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Design of climate tax on food consumption

Listed author(s):
  • Gren, Ing-Marie

    ()

    (Department of Economics, Swedish University of Agricultural Sciences)

  • Moberg, Emma

    (Department of Energy and Technology)

  • Röös, Elin

    (Department of Energy and Technology)

  • Säll, Sarah

    (Department of Economics, Swedish University of Agricultural Sciences)

  • Andersson, Julius

    (London School of Economics)

This study examines appropriate design of climate taxes on consumption of food by constructing a simple theoretical model and exemplify the results on climate taxes on consumption of tomatoes and beef in Sweden. The theoretical results showed that i) existing taxes on greenhouse gases (GHG) should be considered to avoid double taxation, ii) taxes need to be differentiated between GHG (carbon dioxide, CO2, methane, CH4, and nitrous oxide, N2O, in present study) because of their different climate impact, and iii) suggested tax levels on GHG in the literature rest on quite different approaches to climate management. The calculations of climate taxes on tomatoes and beef in Sweden indicated considerable differences in the tax level depending on calculation method. The commonly applied suggestion of taxing carbon dioxide equivalents (CO2e) and disregard existing taxes on GHG emission results in a tax that is five times the appropriate tax for tomatoes and 2.5 times that for beef. The price increases on consumption of food due to a climate tax can thus show large variation depending on tax calculation method.

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Paper provided by Department Economics, Swedish University of Agricultural Sciences in its series Working Paper Series with number 2017:2.

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Length: 35 pages
Date of creation: 02 Jul 2017
Handle: RePEc:hhs:slueko:2017_002
Contact details of provider: Postal:
Department of Economics, Box 7013, Swedish University of Agricultural Sciences, SE-750 07 Uppsala, Sweden

Phone: 018-67 1724
Fax: 018-67 3502
Web page: http://www.slu.se/ekonomi

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