Epsilon Open Archive

Abstract

This paper designs and evaluates the environmental impacts of a tax on meat consumption in Sweden which reflects environmental damage at the margin. Three meat products are included, cattle, chicken and pork, and three pollutants generating environmental damages; green house gases, nitrogen, and phosphorus. The calculated unit taxes on meat products correspond to 28%, 26%, and 40% of the price per kg of beef, pork, and poultry in 2009. Consumer responses to the taxes are calculated by means of econometric estimates of a linear demand system of the meat products. The results indicate relatively high own price and income elasticities of the meat products and complementarity in consumption. A simultaneous introduction of taxes on all three meat products can decrease emission of GHG, nitrogen, phosphorus and ammonia by at least 27%. If only one meat product can be taxed, a tax on pork meat gives the largest reductions in emission of all pollutants, which to a large extent is explained by the high complementarity in consumption.