Food production is responsible for more than 25 percent of all greenhouse gas emissions, the majority of which comes from livestock. Yet agriculture has long been excluded from national plans to reduce greenhouse gas emissions. As it can be challenging to regulate emissions from the food production industry from the supply side, passing on the environmental costs of food production to consumers may be a viable alternative.
This strategy aims to reduce demand for high environmental impact foods while increasing demand for more sustainable (and typically less expensive) food options. A recent article published in Nature climate change suggests that if tax-adjusted food prices are based on the environmental impacts of their production, the environmental costs of agriculture could be significantly reduced. As a bonus, the money from the tax can be used to lower the cost of food that is healthier and more environmentally friendly.
The authors of the paper used an environmental economics analysis of the GHG burden of foods and embedded it in a health modeling framework. They use this analysis to assess the impact of potential changes on major regions of the world, including countries at all stages of economic development. The result is the first global analysis of the environmental and health impacts of a greenhouse gas tax on food.
The authors used a life cycle analysis to quantify the emissions related to food production. To figure out how much environmental tax to put on food, they used an assumed emissions price of $52 per ton of CO2, a cost calculated to match the present value of future climate damage associated with each additional ton of carbon dioxide or equivalent. They also used a global comparative risk assessment framework that took into account five major diseases (coronary heart disease, stroke, diabetes, cancer and other disease risks) and the effect of weight (overweight/normal/underweight).
The authors found that a tax on all food products would result in 146,000 avoided deaths by the year 2020, two-thirds of which would be due to changes in dietary risk. In this model, the authors found that maintaining broad tax coverage — meaning many countries implement the tax — would maximize health benefits, particularly in terms of reductions in overweight and obesity. In addition, this broad tax approach was most beneficial in terms of increasing tax revenue – these taxes could then be used to subsidize fruits and vegetables, promoting the consumption of healthier, less environmentally harmful foods. In that sense, it could be similar to the fee-and-dividend approach that has been proposed for carbon emissions.
The authors expressed concern about possible negative consequences of the tax, such as reduced food availability and safety. They incorporated these potential negative effects into their model and found that if tax plans were tailored to each region, the negative effects could be alleviated and the global health impacts would still be extremely positive.
Overall, these models indicate that introducing a greenhouse gas-based tax on food products would benefit both the environment and human health. Contrary to concerns that it would lead to higher food prices and a reduction in food availability, the authors believe that it could lead to less obesity and other health benefits through a reduction in red meat consumption. So the tax could benefit lower-income people, who are more likely to eat better. In addition, if people eat healthier, countries could save money on medical costs for their citizens.
The analyzes presented in this study focused only on taxes based on greenhouse gas emissions. While the authors considered potential benefits of an environmental tax on food, such as reduced land use and reduced nitrogen pollution in water, they did not consider methane, which is a major by-product of most livestock operations. In addition, the work failed to account for market adjustments because it used a relatively static economic framework, which assumes that the current economic situation will persist.
Still, the study presents a compelling argument that environmental taxes on foods can help both the environment and human health. As we move into a less environmentally sound future, these taxes may be an important option for governments to consider.
Nature climate change2016. DOI: 10.1038/NCLIMATE3155 (About DOIs).