Assessing the distributional effects of carbon taxes on food: inequalities and nutritional insights

A carbon tax on food could contribute to emissions mitigation and act as a strong signal to economic actors. However, tax regressivity is a major disadvantage. This article addresses equity issues by several means. First, this article includes reallocation proposals in a revenue-neutral approach of several emission-based carbon taxation scenarios at the consumption level on food. Second, this article develops these proposals’ distributional incidence, and it evaluates the role of carbon pricing in policy impacts. With a carbon-based approach, the differing emission potentials of food groups highlight the relevance of using proteins as a tax base to redirect animal to plant sources in the diet. Thus, a scenario taxing foods rich in animal proteins and subsidizing plant proteins ones is built. Scanner data on French households in 2010 are analyzed. Several GHG emissions indicators and related nutritional impacts, such as diet quality scores and the shift from animal to plant proteins, are evaluated. Using individual changes in food expenditure, distributional effects based on continuous distribution and inequality indexes are measured, allowing the discussion of the policy options of a targeted vs nontargeted tax and a revenue-neutral approach in the food sector.