Meat Tax

Simon Fairlie concludes that the best way to reduce meat consumption to sustainable levels is to stop using fossil fuels.

Meat should be taxed to help save the planet, proclaimed the Daily Telegraph just before the Paris climate talks began, and almost every newspaper from the Mirror to the Times carried a similar headline. They were referring to a report published by the mother of all think tanks, Chatham House, called Changing Climate Changing Diets: Pathways to Lower Meat Consumption.

In fact the report devotes barely half a page out of 70 to meat taxes — this was just what much of the media latched onto. Mostly the report is about prospects for persuading the public to reduce meat consumption: it is rich in the jargon of modern propaganda techniques, embracing concepts such as "choice architecture" and "nudge strategy". The report's recommendation that "the issue is complex but the message must be simple" is one that has been followed by propagandists throughout history. A simple message about a complex matter is likely to be a wrong message, and this is the case as regards emissions attributable to meat [please download pdf to see box].

There is a growing body of research into the impact of meat taxes, much of it coming from Sweden where the concept has made some political headway. Until now nearly all analysts foresee a flat tax on meat, presumably because it is a message which is simple. There are however other ways of taxing meat and it is illuminating to compare them.

Rationing

Taxes on consumer goods are regressive — that is to say they hurt the poor more than the rich. Rationing would be a much fairer way of reducing meat consumption to sustainable levels. It was the method used during World War II, when there was a shortage. It would also benefit vegans and vegetarians who could either sell their ration or withhold it for ethical reasons.

However there is no shortage of meat today, and the reasons for reducing meat consumption cannot be reduced to an incontestable "simple message". Introducing meat rationing would be highly unpopular and provoke a massive black market. However meat rationing might one day become appropriate if meat production declined for other reasons.

Flat Tax on Meat

Slapping a straight tax on meat, similar to that imposed on alcohol and tobacco, seems to be what most meat tax advocates have in mind. However usually they distinguish between different species of animal, with the level of tax calibrated according to their supposed environmental impact. For example, leading Swedish meat tax analysts, Säll and Gren, propose a 28 per cent tax on beef, a 26 per cent tax on pork and a 40 per cent tax on poultry — figures which reflect the average level of emissions of greenhouse gases, nitrogen and phophates.1

The main problem with this approach is that there are far greater differences between the emissions of different management systems than there are between different species of animal. For instance nitrogen and phosphates are not always pollutants, on the contrary they are essential for food production; they are only pollutants when there is too much of them in one place. This occurs when there is an excessive amount of livestock in one place — what the FAO terms "nutrient loading" as a result of "the urbanisation of livestock"2 — and because of an overall surplus of manure due to the manufacture of artificial fertilisers from fossil fuels. If artificials didn't exist, farmers would be desperate for every scrap of animal manure they could get hold of. A cow fed on organic feed whose manure is used to fertilise grain or vegetable production is therefore performing a service, whereas a cow fed on artificially fertilised maize and rye grass whose slurry is spread on pasture in excessive quantities and leaches away into watercourses is causing problems. To tax them both at the same rate is perverse.

There are many other similar examples. A pig fed on food wastes and crop residues has a tiny fraction of the environmental impact of a pig fed on soya and grains. Beef animals born of dairy cows have far lower emissions than those born into beef suckler herds: the dairy cross calf is a byproduct of the milk industry, whereas for every pure bred beef calf, a mother cow has to be maintained for a year.

Not only does it make no sense to tax different management systems at the same rate, it is likely to make standards of livestock management worse. If the cost of meat goes up, many consumers are likely to seek out the cheapest meat they can find — remember how sales of organic food declined as a result of the economic crisis of 2008-2010. And the cheapest meat (of any given cut) is often that which has been reared using the worst method.

