Simulating the impact of a carbon tax on food in four European countries

Peer Reviewed
1 September 2024

Alessandro Varacca, Elena Castellari, Daniele Moro, Giulia Tiboldo, Wisdom Dogbe, Jose Maria Gil, Cesar Revoredo-Giha, Faical Akaichi, Xavier Irz, Yves Surry, Franklin Amuakwa-Mensah, Paolo Sckokai

Abstract

Since agriculture is responsible for a considerable share of anthropogenic greenhouse gas emissions (GHGE), this paper examines the impact of various carbon taxes designed to incentivize environmentally friendly food consumption patterns in four European countries: Finland, Italy, Sweden, and the United Kingdom. As the proposed fiscal policies are likely to affect food consumption patterns, the study also assesses the consequent changes in diet quality and welfare. The results from this analysis reveal considerable variations in the reduction of GHGE across countries and tax schemes. While most taxation schemes have only a modest impact on dietary quality, these effects differ among nations. Additionally, the welfare cost of the compensated scheme is relatively small but not insignificant. These findings raise questions about the efficacy of a common European fiscal policy for climate mitigation compared to a more flexible approach where each member state calibrates the tax according to its unique circumstances.

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Sustainable Development Goals
Publication reference
Varacca, A., Castellari, E., Moro, D., Tiboldo, G., Dogbe, W., Gil, J. M., Revoredo-Giha, C., Akaichi, F., Irz, X., Surry, Y., Amuakwa-Mensah, F., & Sckokai, P. (2024). Simulating the impact of a carbon tax on food in four European countries. Q Open. https://doi.org/10.1093/qopen/qoae023
Publication | 18 September 2024