Effects of climate tax on food including recycling of the income

Last changed: 04 May 2020

The production of food is causing significant environmental impact both in Sweden and globally. Possibilities to reduce impacts by improving production are limited why consumption side mitigation options are necessary to reduce the impacts. Informative policy instruments have been shown to have limited ability to influence consumer behaviour why more effective instruments such as taxes are necessary to achieve major reductions in impacts

Period

2016-2020

Description

The production of food is causing significant environmental impact both in Sweden and globally. Possibilities to reduce impacts by improving production are limited why consumption side mitigation options are necessary to reduce the impacts. Informative policy instruments have been shown to have limited ability to influence consumer behaviour why more effective instruments such as taxes are necessary to achieve major reductions in impacts. The project aims to increase knowledge of how such instruments can be designed and what effects they have. The project will start with a workshop with researchers, decision makers and other stakeholders involved in or affected by a food tax, in which previous research, ideas and concerns as regards financial policy to lower food’s negative impacts will be discussed and mapped. Based on this, a number of proposals of a tax based on food's climate impact will be designed. This is done in an interdisciplinary research team consisting of experts in climate calculations of food and environmental economics. Unlike previous research of the taxation of food this project will include effects on the consumption of all kinds of food and not only animal products.

Funding

Naturvårdsverket

Project leader

Elin Röös

Members

Emma Moberg, doktorand, Institutionen för energi och teknik, Sarah Säll och Ing-Marie Gren, Institutionen för ekonomi, Julius Andersson, London School of Economics and Political Science

Publications

Moberg E, Karlsson Potter H, Wood A, Hansson PA, Röös E (2020) Benchmarking the Swedish Diet Relative to Global and National Environmental Targets—Identification of Indicator Limitations and Data Gaps. Sustainability 12,  1407. https://doi.org/10.3390/su12041407

Moberg E, Walker Andersson M, Säll S, Hansson P-A, Röös, E (2019) Determining the climate impact of food for use in a climate tax – design of a consistent and transparent model. The International Journal of Life Cycle Assessment https://doi.org/10.1007/s11367-019-01597-8

Gren IM, Moberg E, Säll S, Röös E (2018) Design of a climate tax on food consumption: examples of tomatoes and beef in Sweden. Journal of Cleaner Production, 211: 1576-1585. https://doi.org/10.1016/j.jclepro.2018.11.238

Facts:

The reduction in greenhouse gas emissions and the tax revenues is calculated based on how the tax affects consumer demand for different foods. The study will also analyse

1) the distribution effects (how the tax affects high and low-income groups),

2) changes in nutrient intake,

3) the impact on the profitability of Swedish farms and

4) other environmental effects of the tax (acidification, eutrophication, biodiversity etc.). It is further investigated how the revenue from the tax can be used to counteract negative effects of the tax e.g. by supporting the preservation of pastures if the tax leads to a decrease in the domestic production of beef. Finally, the cost of changing food consumption is compared with other climate mitigation measures, such as reductions in fossil fuels.

Contact