V A T

Imposing VAT on meat, presumably at the standard rate of 20 percent, would be a flat tax under another name, except in one respect. Small farmers with a relatively low turnover (currently under £82,000 per year) could remain exempt. They could therefore sell their meat direct to the consumer with a 20 per cent advantage over the supermarkets (though they would not be able to claim back VAT on expenses.)

VAT on meat would therefore give a welcome boost to small scale low-input livestock farmers, to farmers' markets and to other forms of local distribution. Insofar as these small farmers are more ecologically benign (as they may well be in respect of inputs of fertiliser and pesticide, and manure accumulation) this will carry some environmental benefits.

On the other hand the industrial sector which is subject to VAT would be facing the same perverse incentives as under a flat tax, and so might shift towards supplying cheaper, less well farmed meat, from bigger, more industrial farms, and perhaps with more of it imported. We might witness an increased divergence between a VAT-exempt local food sector and the industrial food sector, with poor rural consumers having better access to high quality fresh meat than poor urban consumers. It could also lead to veganism and vegetarianism being more widespread in cities than in the countryside — a trend that is already discernible.

The other advantage, from the Government's point of view, is that it is easy to implement, since it requires no assessment of the environmental performance of different kinds of meat, and it could be introduced along with VAT on some other comestibles that are considered unhealthy. It is something that one might expect small farmers to be lobbying for as an alternative to a flat tax.

Feed Tax

It would be well nigh impossible to devise a system that could successfully determine different levels of tax for different meat products according to the level of environmental impact caused by their manufacture. Any methodology would be too complex and too contentious. However one way to target certain extravagant management systems would be to impose a tax on livestock feedgrains.

Again the easiest way to impose this might be by applying VAT on animal feeds. However a 20 per cent tax on feed grains is unlikely to have much significant effect on the price or consumption of meat — the price of grain doubled after the 2008 economic crisis without any massive effect upon meat prices. Moreover VAT registered farmers would be able to claim the tax back, giving them an advantage over smaller farmers who weren't VAT registered. In other words VAT on animal feeds, counter-intuitively, would disadvantage the smaller livestock farmer — in contrast to VAT on meat.

The alternative would be a flat tax on animal feeds, preferably rather heftier than 20 per cent. This would favour farmers feeding livestock on grass, crop residues, and food waste and disadvantage pig and poultry factory farms. It would result in increased sowing of clover, lucerne and other legumes which would have a benign effect upon the quality of soils.

However a precise definition of what constitutes feedgrains is elusive. Should spoilt and substandard grain which is only fit for animal consumption be taxed? What about soya protein and other feedcakes that are a co-product of vegetable oil production? Why not maize silage which is in some ways more problematic than feeding grain to animals? And what about the feedgrain buffer — the 50 kilos or so of grain per person that it is necessary to grow in the best year to ensure that there is enough food for everyone in the worst year? Do we really want to be taxing that?

Artificial Fertilisers

Artificial fertilisers are problematic not only because they deplete the soil of organic matter and are currently dependent upon fossil fuels for their manufacture, but also because their ready availability creates a surplus of organic fertility (ie manure) which causes pollution and greenhouse gas emissions.

An effective fossil fuel tax (see below) would rectify these problems. However, in its absence, artificial fertilisers benefit from financial advantages over organic manures, which although not tax-based, have a similar effect. These advantages derive from the fact that the burden of distinguishing between organic agriculture and chemical agriculture falls entirely upon the organic sector who have to pay for the considerable cost of certification and labelling.
Since the excess fertility problem is due to a superabundance of artificial fertilisers, it follows that it is the farmers who use these chemicals who should be held responsible for their licensing and labelling, rather than organic farmers who don't use them. If non-organic food for sale in supermarkets carried labels saying "grown with the use of chemical fertilisers", or pesticides or GM seed, and organically produced food was regarded as conventional, there would be a shift in patterns of consumption that would lead to a reduction in the use of artificial fertilisers and better manure management.3

Carbon tax

Meat would be caught by wide-ranging carbon taxes, should these ever be implemented. A tax on all greenhouse gas emissions would require the almost impossible task of reaching agreement on how great the emissions from livestock and meat actually are. Analysts have settled on figures such as £1.76 per kilo of beef,4 which mostly appear to be based on the FAO's contentious figure of 14.5 per cent (see box). If such a figure was agreed upon for beef, pork, poultry etc, the tax would act exactly as the flat rate described above with all its perversities.

