Current food system is an important source of green house gas (GHG) emissions. In Sweden, 20% of total GHG emissions originate from food contributes 20% of total emissions. There exists a wide range of policy approaches to foster a more sustainable food consumption spanning from awareness-raising and education, restrictive legislation and economic incentives including taxation and subsidies. This interdisciplinary project examines the effects of a climate tax on food consumption in Sweden, which includes effects on GHG emissions, distributional effects on different households and the potential of recycling incomes from the tax to the farmers.
The current food system is a main driver of many environmental pressures. The consumption of food is responsible for 20% of total greenhouse gas emissions in Sweden and agriculture causes about half of the emissions of nitrogen and phosphorous to waterways. Further, large amounts of non-renewable energy sources are used in agriculture and in post farm gate activities such as processing, packaging, storing and distribution of food.
There exists a wide range of policy approaches to foster a more sustainable food consumption spanning from awareness-raising and education, restrictive legislation and economic incentives including taxation and subsidies. Although studies show that some eco-labels are well-known by many consumers and that most consumers hold pro-environmental attitudes, sales of eco-labelled food products are still marginal. This phenomenon is well-described in the scientific literature as the attitude-behavior gap and can be explained by taste and price being the most important determinants in food purchases. Another informative policy initiative is dietary guidelines which take into account the environmental pressures of different food products, as do the ones in Sweden, Holland and Brazil. However, evidence is limited as regards the effectiveness of these in changing consumer behavior.
In line with this observation is the conclusion from the Swedish Board of Agriculture who found that voluntary actions by consumers and firms are probably not enough to reach sustainable meat consumption and therefore have to be complemented by public policies which affect consumption. This includes public procurement of food and appropriate design of taxes or subsidies which affect the relative prices of food products and thereby consumption patterns. The potential of public procurement to lower impacts from the food sector is limited as food purchases in the public sector accounts for only 4% of total food sales.
This project will therefore analyse and calculate effects of a climate tax on food consumption. More precisely, the overall aim of the project is to increase the knowledge as regards the design of an effective tax targeting consumption of food for decreased GHG emissions. The project revolves around the following research questions:
1. How can a consumption tax on food based on the climate impact of different types of foods be designed to be effective, taking into account current (and future realistic) data availability of the climate impact of different food products?
2. What effects as regards 1) distributional effects for consumers, 2) the nutrient intake in different income groups 2) profitability of Swedish farmers and 3) other environmental objectives would such a tax entail?
3. How can the income from such a consumption tax be recycled in order to mitigate potential negative effects? How would these recycling suggestions affect farmers and the environment?
4. What is the cost of such a tax in relation to other measures aimed at reducing greenhouse gas emissions in Sweden?