Global Analysis of the Effects of a GHG Food Tax on GHG Emissions and Human Health

By ambitiously modelling the intricate relationships between the agricultural, economic, environmental and health aspects of the global food system, the authors produce forecasts of the effects of an emissions derived food tax on agricultural emissions and global health. Tax levels adopted in the study are designed to internalise all the climate related costs of food consumption. For 18 food groups, the appropriate tax level in a country is calculated using commodity and location specific emissions factors and an emissions price of $52 tCO₂e⁻¹ w. These price adjustments are fed into the framework which predicts emissions reductions and health impacts in each country in the year 2020. The health impacts are calculated using a comparative risk assessment framework, that relates dietary and weight related risk factors to disease states that include, heart disease, type 2 diabetes and cancer.

The initial analysis looks at the effects of levying weighted GHG taxes on all food commodities. In this regime, global food related GHG emissions are reduced by 1.0 GtCO₂ (9.3%), roughly two-thirds these are from reductions in beef consumption and a quarter due to reduced milk consumption. Health benefits from reductions in obesity outweigh the health losses from increased numbers of underweight people in three-quarters of all regions, and tax-related reductions in red meat consumption confer benefits which outweigh health losses from reductions in other food groups. The model predicts that this would result  in a net 107,000 avoided deaths globally in the year 2020.

An analysis of an alternative regime where health critical foods are exempt from the tax produces a forecast with magnified health benefits but marginally weaker emissions reductions. Several other subtle variations that aim to address concerns of food and nutrition security are also explored, including one which allows each region to adopt the tax scenario which maximised their health benefits. In this regime, global food related emissions are still reduced by 8.6%.

The study demonstrates that a GHG tax on foods could be a powerful fiscal policy measure, not only in effort to reduce global GHG emissions, but also in affecting health improvements worldwide. The authors stress the need to carefully tune any tax system so that nations at all levels of development benefit from the potential health and nutritional gains. They encourage further research to refine the agricultural, economic, health and environmental relationships in the models.

Abstract

The projected rise in food-related greenhouse gas emissions could seriously impede efforts to limit global warming to acceptable levels. Despite that, food production and consumption have long been excluded from climate policies, in part due to concerns about the potential impact on food security. Using a coupled agriculture and health modelling framework, we show that the global climate change mitigation potential of emissions pricing of food commodities could be substantial, and that levying greenhouse gas taxes on food commodities could, if appropriately designed, be a health-promoting climate policy in high-income countries, as well as in most low- and middle-income countries. Sparing food groups known to be beneficial for health from taxation, selectively compensating for income losses associated with tax-related price increases, and using a portion of tax revenues for health promotion are potential policy options that could help avert most of the negative health impacts experienced by vulnerable groups, whilst still promoting changes towards diets which are more environmentally sustainable.

Reference

Springmann, M., Mason-D’Croz, D., Robinson, S., Wiebe, K., Godfray, H.C.J., Rayner, M. and Scarborough, P. (2016). Mitigation potential and global health impacts from emissions pricing of food commodities. Nature Climate Change, 7, 69–74 (2017) DOI:10.1038/nclimate3155

Read the full article here.

Using taxes to address the health and climate impacts of food consumption is a rapidly developing area of research. Read about the limitations of health taxes on foods and beverages in addressing obesity here. Find out more about the impacts of emissions-based food taxes on equity, nutrition, and climate mitigation here.

Find all of the food tax studies and reports that we have previously covered here.