Fossil Fuel Tax

A ratcheted annual increase in tax on oil and other fossil fuels, including red diesel, would be simpler to apply since there would be no need to assess the emissions of different kinds of meat (in the UK it was applied at a rate of three per cent a year from 1993-1999). To achieve climate targets, we have to stop using fossil fuels, so a fiscal measure of some kind (with compensatory measures for poor countries) is necessary anyway.

Advocates of a meat tax argue that such a tax won't do the job because it only targets the 75 per cent of global warming due to fossil fuels, while the 25 per cent due to agriculture and land use change remains untaxed. The Swedish Food and Environment Network takes the argument further by looking at what we could be doing with agricultural land instead:

"Today grasslands and embankments are cultivated to feed cattle throughout Sweden, but these areas could be used for creating biogas and fertilisers. This means we have the opportunity to produce a lot of bio-energy if we reduce pure reliance upon animals. This could be vital in making Sweden less dependent upon fossil fuels in the long run."5

They no doubt have in mind a 2011 University of Gothenburg research paper6 which estimated that a flat tax of 60 euros per tonne of CO2 equivalent on meat and dairy would reduce Europe's agricultural emissions by just seven percent; but if the land made available were used for bioenergy production, the decrease in emissions could be six times greater. Incidentally, this is similar to the scenario envisaged by the Centre for Alternative Technology in their report Zero Carbon Britain.7

However it is precisely this ability to convert grazing land to biomass production which suggests that if you have an effective fossil fuel tax you may not need a meat tax at all. If bio-energy really is vital in making us less dependent upon fossil fuels, then as taxes on fossil fuels increase, energy will become more expensive and there will be increasing market pressure for former grazing land to be used for woodland, coppice and other bioenergy crops, which will result in a reduction of ruminant grazing anyway. Meanwhile as fossil fuel scarcity makes artificial fertilisers more expensive, there is also likely to be a reduction in the amount of grain available for animal feed. An effective reduction in the use of fossil fuels would therefore result in a decline in livestock numbers and meat consumption.8

On the other hand, if artificial fertilisers become scarce and expensive, there will be a greater need for organic fertility to grow food, and the best source for this is grass and legumes, not the woody and fibrous crops that supply energy most efficiently. Grass in outlying areas can be harvested, digested and transported to arable land free of charge by ruminants, who also have the added bonus of providing meat.

Which of these two requirements, biomass for heat or fertility for food, will be the more pressing in a world without fossil fuels? One can only guess that it will be a bit of both. Putting aside other matters which might need to be regulated (such as the power of corporations and wealthy people to act outside the public interest, the safeguarding of biodiversity etc), the best way to decide how much of our non-arable land should be devoted to energy and trees and how much to fertility and ruminants might be to leave it to the market. People and communities will decide with their purse which one they need most. Taxing one to favour the other would alter the balance and perhaps give a wrong answer.

Conclusion

To reduce greenhouse gas emissions to a sustainable level, there has to be a tax or some other mechanism that reduces fossil fuel consumption to a tiny fraction of present levels. It is likely that as this happens, the diminished availability of artificial fertilisers and competition for grazing land from energy crops will lead to a reduction in livestock numbers, without any need for a targeted meat tax.

There is however an argument that it will take some time to reduce fossil fuel emissions to negligible proportions, and in the interim considerable reductions in emissions can be achieved by reducing meat consumption. This argument is reinforced by the fact that reductions in methane emissions have a more immediate effect upon the greenhouse gas emissions, whereas the effect of reductions in CO2 are more long term.

