Investors in food and agricultural companies have been told to prepare for meat taxes as governments try to tackle the health and environmental impacts of high meat consumption.
A new analysis by the FAIRR (Farm Animal Investment Risk & Return) investor network concluded that it is becoming “increasingly probable” that the implementation of the Paris Agreement will lead some governments to tax meat in the same way many now tax sugar, carbon and tobacco.
It encouraged food companies to start using an internal ‘shadow price’ of meat to account for future costs in the same way many use internal carbon pricing.
FAIRR said the growing evidence of the meat industry’s harmful impacts on both human health and the environment made the imposition of a ‘behavioural (or sin) tax’ on meat products increasingly likely if countries are to fulfil their commitments to the Paris Agreement.
It noted that countries including Denmark and Sweden have already debated a meat tax and said that meat is on the same path that led goods such as tobacco, sugar and carbon to become the target of standalone taxes.
“The damage the meat industry causes to our health and environment make it very exposed to similar levies, and it is increasingly probable we’ll see meat taxes become a reality,” said Jeremy Coller, CIO of Coller Capital and founder of the FAIRR Initiative.
“If policymakers are to cover the true cost of livestock epidemics like avian flu and human epidemics like obesity, diabetes and cancer, while also tackling the twin challenges of climate change and antibiotic resistance, then a shift from subsidisation to taxation of the meat industry looks inevitable.”