By Michael Von Massow And John Cranfield
Will taxing meat products based on their carbon footprint reduce greenhouse gas (GHG) emissions and improve public health? The answer is maybe, but not notably —and it will come with significant costs.
A recent study in the journal Nature Climate Change advocates applying taxes to the consumption of meat as a means of lowering GHG emissions.
The idea is that if meat is more expensive, consumers will buy less of it. In turn, when faced with reduced consumption, farmers will produce less cattle.
Not all meat production produces the same volume of emissions. Since cows produce a lot of methane (a greenhouse gas), fewer cows should mean less methane, which in turn should help lower GHG emissions. Pigs and chickens don't spew methane the way cows do, but there are also the emissions associated with feeding them, as well as with the decomposition of manure.
While it's clear we need to proactively reduce GHG emissions globally, we believe the emissions tax approach is unlikely to achieve success.
It will likely increase food prices for consumers and decrease the prices farmers charge for their products, but it's unlikely to lower meat consumption significantly and therefore unlikely to lower GHG emissions from the livestock sector. There may be other detrimental impacts to taxation too.
Price hikes don't usually curb consumption
Food consumption is not as strongly linked to price as one might think. Changes in consumption of food are typically much smaller than changes in the price consumers face in the grocery store. This is a phenomenon that has been recognized and measured for decades.
We would need to implement huge taxes to achieve a small decrease in consumption. As an example, the study in the Nature Climate Change journal suggests a 40 per cent tax on beef would only reduce beef consumption by 15 per cent.
Because taxes on food at the retail level tend to raise the prices paid by consumers, it's also worth noting that any increase in the price of meat would tend to affect low-income consumers more than more affluent consumers. Low-income consumers would pay relatively more than the rich.
We also need to consider substitution effects. While a high tax on beef and other meats will lower beef consumption somewhat, it may also lead to economizing by consumers through increased consumption of lower quality or more highly processed cuts of meat.
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