December 29, 2017

Climate tax on meat? It's an 'increasing probability', says report

Taxing meat in the same way many governments now tax sugar, carbon and tobacco is becoming "increasingly probable", according to a report produced by investor network FAIRR (Farm Animal Investment Risk & Return), an initiative supported by investors managing over $4 trillion of assets.

The report or policy white paper, entitled "The Livestock Levy", said the imposition of a so-called sin tax on meat product is increasingly likely if countries are to fulfill their commitments to the Paris Agreement, which deals with greenhouse gas emissions mitigation.

It said some countries including Denmark and Sweden have already debated a meat tax.  

The report finds that meat is on the same path that led sugar, carbon and tobacco to become the target of stand-alone taxes. "The pathway is driven by a global consensus around meat's negative contributions to climate change and global health epidemics such as obesity, cancer and antibiotic resistance", it said.

It cited a research by the Food and Agriculture Organisation (FAO) that found that the livestock industry is responsible for 14.5% of global greenhouse gas emissions. It added that the World Health Organisation (WHO) has ranked processed meats as a cause of cancer.

Jeremy Coller, chief information officer of Coller Capital and founder of FAIRR, which is a Coller initiative, said, "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".

The report suggested that companies consider adopting an internal "shadow price" of meat to account for future costs, in the same way many use internal carbon pricing.

While it is mum on the likely cost of a meat tax might be, the report does point to proposals in Denmark that suggested a figure of around $2.7 per kilogramme of meat. --Rick Alberto