Expect a Meat Tax Within 5-10 Years

CC BY 2.0. ruocaled

An investor network managing $4 trillion in assets has warned investors that they should prepare for the inevitable -- a climate-driven "sin" tax on meat.

Taxing items that are seen as unhealthy or damaging to the environment is a common way for governments to raise money. Over 180 jurisdictions tax tobacco, more than 60 tax carbon emissions, and 25 tax sugar. Now, it looks as though meat might be the next target for governments wanting to get serious about climate change.

A new policy White Paper from the Farm Animal Investment Risk and Return (FAIRR) Initiative suggests that meat is following the same path as tobacco, carbon, and sugar, and that the industry should expect to see a behavioral tax levied by many governments by 2050. The paper, titled "The Livestock Levy," is a warning to investors, and considering that FAIRR is an investor network that manages more than $4 trillion in assets, it will likely be taken seriously.

"Sin" taxes, as they're also called, are used to reduce harmful consumption levels and, when it comes to meat, there are a number of reasons why this would be wise.

Global meat production is responsible for 15 percent of carbon emissions (more than the entire transportation sector). It is tied to deforestation and soil degradation, to contamination and excessive use of water supplies, to increasing antibiotic resistance, and to higher rates of Type 2 diabetes, obesity, and cancer. While meat can be healthy when eaten in small, high-quality quantities, the way in which most is currently produced and consumed is neither healthy nor sustainable.

Jeremy Coller, founder of the FAIRR Initiative, said in a press release:

"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. 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.” (via The Guardian)

The news doesn't come as a complete surprise. Meat taxes have already been debated in Denmark, Sweden, and Germany. Other nations have shifted their views on meat consumption, with China cuttings its recommended maximum by 45 percent in 2016.

the livestock levy

© FAIRR -- image from "The Livestock Levy" white paper

The paper includes the suggestion of an internal "shadow price," similar to a carbon tax, meant to account for future costs related to the product's effects. From the press release: "The scope of the report does not cover what the likely cost of a meat tax might be, but does point to proposals in Denmark that suggested a figure of approximately $2.70 per kilogram of meat."

Research from the University of Oxford says that, if the world switched to a plant-based diet, "around $1.6 trillion would be saved in health and environmental costs by 2050, [and] $600 billion in climate damages and $1 trillion in healthcare expenses associated with treating diet-related chronic diseases" would be avoided. A vegan world is a near-impossibility to imagine, but when these numbers are paired with the knowledge that, unless carbon emissions are slashed, we'll exceed the 2-degree Celsius global warming limit, it's reasonable to think that more people will be willing to replace at least some meat in their diets with plant-based substitutes.

The Guardian cites Rob Bailey of Chatham House, a UK-based international affairs think tank that has probed into this question of meat taxes and found 12 surveyed countries to be amenable to the idea:

"It’s only a matter of time before agriculture becomes the focus of serious climate policy. 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."