The European Union's food system is unsustainable, contributing significantly to greenhouse gas emissions, biodiversity loss, resource waste, and unhealthy diets. Numerous studies advocate for simultaneous changes in agricultural practices, loss reduction throughout the food chain, and dietary shifts to create sustainable and healthy food systems. These analyses have been conducted globally and at the European scale, employing biophysical mass-flow models and economic models of partial or general equilibrium. Previous research at the European level has often focused on supply-side measures, such as extensification or intensification of agricultural practices, with varying conclusions regarding the economic impacts on consumers and producers. The European Commission's response to these issues is the European Green Deal (EGD), which takes a whole food chain approach, encompassing ambitious targets for pesticide and fertilizer use, organic farming, biodiversity, and food waste reduction. However, a gap remains in the assessment of the full economic and environmental impacts of the EGD, particularly concerning the objectives related to reducing food losses and shifting diets. This study aims to address this gap by comprehensively evaluating the market and non-market impacts of the three main EGD levers targeting the European food system.

Existing literature highlights the need for a multifaceted approach to food system sustainability, encompassing changes in agricultural practices, reduced food losses, and dietary shifts. Studies using various modeling approaches (biophysical mass-flow models and partial/general equilibrium economic models) at global and European scales have produced varied results on the impacts of these changes on environmental pressures and economic outcomes. At the European level, studies focused on agricultural supply-side mitigation strategies (extensification vs. intensification) have shown conflicting results on the economic impacts on producers and consumers. The studies mainly focused on reducing GHG emissions. Critically, many analyses have not fully considered the impacts of reducing food losses and shifting diets, only focusing on supply-side agricultural targets. The European Commission has acknowledged this limitation, emphasizing the need for a more holistic assessment incorporating all aspects of the EGD.

This study employs an original partial equilibrium economic model calibrated for the EU-27 using data from 2018-2020. The model simplifies the food system into three product aggregates: plant-based products (excluding fruits and vegetables), monogastric products (pork, poultry, eggs), and ruminant products (milk, dairy, ruminant meat). Agricultural land supply is variable and endogenously allocated among three uses: food/feed field crops, forages, and high-diversity landscape features. The model includes international trade via net trade flows, post-harvest losses at various stages, and constant margins between producer and consumer prices. Two ecological indicators (greenhouse gas emissions and biodiversity damage) and several nutritional indicators are incorporated. The model assesses the impacts of three EGD levers: (1) agro-ecological practices (reduced chemical inputs, increased high-diversity landscape features); (2) reduced post-harvest losses; and (3) dietary shift (reduced consumption of animal-based products), with and without iso-protein compensation by increased plant product consumption. The analysis evaluates market impacts (prices, production, consumption, trade, farmer revenues, consumer expenditures) and non-market impacts (GHGE, biodiversity, nutrition) across various scenarios, including the levers implemented individually and jointly.

The study's simulation results show that jointly implementing the three EGD levers significantly improves the environmental performance of the European food system. Specifically: * **Greenhouse gas emissions (GHGE):** Joint implementation of the three levers leads to a reduction of around 20% in GHGE of food consumption compared to the base year. * **Biodiversity damage:** A reduction of approximately 40-50% in biodiversity damage is observed when the three levers are used together. * **Nutritional indicators:** Only the dietary shift lever ('Anim-' and 'Anim-Plant+') significantly impacts nutritional indicators, leading to decreased animal protein consumption and improvements in the ratio of plant proteins to total proteins. The 'Anim-Plant+' scenario, however, increases total calorie, fat, and carbohydrate intake. * **Economic impacts:** Consumers benefit economically from lower food expenditures under joint implementation. Livestock producers experience losses due to quantity and price declines. The impact on field crop producers is positive in scenarios where the increased demand for plant-based food outweighs the decreased demand for animal feed. * **Agricultural land use:** The 'agro-ecology' lever leads to a total farmland expansion, mostly from forests, to accommodate increased high-diversity landscape features. Other scenarios also show land reallocation among different land uses. * **Trade:** The agro-ecology lever increases net imports of plant products. Reducing food losses and shifting diets impact trade favorably, reducing net imports of plant products and increasing net exports of animal products, leading to lower associated emissions and biodiversity damage. The individual levers' impacts are analyzed separately as well. The 'agro-ecology' lever increases producer revenues and consumer expenditures. The 'food losses' lever reduces both consumer expenditures and producer revenues. The 'Anim-' lever negatively affects livestock producers and leads to significant improvements in nutritional indicators. The 'Anim-Plant+' lever positively impacts plant producers and demonstrates less environmental impact than 'Anim-' but less nutritional improvement.

The findings demonstrate that the EGD's three levers, when implemented jointly, can effectively improve the sustainability of the European food system. The substantial reductions in GHGE and biodiversity damage highlight the synergistic effects of these policy interventions. However, the uneven economic impacts emphasize the need for policy mechanisms to support livestock producers facing revenue declines. The importance of considering price transmission from producers to consumers is also evident. The study underscores the need for targeted policies to incentivize the adoption of agro-ecological practices and dietary shifts. The nutritional implications of dietary changes highlight the need for further research to balance environmental sustainability with nutritional goals, potentially by focusing on protein-dense plant products and reducing energy-dense ones.

This study shows that a combined approach, including agro-ecological practices, reduced food losses, and dietary shifts, can significantly enhance the sustainability of the European food system. While consumers generally benefit, support for livestock producers is critical. Future research should focus on refining the model, including a broader range of food products and explicitly modeling policy instruments. Further analysis could explore the optimal mix of policy tools to achieve sustainable and healthy food systems while ensuring equitable economic outcomes.

The model's simplification using three aggregated food products limits the granularity of the analysis. The exclusion of fruits and vegetables restricts the assessment of healthier diets. The assumption of constant margins between producer and consumer prices may affect the accuracy of economic impact estimates. The analysis does not consider the impacts on production costs or consumer welfare in detail. Additionally, the study assumes spontaneous changes in consumer preferences and doesn't model specific policy instruments to achieve the desired shifts.