Rationale goes something like this: it takes more water, grain, and other resources to produce a pound of meat then it does a pound of grain, thus if we all ate only meat we could feed more people while exploiting fewer resources. This is also related to the current agro-business model of livestock production which is more resources intensive then the more humane tradition forms of free range grazing. The link below contains more details about this dilemma.
Factory farming is the single most polluting industry. By not supporting it (or supporting it very minimally), that energy is saved. This accumulates more and more the longer you are vegetarian. On top of that, many vegetarians tend to eat primarily organic foods, which also contributes to energy saving for the same reason.
My answer is a summary of an awesome article, the link to which is below and I please urge you to visit.
1: Deforestation. Much land is required to raise cattle and grow crops to feed them. This is thought to be the main reason for deforestation. Reduction of rain forests means reduction of bio-diversity and can lead to extinction.
2: Air pollution. There are three main greenhouse gases are carbon dioxide, methane and and nitrogen oxide. To clear forests for grazing or crops, it is burned and carbon dioxide is released into the atmosphere. Livestock also a big contributor to methane emissions.
3: Water consumption. 12,000 gallons of water are used for ONE POUND of beef (1 pound of wheat requires 25). The best part is water for livestock is subsidize so companies do not have any reason not to waste water, which many people do not have access to.
4: Fossil-Fuels. A gallon of gasoline is needed for every pound of grain-fed beef.
5: Food. 70 – 80% of grain in US is used to feed livestocj and 38% of grain in the world feeds livestock. The amount of grain to make one pound of beef can feed many people. I believe meat production is a big contributor to world hunger.
The next couple of points are from the second link provided by natural resources defense council. Also, please visit their website.
6: Water pollution effects people. Livestock greatly contribute to nitrate pollution, which has caused (or been a part of) spontanious abortions and an increased risk of methemoglobinemia (blue-baby syndrome). Animal waste also has pathogens and more than 40 diseases can be transfered to humans through manure.
7: Health industry: 29 million pounds of antibiotics are required to be added to animal feed for profit, which then traslates to resistant bacteria, costing more research and drug development.
8: Water pollution, Fish and ecology. Animal manure spills have been proven to be the cause of fish deaths and dead zones.
“North America’s addiction to fast food hamburgers is a major contributor to deforestation and global warming.”
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