What did scientists at the Potsdam Institute for Climate Research suggest?

They suggested adjusting the VAT on meat products as a way to tackle emissions without drastic price increases.

How much could a VAT change on meat reduce environmental damage?

Raising VAT on meat could reduce environmental damage caused by food consumption by 3.48% to 5.7%.

What is the estimated cost of removing reduced VAT on meat?

Removing the reduced VAT rate on meat could increase average annual food expenditure in EU households by around €109.

Home / Environment / Meat Tax: A Simple VAT Hike Could Cut Emissions

Meat Tax: A Simple VAT Hike Could Cut Emissions

20 Jan

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Summary

Raising VAT on meat could cut environmental damage by up to 5.7%.
Removing reduced VAT on meat may cost households €109 annually.
A €52/tonne CO2 surcharge could match VAT hike's emission cuts.

Meat Tax: A Simple VAT Hike Could Cut Emissions

Scientists have outlined a potential strategy to address meat-related emissions without causing significant price hikes, focusing on adjusting Value Added Tax (VAT). This approach suggests that increasing VAT on meat products could lead to a reduction in food consumption-related environmental damage by 3.48% to 5.7%.

Currently, many EU member states, including Germany, apply a reduced VAT rate to meat purchased in supermarkets. Researchers propose applying the standard VAT rate instead. This change could decrease meat and dairy intake, potentially lowering agricultural emissions. Such a policy might increase average annual household food expenditure by approximately €109.

However, the study suggests that this increased cost could be offset by additional tax revenues, estimated at €83 per household. These revenues could fund social compensation programs, potentially reducing the net annual cost to households to around €26. Researchers also explored a carbon pricing mechanism, estimating that a €52 per tonne CO2 equivalent surcharge could yield similar emission reductions as the VAT adjustment.