The food sector is the weak link in our climate policies, and it’s time to do something about it.
by Hugo Cordeau, Jérôme Larivière. Originally published on Policy Options
July 13, 2023
(Version française disponible ici)
What we put on our plates has a huge impact on the environment. Agriculture, which produces around five per cent of the world’s GHG emissions, could single-handedly cause global temperatures to rise by 1 C by 2100, enough to exceed the objectives of the Paris Agreement. Livestock farming is responsible for a large proportion of this pollution.
In addition to the environment, meat consumption also affects our health. According to the World Health Organization, processed meat consumption is associated with an increased risk of several types of cancer. Meat-rich diets can increase the risk of diseases such as colorectal cancer, stroke and Type 2 diabetes.
In a country like Canada, where the government funds healthcare, this individual problem becomes a collective one.
Unfortunately, where agriculture is concerned, our climate policies lack teeth; they are the Achilles’ heel of the energy transition. For example, the agricultural sector is exempt from the main eco-tax mechanisms, such as carbon pricing. In short, the environmental cost of meat is not included in the price of our food, which creates a market failure.
Taxing meat?
Meat causes a negative externality for society. The intuitive way to deal with this problem would be to impose a tax equivalent to the damage caused, for each type of meat.
For example, the production of ruminant meat (beef, goat, etc.) is significantly more emitting than that of poultry; a tax on meat would reflect this information via the price. The aim of such a policy would not necessarily be a reduction in the quantity of meat consumed – although this would be ideal – but rather a substitution towards less polluting products. The introduction of such a mechanism is an integral part of the decarbonization debate in Europe. In North America, unfortunately, the debate has not even begun.
Several studies have examined the potential impact of a meat tax. Results vary according to the scope of the tax and its magnitude. One study examining the effect of such a tax on all food products estimates that emissions could be reduced by 10 to 20 per cent. On the other hand, another study estimates that, even with a carbon price of 200 euros (around $290) on the consumption of animal products, the reduction in GHGs would be limited to 6 per cent. Taxing only the most polluting products, i.e. ruminant meat, would therefore be more effective and less penalizing for consumers.
This leads to another consideration, that of the effect of a meat tax on the most disadvantaged households. Despite a change in eating habits, recent studies have shown that the impact would be neutral in nutritional terms. However, this observation does not extend to taxation, since such a tax would be regressive: it would affect the less well-off the most. However, this is only true before redistribution.
It would be possible to make the tax fiscally neutral – or even progressive – by combining it with other measures, such as tax credits. This is precisely what Canada is doing with the federal carbon tax; in the province that levies it, 80 per cent of households receive more carbon credits than they pay.
The more fundamental problem with the meat tax is its social acceptability, since it affects a commodity deeply rooted in cultural habits. It would therefore be likely that some people – who support current climate policies – would not appreciate state intervention in their lives.
The introduction of a meat tax should not be taken lightly, as the social acceptability of climate policies requires a delicate balance.
Fortunately, a meat tax is not the only tool at our disposal.
How can we change without taxing more?
The social cost of carbon has reached $250 per tonne, according to the latest federal government report. This means that any policy that can reduce a tonne of carbon for less than $250 is desirable. This opens the door to all kinds of possibilities.
Communication and awareness campaigns addressing the root of the problem – our habits – could represent an effective and socially acceptable approach. For example, content producers could be subsidized to offer tasty recipes with low environmental impact – information asymmetry being another market failure.
In the same vein, subsidizing vegetable proteins or supporting research to develop new, less environmentally damaging meat substitutes could also be considered.
In addition to eco-tax measures, regulations could also be used to encourage more sustainable eating. For example, vegetarian protein options are often absent from restaurant menus, and the price of these options tends to be higher, despite lower ingredient costs. To remedy this situation, regulations could guarantee a sufficient supply of protein-rich vegetarian products (rather like sales quotas for electric cars), while limiting additional costs.
It’s alimentary, my dear Watson
The food environment has been largely overlooked in climate action. It could single-handedly break the Paris Agreement, and it’s dubious to believe that this problem can be solved by technological change alone. It’s a problem that requires a paradigm shift. This paradigm shift would not only be good for the planet; it would also be good for our health and, therefore, our public finances.
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This article first appeared on Policy Options and is republished here under a Creative Commons license.