Is Meat Too Cheap? Towards Optimal Meat Taxation

29 Pages Posted: 11 Mar 2021

See all articles by Franziska Funke

Franziska Funke

University of Oxford – Institute for New Economic Thinking at the Oxford Martin School

Linus Mattauch

University of Oxford

Inge van den Bijgaart

University of Gothenburg - Department of Economics

Charles Godfray

Oxford Martin School, University of Oxford

Cameron J. Hepburn

University of Oxford

David Klenert

European Commission-Joint Research Centre

Marco Springmann

Nuffield Department of Population Health, University of Oxford

Nicolas Treich

French National Institute for Agricultural Research (INRA); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: March 9, 2021

Abstract

Livestock is known to play a significant role in climate change and to negatively impact global nitrogen cycles and biodiversity. However, economically efficient policies for regulating meat production and consumption are under-researched. In the absence of first-best policy instruments for the livestock sector, second-best consumption taxes on meat can address multiple environmental externalities simultaneously, while improving diet-related public health. Here, we review the empirical basis for the ‘social costs of meat’ and study rationales for regulatory efforts to tax meat in high-income countries from the perspective of public, behavioural and welfare economics: (i) multiple environmental externalities, (ii) adverse effects on one’s own health, (iii) animal welfare, (iv) learning curves for 'alternative protein technologies', and (v) distributional effects. We conclude that meat is significantly underpriced and provide preliminary estimates of the environmental social costs associated with meat consumption. We identify several directions for future research towards optimal meat taxation.

Keywords: Environmental taxation, second-best regulation, livestock, food policy

JEL Classification: H23, Q18, Q50

Suggested Citation

Funke, Franziska and Mattauch, Linus and van den Bijgaart, Inge and Godfray, Charles and Hepburn, Cameron J. and Klenert, David and Springmann, Marco and Treich, Nicolas, Is Meat Too Cheap? Towards Optimal Meat Taxation (March 9, 2021). Available at SSRN: https://ssrn.com/abstract=3801702 or http://dx.doi.org/10.2139/ssrn.3801702

Franziska Funke (Contact Author)

University of Oxford – Institute for New Economic Thinking at the Oxford Martin School ( email )

United Kingdom

HOME PAGE: http://https://www.inet.ox.ac.uk/people/franziska-funke/

Linus Mattauch

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Inge Van den Bijgaart

University of Gothenburg - Department of Economics ( email )

Sweden

Charles Godfray

Oxford Martin School, University of Oxford

University of Oxford
34 Broad Street
Oxford, OX1 3BD
United Kingdom

Cameron J. Hepburn

University of Oxford

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

David Klenert

European Commission-Joint Research Centre ( email )

Joint Research Centre, European Commission, Rue du
Brussels, Brussels 1050
Belgium

Marco Springmann

Nuffield Department of Population Health, University of Oxford ( email )

Richard Doll Building
Old Road Campus
Oxford, OX3 7LF
United Kingdom

Nicolas Treich

French National Institute for Agricultural Research (INRA) ( email )

147, rue de l'Universite
Paris Cedex 07, 78-Yvelines 75338
France
+33 0 1 42 75 90 00 (Phone)
+33 0 1 47 05 99 66 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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