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The effect of using consumption taxes on foods to promote climate friendly diets – The case of Denmark

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  • Edjabou, Louise Dyhr
  • Smed, Sinne

Abstract

Agriculture is responsible for 17–35% of global anthropogenic greenhouse gas emissions with livestock production contributing by approximately 18–22% of global emissions. Due to high monitoring costs and low technical potential for emission reductions, a tax on consumption may be a more efficient policy instrument to decrease emissions from agriculture than a tax based directly on emissions from production. In this study, we look at the effect of internalising the social costs of greenhouse gas emissions through a tax based on CO2 equivalents for 23 different foods. Furthermore, we compare the loss in consumer surplus and the changed dietary composition for different taxation scenarios. In the most efficient scenario, we find a decrease in the carbon footprint from foods for an average household of 2.3–8.8% at a cost of 0.15–1.73DKK per kg CO2 equivalent whereas the most effective scenario led to a decrease in the carbon footprint of 10.4–19.4%, but at a cost of 3.53–6.90DKK per kg CO2 equivalent. The derived consequences for health show that scenarios where consumers are not compensated for the increase in taxation level lead to a decrease in the total daily amount of kJ consumed, whereas scenarios where the consumers are compensated lead to an increase. Most scenarios lead to a decrease in the consumption of saturated fat. Compensated scenarios leads to an increase in the consumption of added sugar, whereas uncompensated scenarios lead to almost no change or a decrease. Generally, the results show a low cost potential for using consumption taxes to promote climate friendly diets.

Suggested Citation

  • Edjabou, Louise Dyhr & Smed, Sinne, 2013. "The effect of using consumption taxes on foods to promote climate friendly diets – The case of Denmark," Food Policy, Elsevier, vol. 39(C), pages 84-96.
  • Handle: RePEc:eee:jfpoli:v:39:y:2013:i:c:p:84-96
    DOI: 10.1016/j.foodpol.2012.12.004
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    References listed on IDEAS

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    Cited by:

    1. Bryngelsson, David & Wirsenius, Stefan & Hedenus, Fredrik & Sonesson, Ulf, 2016. "How can the EU climate targets be met? A combined analysis of technological and demand-side changes in food and agriculture," Food Policy, Elsevier, vol. 59(C), pages 152-164.
    2. Säll, Sarah, 2015. "Distributional effects of environmental meat taxes in Sweden- Can the poor still eat meat?," Working Paper Series 2015:3, Swedish University of Agricultural Sciences, Department Economics.
    3. France, Caillavet & Adélaide, Fadhuile & Véronique, Nichèle, 2014. "Taxing Animal Products: Protein Demand under Environmental Pressure and Social Impact in France," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169974, Agricultural and Applied Economics Association.
    4. Brian J. Revell, 2015. "One Man's Meat … 2050? Ruminations on Future Meat Demand in the Context of Global Warming," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 573-614, September.
    5. White, Robin R. & Brady, Michael, 2014. "Can consumers’ willingness to pay incentivize adoption of environmental impact reducing technologies in meat animal production?," Food Policy, Elsevier, vol. 49(P1), pages 41-49.
    6. Fredrik Hedenus & Stefan Wirsenius & Daniel Johansson, 2014. "The importance of reduced meat and dairy consumption for meeting stringent climate change targets," Climatic Change, Springer, vol. 124(1), pages 79-91, May.
    7. repec:eee:jfpoli:v:74:y:2018:i:c:p:147-153 is not listed on IDEAS
    8. Revell, Brian J., 2015. "One Man’s Meat…. 2050? Ruminations on future meat demand in the context of global warming," 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK 204205, Agricultural Economics Society.
    9. Ariane Kehlbacher & Richard Tiffin & Adam Briggs & Mike Berners-Lee & Peter Scarborough, 2016. "The distributional and nutritional impacts and mitigation potential of emission-based food taxes in the UK," Climatic Change, Springer, vol. 137(1), pages 121-141, July.
    10. Apostolidis, Chrysostomos & McLeay, Fraser, 2016. "Should we stop meating like this? Reducing meat consumption through substitution," Food Policy, Elsevier, vol. 65(C), pages 74-89.
    11. Bonnet, Céline & Bouamra-Mechemache, Zohra & Corre, Tifenn, 2016. "An environmental tax towards more sustainable food consumption: empirical evidence of the French meat and marine food consumption," TSE Working Papers 16-639, Toulouse School of Economics (TSE).
    12. repec:gam:jsusta:v:10:y:2018:i:1:p:134-:d:125926 is not listed on IDEAS
    13. Chalmers, Neil George & Revoredo-Giha, Cesar & Shackley, Simon, 2014. "How prices affect Scottish household demand for milk products and their low carbon alternatives?," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182965, European Association of Agricultural Economists.
    14. Säll, Sarah & Gren, Ing-Marie, 2015. "Effects of an environmental tax on meat and dairy consumption in Sweden," Food Policy, Elsevier, vol. 55(C), pages 41-53.
    15. Caillavet, F. & Fadhuile, A. & Nichele, V., 2015. "An Environmental Fiscal Food Policy: A French Perspective," 2015 Conference, August 9-14, 2015, Milan, Italy 211381, International Association of Agricultural Economists.
    16. repec:eee:ecolec:v:147:y:2018:i:c:p:48-61 is not listed on IDEAS
    17. Hunter, Erik & Röös, Elin, 2016. "Fear of climate change consequences and predictors of intentions to alter meat consumption," Food Policy, Elsevier, vol. 62(C), pages 151-160.
    18. Caillavet, France & Fadhuile, Adelaide & Nichèle, Véronique, 2016. "Hunger for meat: can animal protein-based taxation reverse the trend?," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235982, Agricultural and Applied Economics Association.
    19. Caillavet, France & Fadhuile, Adelaide & Nichèle, Véronique, 2014. "Taxing animal foods for sustainability: environmental, nutritional and social perspectives in France," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182863, European Association of Agricultural Economists.

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