What would happen if climate fees for food moved from political conversation to policy?

Changing the foods you eat can have a big impact on your carbon footprint. Many of these changes will also be beneficial for your health! For example, shifting to a vegetarian meal one day a week for one year could save the equivalent of driving 1,160 miles. But you don’t have to be fully vegetarian or vegan to make an impact. By switching to less carbon-intensive animal sources (such as fish and chicken) you will go a long way to reducing your footprint. For example, replacing all beef consumption with chicken for one year would save the equivalent of driving 993 miles. “Carbon Footprint Factsheet | Center for Sustainable Systems.” http://css.umich.edu/factsheets/carbon-footprint-factsheet.

Main article based on: Sureth et. al. “On the emission and distributional effects of a CO2eq-tax on agricultural goods—The case of Germany.” Food Policy. 2025.

Taking Germany as their test case, researchers calculated that it would not only slash emissions but also generate an €8.2 billion bounty.

January 17, 2025

Placing an emissions tax on carbon-intensive foods in Germany would drive down the consumption of dairy and meat, and cut the country’s agricultural emissions by almost a quarter, new research finds. Meanwhile, the tax would generate an €8.2 billion windfall that could be ploughed into more sustainable agriculture, or paid out as a climate dividend to the public.

Farming in Germany is responsible for 8% of national emissions, and the government has said it wants to cut agriculture’s contribution from the current annual 62 metric tons of carbon dioxide equivalent (MtCO2eq), to 56 MtCO2eq by 2030. Currently, no country in the world applies carbon taxes to food that would help them achieve such cuts—although proposals have been made in Germany, as well as in Sweden and Denmark.

Writing in Food Policy, the researchers on the new study look into what would happen if this idea moved from the political conversation into policy, taking Germany as their test case. To do this, they drew on data from a huge pre-existing national survey of income and consumption patterns from 60,000 German households, the largest survey of its kind in Europe. This enabled them to explore how households’ purchasing patterns change in response to shifting prices.

Then, with the help of a model, they applied that to determine how consumption patterns of carbon-intensive foods like beef, chicken, pork, milk, butter and cheese might change if those were taxed to be more expensive.

For this, the researchers applied the carbon tax in the model to all foods in a weighted manner that reflects the varying carbon-intensities of each one. The tax was set at €201 per ton of CO2-equivalent, a figure that’s based on established work that estimates the social cost of carbon to society.

In the model, it quickly emerged that people would shift away from more carbon-intensive dairy and meat products under this tax: “Households would tend to buy more food that is less carbon-intensive on average, such as vegetables,” study author Max Franks, a researcher at the Potsdam Institute for Climate Impact Research, said in a press release. Strikingly, Germans would consume 53.3% less beef, according to the model. Consumption of pork would go down by 15.3%, and dairy and eggs consumption would decline by 18.1%.

 

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The declines were clearly linked to much higher costs for some products—for example, a 51.3% increase in the price of beef, 48.56% for sheep and goat meat, and a 48.8 and 49.1% price hike for cheese and butter respectively.

The general shift from dairy and meat products to plant-based foods that would result from these price hikes is predicted to drive down emissions in the agricultural sector by just over 15 MtCO2eq, the researchers calculate. This would cut the sector’s emissions by 22.5% overall—a figure “more than twice as large as the total annual emissions of, for example, the chemical industry with 6.8 MtCO2eq, and almost six times the amount of emissions arising from the rather frequently discussed German domestic flights,” the researchers write in the journal.

The 15 MtCO2eq decline symbolizes the striking climate potential of just one measure, as it dramatically exceeds the German government’s 2030 agricultural emissions-reduction target of 6 MtCO2eq.

Meanwhile, the carbon tax would generate a huge bounty of €8.2 billion. What would happen to all that money?

That’s an open question, one that the researchers briefly explored in the paper with the idea of a climate dividend, wherein the tax bounty could be split between members of the public. This would result in payments of €103.89 per person each year, including children.

The model showed that the initial carbon tax would cost lower-income households more, relatively-speaking, than higher-income households, because it would take up more of their annual budget. Yet according to the paper, the tax payouts would offset this loss because the way the dividend works, the lower-income households would actually be slightly over-compensated by the dividend.

The intended purpose of an annual payout, the researchers say, would be to help to sweeten the pill, making a carbon tax more socially-acceptable to all. There are also other routes this newly-raised money could take, such as driving investment into sustainable agriculture, the researchers note.

In 2030, Denmark will be the first country to impose a carbon tax on agriculture, and perhaps that would trigger other nations like Germany to follow suit. A carbon tax may be an idea whose time has finally come: the recent study provides a tantalizing glimpse at what could be achieved.

 

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