Part of Our EU-27 Green Tax Wiki

Introduction

On January 31st, the True Animal Protein Price (TAPP) Coalition released a report outlining a plan to implement a tax on meat and dairy in Europe. Under this plan, the cost of beef and veal would increase by 47 cents per 100 grams; pork would increase by 36 cents; and chicken would increase by 17 cents. These prices reflect the relative environmental costs of the meat and are expected to lead to a reduction in consumption by 2030 ranging from 30% for chicken, to 67% for beef.^[1] The TAPP Coalition presented its findings to European Parliament in February (2020), urging legislators to implement such a pricing model in order to reflect the true CO₂ costs of foodproducts and incentivize a shift in consumer behavior. TAPP hopes that the EU Parliament will include this tax on meat in the European Commission’s upcoming “Farm to Fork” Strategy, a part of the EU Green Deal legislation focused on increasing the sustainability of Europe’s food system.^[2]

Philip Mansbridge, executive director of ProVeg and a member of the TAPP Coalition, emphatically states: “The time has come for us to act decisively with policy on the environmentalconsequences of animal protein, the price of which has been kept artificially low for far too long. Here we have a solution that is fair for farmers and supports the transition to a more plant-based food system that we so urgently need if we are serious about mitigating climate change.”³

The Problem With Meat and Dairy

A 2018 report in Nature clearly asserts that “the global food system is a major driver of climate change, land-use change and biodiversity loss, depletion of freshwater resources, and pollution of aquatic and terrestrial ecosystems through nitrogen and phosphorus run-off from fertilizer and manure application. It has contributed to the crossing of several of the proposed ‘planetary boundaries’ that attempt to define a safe operating space for humanity on a stable earth system.”^[3] At the moment, Europeans eat roughly 50% more meat than is recommended, and an estimated 80% of all arable land is used for animal feed. Jeroom Remmers, Director of the TAPP Coalition, argues that global meat and dairy consumption at this rate will use the world’s entire greenhouse gas emissions budget by 2050.^[4]

The UN Food and Agriculture Organization (FAO) estimates that the total hidden environmental costs of global food production is $2.3 trillion USD.^[5]^[6] By 2050, the environmental costs associated with present-day food production and greenhouse gas emissions are expected to double, while the Earth’s population increases to 10 billion and meat-rich diets continue to grow.

In August, 2019, the UN Climate Panel IPPC called upon countries to radically change land use and food patterns to shift towards plant-based diets and reduce meat consumption. A “radical change” is needed to fight climate change, realize the climate goals of the Paris Agreement, protect biodiversity, and prevent a food crisis after 2050.

A Lancet report on obesity from January 2019, delineates the ways in which human health would also benefit from reducing meat consumption benefit.^[7] The World Health Organization even classified processed meat as a carcinogenic to humans and labeled all meat as a “probable” carcinogenic. The consumption of meat is therefore directly related to increased mortality from chronic diseases.^[8] Pricing in the health and environmental impacts of meat would encourage healthier and more sustainable diets, simultaneously creating government revenue, while also effectively lowering future health care and environmental damage costs.^[9]

The Policy

TAPP’s proposal outlines a new pricing plan that follows the “Polluter Pays Principle.”^[10] This proposal reflects fiscal reforms to internalize environmental and social externalities of food production through prices; in order to do so, meat prices must rise by 40-100%.^[11] Under this principle, legislators would apply a carbon price to meat and dairy, thereby placing the financial burden on producers and consumers and incentivizing change. The TAPP Coalition’s proposed increase in meat price (ranging from 17-47 cent increase per 100 grams) would lead to an estimated reduction in consumption of 30% for chicken, 47% for pork, and 67% for beef by 2030. The proposal hopes to use the tax revenue to further incentivize and support sustainability; 31-46% of the funds would be spent to help farmers grow in more environmentally friendly ways; 22-36% would be used to lower the VAT of vegetables and fruits; 19% would be used to compensate low-income households who may not be able to afford more expensive animal products; and 12% to be used to support developing countries in the transition to climate-friendly farming practices.^[12]

The Dutch Case

TAPP, a coalition based in the Netherlands, highlights in its proposal a case study from the Dutch experience with a meat tax. Though the tax is still just a proposal, and not solidified legislation, the Netherlands offers an opportunity to look at the potential road ahead for TAPP’s EU effort. The Dutch proposal, like that for the EU, consists of a new excise duty based on the environmental costs of meat, increasing meat price by 40%. The Dutch also hope to include additional payments to farmers based on sustainability performances and reduce VAT rates on vegetables, fruits, and plant-based meat and dairy alternatives. This initiative has been met with broad support from a range of NGOs, professors, scientists, youth organizations, and business leaders. A poll showed that a majority (63%) of the public supported the policy for altering the price of meat, vegetables, and fruit.^[13] The infographic below details the inputs and outputs of the tax.

