Could taxing unhealthy food help tackle climate change?

_{A new study found imposing taxes on foods high in fats, sugar and salt products led to a reduction in their consumption.}

Foods high in fats, sugar and salt (HFSS) have a significant impact on public health, the climate and the economy, but could taxing these products help in the fight against climate change? 

A new study, involving researchers at SRUC, has found that taxing HFSS could potentially reduce emissions from food consumption, but it is unlikely that one policy could achieve both nutritional and climate goals. 

Led by the University of Aberdeen Rowett Institute, the study was based on the analysis of secondary data collected from 3,260 households in Scotland across 18 food categories.

It looked at the impact of taxing all HFSS products while keeping the prices of other food items unchanged and taxing HFSS products while subsidising fruit and vegetables with the revenue generated. 

The study found that imposing taxes on HFSS products led to a reduction in their consumption due to price effects. Specifically, a 10 per cent tax on HFSS food groups, combined with subsidising fruits and vegetables using tax revenues, resulted in a 5–9 per cent decline in HFSS consumption and an 11 per cent and 7 per cent increase in vegetable and fruit consumption respectively. 

However, it also highlighted the potential environmental impact of these policies. When tax revenues were used to subsidise fruit and vegetables, greenhouse gas emissions increased by 2 per cent. In contrast, emissions decreased by 3 per cent when only HFSS food groups were taxed. 

In addition to this, the study also found that taxing HFSS without a subsidy policy in place could have a more regressive impact on consumers compared to when fruits and vegetables were subsidised. 

Lead researcher Dr Wisdom Dogbe, from the University of Aberdeen Rowett Institute, said: “This study shows us that there are very real trade-offs between achieving dietary, welfare and environmental goals.

“Going forward, this research can be considered in ongoing discussions about the banning of promotions on HFSS. If there weren’t promotions on these products, and prices were to naturally increase as a result, we believe this could be beneficial as it may encourage consumers to reduce their purchases. 

“Ultimately, our research highlights the complex interplay between dietary, welfare, and environmental goals when implementing a HFSS tax policy. The choice of policy scenario adopted by the government would have to depend on the national objectives and priorities.” 

Prof Cesar Revoredo-Giha from SRUC, who co-authored the research, said: “The study illustrates that changing the relative prices of HFSS and fruits and vegetables can have positive impacts in terms of both nutrition and the environment. This can be done by a combination of fiscal measures such as taxes and subsidies.”

The study, which also involved the University of Edinburgh, was published in the Journal of Cleaner Production.

Posted by SRUC on 18/09/2023