Should food with ‘heavy environmental impact’ be taxed?

By Flora Southey

- Last updated on GMT

In the UKHACC's latest report, it highlights the role food production and land management plays in climate change / Pic: GettyImages/PamWalker68
In the UKHACC's latest report, it highlights the role food production and land management plays in climate change / Pic: GettyImages/PamWalker68

Related tags Carbon footprint Sustainability Beef Dairy

The UK Government is being urged to tax food producers according to the carbon footprint of their products, raising concerns that this cost would be passed onto consumers.

The UK Health Alliance on Climate Change (UKHACC) is calling on the Government to tax food with heavy environmental impact by 2025, unless industry acts voluntarily.

The alliance is made up of UK health professionals from 10 Royal Colleges of medicine and nursing, the British Medical Association, and the Lancet.

In its report published yesterday (4 November), ‘All-Consuming: Building a healthier food system for people and planet’, the UKHACC highlighted the role food production and land management plays in climate change.

Agriculture has a significant impact on the planet’s ability to capture and sequester atmospheric carbon, noted the coalition. “In particular, red meat consumption will need to be cut by half if the food system is to stay within environmental limits.”

The UKHACC argued that changing consumer diets will not only mitigate climate change, but will also improve population health, pointing to ‘clear evidence’ that replacing animal protein with plant-based protein results in reduced health risks, including lower rates of stroke and heart disease.

“If we are to hope to limit dangerous climate change and improve health outcomes, governments – including our own – will have to do far more to improve the sustainability of the food that we eat.”

Pushing for a carbon tax on food

Amongst the UKHACC’s recommendations to Government, which include mandatory environmental labelling for food and prohibiting ‘buy-one-get-one-free’ promotions for unhealthy and perishable products, the coalition is calling for a food carbon tax.

beef dairy Rimma_Bondarenko
The UKHACC is urging Government to implement a carbon tax on food products with high carbon footprints, such as beef and dairy / Pic: GettyImages/Rimma_Bondarenko

“Fiscal incentives have proven effective in changing behaviour and the so-called ‘sugar tax’ demonstrates that it is possible to develop such mechanisms in relation to food,”​ noted the group of health professionals.

Indeed, earlier this year an Oxford University study found that the total amount of sugar sold in soft drinks in the UK dropped by 29%​ in the lead up to the levy’s implementation in 2018.

If voluntary action on the ‘full climate impact of food products’ is not taken by the food industry by 2025, the UKHACC argued a food carbon tax be levied ‘on all food producers according to the carbon footprint of their products’.

Noting that the implementation of such taxes ‘takes time’, the report urged Government to signal its intention to ‘move in this direction’. Concerning the levy itself, the UKHACC proposed that “the work done on modelling foot-printing to support mandatory food labelling will be important in establishing the basis for the levy”.

‘It isn’t black and white’

Not all in the climate-conscious space are 100% onboard with the UKHACC’s suggestion.

Emilien Hoet, for example, who heads up ClimatePartner UK – a firm that helps companies calculate and reduce carbon emissions – said he doesn’t ‘disagree entirely', but stressed the issue 'isn’t black and white’.

“Any taxation needs to be introduced so to not disproportionately affect those struggling financially,”​ he told FoodNavigator. “This has never been more important, considering the impending economic recession.”

While acknowledging that some foods are indeed ‘high-carbon’, such as meat and dairy, Hoet also drew attention to these foods’ ‘integral and cultural role’ in society. “Asking for cultural change overnight is very different. Especially when vegan substitutes are not yet widely available, nor affordable.”

ClimatePartner’s UK head also stressed that new taxes can be met with strong resistance. In France, for example, a new diesel tax brought in two years ago was ‘perceived as a good idea in theory’, but in reality, the levy affected ‘many impoverished rural areas’ – particularly where people rely on their cars due to the lack of public transportation.

“It led to severe backlash, which formed a wider movement known as the ‘yellow vests’ movement.”

Taking the hit: producers, retailers, or consumers?

A potential carbon tax on food – just like the sugar tax on soft drinks – is designed to incentivise producers to make long-lasting changes.

The UKHACC suggested that the impact of such a tax on UK farmers of changing diets could be reduced by enhancing and accelerating the implementation of the Environmental Land Management scheme, offering subsidies for encouraging biodiversity and afforestation.

“This is now increasingly possible given the UK’s department from the EU and the Common Agricultural Policy,” ​they noted.

Some producers may also look to reduce the impact of a potential climate tax by increasing food prices.

“While the tax should be levied on producers, some may choose to pass on the costs in price rises, rather than reduce their climate impact, and the potential impact on consumers – particularly those on low incomes – should not be underestimated,”​ stressed the coalition.

“Government will need to commission independent research, including a public consultation, to inform the details of a carbon tax and to assess and mitigate potential distributional impacts.”

meat supermarket Natissima
Would consumers end up 'taking the hit' of a climate tax on food? Pic: GettyImages/Natissima

Indeed, this is one of Hoet’s primary concerns. While in theory, some food producers will decide to ‘take a hit’ on the margins, and pass the rest onto their buyers, ClimatePartner’s UK lead suggested this scenario is less likely.

“Retailers may again decide to take a hit or pass on all of this back to the consumer. Considering how razor thin margins are already in this industry, the most likely scenario is that all of the cost will be passed onto consumers.”

An alternative solution?

If consumers are the ‘most likely’ to take the financial burden of a new carbon tax, when the levy is instead designed to target producers, what might be an alternative solution?  

ClimatePartner’s Hoet suggested taxing only imported red meat associated with deforestation as ‘a good place to start’.

“This would mean local, grass-fed beef is more affordable in comparison,” ​he told this publication, referencing Poore & Nemecek’s 2018 study, in which beef was found to have the biggest carbon footprint.

“This would force many of the big fast food chains to make difficult decisions between raising prices and accelerating their transition to beef alternatives. It seems hard to argue that beef burgers are an essential staple, but then again, the consequences of any new tax will need to be heavily monitored and evaluated.”

Another alternative could be to explore government subsidies for more ‘sustainable’ foods, for example foods associated with low-carbon, regenerative farming, or for businesses that aim to replace high carbon foods entirely, said Hoet.

“If Beyond Meat burgers not only tasted just as good as beef burgers but were also cheaper (they are not currently), then the choice is much easier and no longer [available to] of those that can afford it.

“Good policy will most likely involve a mix of both taxation and subsidies, while tailoring to local realities.“

‘Reducing food’s environmental impacts through producers and consumers’
Published 1 June 2018
DOI: 10.1126/science.aaq0216
Authors: J. Poore and T. Nemecek.

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