude could encourage stakeholder and policy actions that ensure a more environmentally sustainable, health-protective and socially equitable value chain. This study quantified and monetised negative environmental, health and social externalities in Kenya's green bean value chain. True cost accounting approaches, including life cycle assessment, disability-adjusted life years, the True Price methodology and the value of statistical life years, were used to analyse data from secondary sources. The total hidden costs were estimated at 124.03 million USD (range 115.93–132.20), at least twice the 53.92 million USD market value of green beans and almost three times the export value (42.15 million USD). Environmental externalities accounted for 86.87 million USD (range 79.16–94.65), driven mainly by scarce blue water use and greenhouse gas emissions. Health externalities accounted for 0.97 million USD (range 0.58–1.36), primarily from pesticide exposure. Social externalities (36.20 million USD) reflected a large living income gap among smallholder farming households and the presence of child labour. In conclusion, Kenya's green bean value chain creates substantial negative environmental, health and social externalities. There is a need for stakeholder and policy actions to internalise externalities in the value chain. The findings can guide stakeholders and policymakers in developing and implementing strategies to reduce externalities.

HIGHLIGHTS • Kenya's export-oriented green bean value chain generates negative externalities. • First study to monetise environmental, health and social externalities in the green bean value chain. • Hidden costs totalled 124.03 million USD (range 115.93–132.20), twice the market value of green beans. • Costs included 86.87 (environmental), 0.97 (health) and 36.20 (social) million USD. • Recommended stakeholder and policy actions to internalise externalities.