Toward a more consistent combined approach of reduction targets and climate policy regulations: The illustrative case of a meat tax in Denmark

In this paper we discuss how targets, policy instruments and accounting frameworks for greenhouse gas (GHG) reduction need to be complemented and aligned, to achieve a more effective road to reduce the GHG emission. We focus on gaps in the policy framework presently adopted by countries that are parties to the UNFCCC, using as illustrative case study the meat tax recently proposed in Denmark. We argue that when the GHG reduction targets for individual countries are based on a territorial approach alone (such as in the UNFCCC framework), i.e. sum of emissions from production inside the country, whether or not consumed inside or outside the country, policy regulations directed at consumption, such as a meat tax, may not effectively target the national GHG reduction obligations, and thereby they may not be sufficiently attractive to governments. In particular, emissions derived from internationally traded goods are insufficiently targeted by territorially oriented policy frameworks because a country might reduce the consumption of an imported good without contributing to the national GHG emission reduction target. If consumption-based reduction targets were implemented, a reduction of GHG emissions due to a reduction of the national demand of meat would be revealed irrespective of whether the GHG emission reduction results from a decrease of domestic or foreign demand of meat. The paper also discusses the importance of the methodological approach to accounting GHG emissions at the country level. We argue that to reveal the effect of policy instruments such as a meat tax, on GHG emissions reduced, an alternative consumption-based accounting could favorably complement the traditional GHG accounting.