Effect of GHG taxes on meat consumption

This paper (Wirsenius S, Hedenus F and Mohlin K (2010) 'Greenhouse gas taxes on animal food products: rationale, tax scheme and climate mitigation effects.' Climatic Change DOI 10.1007/s10584-010-9971-x) looks at the potential effect of GHG taxes on animal food product consumption and associated emissions.

Abstract

Agriculture is responsible for 25–30% of global anthropogenic greenhouse gas (GHG) emissions but has thus far been largely exempted from climate
policies. Because of high monitoring costs and comparatively low technical potential for emission reductions in the agricultural sector, output taxes on emission-intensive agricultural goods may be an efficient policy instrument to deal with agricultural GHG emissions.

In this study we assess the emission mitigation potential of GHG weighted consumption taxes on animal food products in the EU. We also estimate the decrease in agricultural land area through the related changes in food production and the additional mitigation potential in devoting this land to bioenergy production. Estimates are based on a model of food consumption and the related land use and GHG emissions in the EU. Results indicate that agricultural emissions in the EU27 can be reduced by approximately 32 million tons of CO₂-eq with a GHG weighted tax on animal food products corresponding to euros 60 per ton CO₂-eq. The effect of the tax is estimated to be six times higher if lignocellulosic crops are grown on the land made available and used to substitute for coal in power generation. Most of the effect of a GHG weighted tax on animal food can be captured by taxing the consumption of ruminant meat alone.

This figure shows reductions in GHG emissions achievable through weighted consumption taxes on animal food equivalent to euros 60 tonne CO₂eq.

For GHG weighted consumption taxes corresponding to C₆0 per ton CO₂-eq, an estimated 11 million hectares of permanent pasture and 4 million hectares of cropland are made available for alternative uses. This can be compared to the total areas of approximately 70 million hectares of permanent pasture and 120 million hectares of cropland in the EU27.

The land no longer required for food production can be put to alternative
use. If the land is used for bioenergy in order to replace fossil fuels,
additional reductions in GHG emissions can be achieved. Six different
bioenergy scenarios were considered.

In the first set of Biofuel for Transport (BfT1) scenarios, wheat-bioethanol
and rapeseed-biodiesel, the net GHG reductions from bioenergy are much
smaller than those in food production; this is due to the relatively high
GHG emissions in the production of these biofuels. Despite its large area,
the use of former permanent pasture for wheat-ethanol and rapeseed-diesel results in almost negligible GHG reductions. This is because of the lower productivity on permanent pasture land but also the high soil carbon losses when ploughing up and converting permanent pastures to cropland, which the relatively low gains from substituting petrol and diesel with wheat-ethanol and rapeseed-diesel can just barely compensate for.

Soil carbon losses are smaller if lignocellulosic crops instead of food
crops are planted on former pasture. The climate benefit from using former pasture for bioenergy is therefore greater in the scenarios in which lignocellulosic crops are used as energy feedstock. In the synthetic diesel case, high process conversion efficiency and low life cycle GHG emissions contribute to GHG reductions far greater than in the other transportation fuel scenarios. The GHG reductions in this scenario exceed the reductions obtained through tax-induced changes in food consumption alone.

In the Biomass for Power and Biomass for Heat scenarios, GHG reductions are much greater than in all other scenarios, and they greatly exceed the direct reductions achieved through tax-induced structural changes in EU agriculture towards less GHG intensive food. The bioenergy reductions are six times higher than the foodrelated reductions, if biomass is assumed to replace coal as fuel in electricity production. Assuming instead that biomass substitutes oil in heat generation reductions are approximately four times higher.

This figure shows the combined, net GHG reductions which would be achieved in six scenarios for GHG weighted consumption taxes corresponding to C₀ per ton CO₂-eq.

Conclusions
This study concludes that consumption taxes on animal food differentiated to the GHG emissions per food unit can be a cost-effective policy to abate agricultural GHG emissions. There are three principal arguments behind this conclusion. First, the costs of monitoring agricultural emissions are very high, which makes the option of using emission taxes at the farm level prohibitively expensive. Second, the potential for reducing agricultural GHG emissions by technical means is limited overall, which means that the only way to drastically cut emissions is to reduce production. Third, there are very large, and most importantly, biologically inherent, differences in GHG emission intensity between different categories of food.

This study estimated the potential for reducing agricultural GHG emissions with GHG weighted consumption taxes on animal food products in the EU. A tax scheme of differentiated consumption taxes on animal food equivalent to C₆0 per ton CO₂-eq is estimated to lower emissions from food production by approximately 32 million tons CO₂-eq, which corresponds to about 7% of current GHG emissions in EU agriculture. Taking into account the possible impact on cattle meat production in regions exporting to the EU, the GHG mitigation effect from the tax scheme is likely to be higher than this. About 80% of the estimated emission reduction is related to a decrease in ruminant (cattle and sheep) meat consumption. This is to a great extent explained by the high GHG emissions per meat unit produced.

The production of ruminant meat also requires very large areas of
agricultural land. GHG weighted consumption taxes would therefore have the additional benefit of making substantial areas of land currently used for feed and pasture available for bioenergy production, which could contribute to additional GHG mitigation. If lignocellulosic bioenergy crops are grown and used to replace coal in power generation, the total emission reductions achieved are estimated to be six times higher than those associated with reductions in food production only. For a tax scheme corresponding to C₆0 per ton CO₂-eq, the combined GHG emission reduction in this case would
amount to about 5% of total current GHG emissions in the EU27.

The article may be found here.
(This is a pay service.)

It is worth considering the above article in conjunction with the Committee on Climate Change commissioned paper.