Meat tax ‘inevitable’ to beat climate and health crises, says report

‘Sin taxes’ to reverse the rapid global growth in meat eating are likely in five to 10 years, according to a report for investors managing over $4tn

“Sin taxes” on meat to reduce its huge impact on climate change and human health look inevitable, according to analysts for investors managing more than $4tn of assets.

The global livestock industry causes 15% of all global greenhouse gas emissions and meat consumption is rising around the world, but dangerous climate change cannot be avoided unless this is radically curbed. Furthermore, many people already eat far too much meat, seriously damaging their health and incurring huge costs. Livestock also drive other problems, such as water pollution and antibiotic resistance.

A new analysis from the investor network Farm Animal Investment Risk and Return (Fairr) Initiative argues that meat is therefore now following the same path as tobacco, carbon emissions and sugar towards a sin tax, a levy on harmful products to cut consumption. Meat taxes have already been discussed in parliaments in Germany, Denmark and Sweden, the analysis points out, and China’s government has cut its recommended maximum meat consumption by 45% in 2016.

“If policymakers are to cover the true cost of human epidemics like obesity, diabetes and cancer, and livestock epidemics like avian flu, 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,” said Jeremy Coller, the founder of Fairr and the chief investment officer at the private equity firm Coller Capital. “Far-sighted investors should plan ahead for this day.”

Maria Lettini, director of Fairr, said: “As implementation of the Paris climate agreement progresses we’re highly likely to see government action to reduce the environmental impact of the global livestock sector. On the current pathway we may well see some form of meat tax emerge within five to 10 years.”

Nations begin to implement sin taxes as consensus forms over the harm caused by the product, the analysis notes, and today more than 180 jurisdictions tax tobacco, more than 60 tax carbon emissions, and at least 25 tax sugar.

The first global analysis of meat taxesdone in 2016 found levies of 40% on beef, 20% on dairy products and 8.5% on chicken would save half a million lives a year and slash climate warming emissions. Proposals in Denmark suggested a tax of $2.70 per kilogram of meat.

Meat taxes are often seen as politically impossible but research by Chatham House in 2015 found they are far less unpalatable to consumers than governments think. It showed people expect governments to lead action on issues that are for the global good, but that awareness of the damage caused by the livestock industry is low. Using meat tax revenues to subsidise healthy foods is one idea touted to reduce opposition.

“It’s only a matter of time before agriculture becomes the focus of serious climate policy,” said Rob Bailey at Chatham House. “The public health case will likely strengthen government resolve, as we have seen with coal and diesel. It’s hard to imagine concerted action to tax meat today, but over the course of the next 10 to 20 years, I would expect to see meat taxes accumulate.”

Marco Springmann, at the Oxford Martin Programme on the Future of Food at the University of Oxford, said: “Current levels of meat consumption are not healthy or sustainable. The costs associated with each of those impacts could approach the trillions in the future. Taxing meat could be a first and important step.”

The need for a high meat tax could be reduced if breakthrough technologies emerge to drastically cut the emissions from livestock, said Lettini, but none exist today. Another, more promising option is the nascent but fast-growing industry in plant-based meat alternatives, such as the meat-free Impossible burger. Bill Gates has invested, and major meat and dairy companies are now piling in with investments and acquisitions.

“There are huge opportunities in the market,” said Lettini. “If we can start replacing meat protein with plant-based protein that has the same look, taste and feel as meat, where real red-blooded meat eaters are happy to dig into a burger that is plant-based, we are changing the world.”