Tax Meat Now to Save the World, Researchers Suggest
What’s the “social cost” of the meat or dairy you produce?
According to a recent article published on the University of Chicago Press Journal, meat is underpriced—but not in the way producers might hope.
The article suggests that meat consumption should be taxed in high-income countries to pay for the social costs of meat production. These social costs include the “negative environmental externalities and health effects of meat” that might be decreased by taxation at the retail level.
This idea comes as a “second-best alternative” to regulation at the farm-level, due to the challenge of implementing and monitoring policies. Additionally, the writers believe, “cost-effective production-side measures to align industrial livestock farming with environmental goals are likely limited.”
Therefore, the article suggests, “the strategy of targeting meat (or possibly meat and dairy) as a high-polluting food category is supported by environmental research.”
The writers of the article claim to assess the public, behavioral and welfare economics that motivate regulatory efforts to tax meat in their study, including:
• the interaction of multiple environmental externalities
• alternative protein technologies
• the adverse effects of meat consumption on one’s own health (health internality)
• animal welfare
• distributional effects
According to the article, the main environmental externalities from livestock farming are climate change, nutrient and air pollution and biodiversity loss.
These environmental externalities equate to the following total costs suggested to be added to the current retail price of each meat:
• $2.61 to $4.16 per pound for beef (depending on the amount of dairy by-products)
• $1.68 per pound for lamb and mutton
• $0.88 per pound for pork
• $0.68 per pound for poultry
These added costs would increase the cost of meat by 20 to 60 percent, depending on the type.
A Fast Company article referring to the same research notes, “Making meat relatively more expensive would most likely encourage people to spend their money elsewhere,” highlighting plant-based meat as an alternative for consumers.
Additionally, the Chicago Journal article notes that meat taxes differ from other environmental taxes, such as fuel taxes, as there is an immediate substitution for traditional meat products.
While the tax would not necessarily be directed at producers, the proposed meat tax instead applies to any firm selling meat, including restaurants and supermarkets, raising the cost of meat products for all consumers.
Both articles refer to this meat tax as a way for consumers to decrease “diet-related health consequences of meat consumption” and “reduce their intake of animal products.”
The Chicago Journal writers compare animal-based products with other “threats to public health” including tobacco and alcohol, as a logical addition to taxed goods.
They also believe a meat tax could help improve animal welfare, as consumers might become more aware of livestock production.
While the amount or optimal level of taxation is not clearly defined by the Chicago Journal writers, they explain the importance of using taxation levels that might actually reduce the demand for meat.
Where might the tax revenue be used?
For livestock producers, the writers suggest a meat tax could create additional revenue to compensate and incentivize the switch to more “sustainable” crops and farming practices. Additionally, Fast Company suggests using the revenue to cut value-added taxes on fruit, vegetables and grains.
The writers admit there is more research to be done to “improve both our understanding of the economic damages from animal agriculture and the design of optimal meat taxes.” However, they believe “the external costs from livestock-related environmental damages and health effects are significant, and these costs have remained largely unaddressed by fiscal policy.”