Role of EU and the European Green Deal

Though it is up to the individual EU member countries to enact and implement taxes, the TAPP coalition hopes that EU Parliament will take action to maintain a level playing field (by preventing “cross border shopping”) in terms of meat taxation. For example, the EU could mandate or facilitate a minimum tax on meat consumption and carbon border tax adjustment mechanisms for imported meat products. Furthermore, a European harmonization of “fair meat” taxes would reduce market disturbances. Lastly, the EU commission must act to reduce subsidies for meat and dairy production in order to properly reflect the “fair meat price.”^[14]

The TAPP Coalition advises that the EU member states start meat pricing in 2022 at 10 euro cent/100 grams of meat, increasing and differentiating (based on type of meat) the tariffs every year up to 2025. From 2025-2030, EU countries should meet the previously specified rates.^[15]

Conclusions: the Future of a European Meat Tax

The environmental problem of the food industry and of meat and dairy consumption is increasingly clear and well-documented. And yet, in 2018 Europeans ate around six times (63.3 kg) the amount of meat deemed sustainable and healthy by the Lancet (10-16 kg). And worse, meat and dairy consumption is growing 1.5% per year, exacerbating related GHG emissions, deforestation, and a myriad of other environmentally destructive problems.^[16] Due to complex societal and political reactions to a food tax, legislators have been weary to implement such policy. However, the EU has also shown to be a leader in other areas of sustainable policy; the TAPP Coalition believes that a well-constructed meat tax like the one proposed can shift behavior, generate valuable revenue, and create a smooth path towards the urgently needed sustainable transition in the global food industry.

Works Cited

“Aligning Food Pricing Policies with European Green Deal.” True Animal Protein Price Coalition, 31 Jan. 2020, www.drive.google.com/file/d/1Nq2aese3kYTtWZAVP0LQGAc_ci3ZC7Ax/view .

Cooper, Rachel. “EU Warned to Implement Sustainability Tax on Meat.” Climate Action, 7 Feb. 2020, www.climateaction.org/news/eu-warned-to-implement-sustainability-tax-on-meat

Keating, Dave. “EU Urged To Put Climate Tax On Meat.” Forbes, Forbes Magazine, 5 Feb. 2020, www.forbes.com/sites/davekeating/2020/02/03/eu-urged-to-put-climate-tax-on-meat

Murray, Trent. “EU Considers Introduction of 'Meat Tax' to Fight Climate Change.” Euronews, 5 Feb. 2020, www.euronews.com/2020/02/05/the-steaks-are-too-high-eu-considers-introduction-of-meat-tax-t o-fight-climate-change

Springmann, M., Clark, M., Mason-D’Croz, D. et al. Options for keeping the food system within environmental limits. Nature 562, 519–525 (2018). https://doi.org/10.1038/s41586-018-0594-0

Notes

[1] Keating, Dave. “EU Urged To Put Climate Tax On Meat.” Forbes, Forbes Magazine, 5 Feb. 2020, www.forbes.com/sites/davekeating/2020/02/03/eu-urged-to-put-climate-tax-on-meat

[2] Ibid.

[3] Springmann, M., Clark, M., Mason-D’Croz, D. et al. Options for keeping the food system within environmental limits. Nature 562, 519–525 (2018). https://doi.org/10.1038/s41586-018-0594-0

[4] Cooper, Rachel. “EU Warned to Implement Sustainability Tax on Meat.” Climate Action, 7 Feb. 2020, http://www.climateaction.org/news/eu-warned-to-implement-sustainability-tax-on-meat.

[5] “Aligning Food Pricing Policies with European Green Deal.” True Animal Protein Price Coalition, 31 Jan. 2020, http://drive.google.com/file/d/1Nq2aese3kYTtWZAVP0LQGAc_ci3ZC7Ax/view, p. 7

[6] Ibid. p. 3

[7] Ibid. p. 3

[8] Ibid. p. 3

[9] Ibid. p. 6

[10] Murray, Trent. “EU Considers Introduction of 'Meat Tax' to Fight Climate Change.” Euronews, 5 Feb. 2020, www.euronews.com/2020/02/05/the-steaks-are-too-high-eu-considers-introduction-of-meat-tax-to-fight-climate-change.

[11] “Aligning Food Pricing Policies with European Green Deal.” p. 8

[12] “Aligning Food Pricing Policies with European Green Deal.”

[13] “Aligning Food Pricing Policies with European Green Deal.” p. 6

[14] “Aligning Food Pricing Policies with European Green Deal.” p. 6

[15] “Aligning Food Pricing Policies with European Green Deal.” p. 19

[16] “Aligning Food Pricing Policies with European Green Deal.” p. 27