There is some strength in this argument, but there is also the danger that focussing on the relatively small proportion of emissions attributable to meat because it is "low hanging fruit" will eclipse the more fundamental matter of dealing with the 70 per cent attributable to fossil fuels. That seems to be the intent behind the "cows cause more emissions than cars" rhetoric.

If a meat tax does gain acceptance as a preliminary to an effective mechanism to reduce fossil fuel consumption, then it is important to ensure that it favours forms of agricultural and livestock management compatible with a low carbon society. An intensive system which produces fewer methane emissions because of its reliance on artificial fertilisers and feed grains, is not going to be of great help if, in a low carbon future, artificial fertilisers and energy become scarce, while methane ceases to be a major problem.

If a robust fossil fuel tax is not immediately achievable, then of the fiscal mechanisms examined above, perhaps the most promising is VAT on meat. It is easily introduced, because the public are used to VAT on luxury items; and the advantages it gives to small farmers and local foods may help steer us away from the industrial megafarm model reliant upon cheap fossil fuels. A licencing system that placed the burden of certification and labelling upon chemical farmers will also take us in the right direction. But ultimately we need to stop using fossil fuels, and when we do livestock numbers will decline and stabilise at a sustainable level of their own accord. 

 

REFERENCES

1. S Säll and I Gren: Green Consumption Taxes on Meat in Sweden, Swedish University of Agricultural Sciences working paper 2012, pub.epsilon.slu.se/9294/1/sall_s_121214.pdf; and “Effects of an Environmental Tax on Meat and Dairy Consumption”, Food Policy 55 (41-53), 2015.
2. H Steinfeld et al, Livestock’s Long Shadow, FAO, 2006, pp 229 and 261.
3. See “ICBINO (Pronounced IcyBeano)”, and “Little Black Tractor”, The Land 12, Summer 2012.
4. A Briggs et al, “Assessing the Impact on Chronic Disease of Incorporating the Societal Cost of Greenhouse Gases into the Price of Food”, BMJ Open, 2013, http://bmjopen.bmj.com
5. “ ‘Meat Tax Could Secure the Future of Sweden’s Farms’’, The Local, 21 Jul 2015, www.thelocal.se
6. S Wirsenius, “Greenhouse Gas Taxes on Animal Food Products: Rationale, Tax Scheme and Climate Mitigation Effects”, Climatic Change, 2010.
7. Zero Carbon Britain: Rethinking the Future, Centre for Alternative Technology, 2013, http://zerocarbonbritain.com
8. That is unless renewable energy turned out to be so cheap and available that fossil fuel consumption could be reduced to zero without resorting to biomass energy crops — and in this case the reduction in emissions would be so great that cutting numbers of grazing animals might not be necessary.
9. PJ Gerber et al, Tackling Climate Change through Livestock Emissions, FAO 2013, www.fao.org/3/i3437e.pdf
10. S Fairlie, “The FAO’s Long Shadow”, The Land 4 2007,
11. D Carrington, “Eating Less Meat Essential to Curb Climate Change, Says Report”, The Guardian,3 December 2014.
12. L Wellesley et al, Changing Climate Changing Diets, Chatham House, 2015 p viii.
13. S Kirchne, “Three Decades of Global Methane Sources and Sinks”, Nature Geoscience, Volume:6,pp:813–823, 2013.
14. S Fairlie, “Livestock’s Shadow Shortened”, The Land 15 2013/14.
15. Eg EPA figures at http://oceanlink.island.net/ONews/ONews7/methane.html; Bousquet P et al 2006 at http://whatsyourimpact.org/greenhouse-gases/methane-sources.
16 IPCC Fourth Assessment Report, FAQ 10.3, If Emissions of Greenhouse Gases are Reduced, How Quickly do Their Concentrations in the Atmosphere Decrease? 2007

Meat Tax
This article originally appeared as 'Meat Tax' in The Land Issue 19