Meat tax ‘looks inevitable’ research warns

The meat industry has once again been on the receiving end of bad press, this time in the form of an “increasingly probable” meat tax. 

According to investor network Farm Animal Investment Risk & Return (FAIRR), the driving factors behind this alleged impending tax are the industry’s impact on the environment, coupled with health concerns.

The report indicated that the Paris Agreement could lead to some governments implementing a meat tax, in a similar fashion to the way it is enforced on sugar, carbon and tobacco. Denmark and Sweden have already debated the introduction of a meat tax.

FAIRR’s White Paper – The Livestock Levy – highlighted that there was increasing evidence that a ‘behavioural (or sin) tax’ would be commonplace if countries were to fulfil their commitment to the Paris Agreement.

The report claimed that meat was on a similar path that led to a tax on sugar, carbon and tobacco. A 2015 report from the World Health Organization claimed that over-consumption of processed meat could result in cancer, while research from the Food and Agriculture Organization (FAO) reported that the livestock industry was responsible for 14.5% of global greenhouse gas emissions. 

“Behavioural taxes are increasingly common,” explained Jeremy Coller, CIO of Coller Capital and founder of the FAIRR Initiative. “That’s why we’ve seen 16 countries adopt a sugar tax in recent years.

“The damage the meat industry causes to our health and environment make it very exposed to similar levies, and it is increasingly probable we’ll see meat taxes become a reality. Countries such as Sweden and Denmark have already looked at meat tax proposals. The continued subsidisation of meat is the antithesis of what’s needed, as policymakers and countries gear up to deliver on Paris. Far-sighted investors should plan ahead for this day.”

FAIRR’s report suggested that investors should consider a ‘shadow price’ of meat to account for future costs. Although it is not clear what the total cost of a meat tax might be, the report cited proposals in Denmark, suggesting a number approximately equating to $2.70 per kilogram of meat.

“If policymakers are to cover the true cost of livestock epidemics like avian flu and human epidemics like obesity, diabetes and cancer, while also tackling the twin challenges of climate change and antibiotic resistance, then a shift from subsidisation to taxation of the meat industry looks inevitable,” continued Coller.

Referencing research from the University of Oxford, the FAIRR report said that if animal proteins were cut completely from global diets, around $1.6 trillion would be saved in health and environmental costs by 2050. Meanwhile, a shift towards a nutritionally balanced plant-based diet by 2050 would avoid $600 billion in climate damages, and a further $1 trillion in healthcare expenses related to treating dietary chronic diseases.

“Current levels of meat consumption are not healthy or sustainable,” said Dr Marco Springmann, senior researcher on environmental sustainability and public health at the Oxford Martin Programme on the Future of Food and the University of Oxford.

“They lead to high emissions of greenhouse gases that threaten to jeopardise existing climate commitments, as well as to large numbers of avoidable deaths from chronic diseases, such as colorectal cancer and type-2 diabetes.

“The costs associated with each of those impacts could approach the trillions in the future. Taxing meat for environmental or health purposes could be a first and important step in addressing these twin challenges, and it would send a strong signal that dietary change towards more healthy and sustainable plant-based diets is urgently needed to preserve both our health and the environment.” 

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