Essays on economic policy on food consumption

This thesis consists of four papers investigating the use of taxes on food consumption. The aim is providing policy information concerning what to eat from an environmental and health perspective. In Paper I the environmental damage costs of greenhouse gas emissions (GHG) and nutrient loads into the Baltic Sea from Swedish production of meat and dairy products are calculated. Costs are introduced as consumption taxes followed by estimations on the response in consumer demand and possible pollutant reduction levels. In Paper II, the distributional effects of the tax levels on Swedish produced meat, found in Paper I, are calculated for Swedish households. The incidence of taxes is calculated as the willingness to accept as compensation for taxes to be introduced, related to the households' total income and expenditure levels. The horizon is broadened in Paper III where consumption taxes on meat and dairy products in the whole of EU 27 are investigated. Three tax levels are introduced and by the use of the CAPRI model, changes in demand, supply, GHG emissions and welfare effects are estimated. In the last paper, Paper IV, most food commodities consumed in Sweden are included in a system of demand elasticities. The aim is to construct an economic incentive scheme to encourage the Swedish population to consume less meat and dairy products and increase consumption of fruit and vegetables. Reaching these consumption targets would not only reduce emission levels as was investigated in Paper I, but also improve public health. In Papers I, II and IV Marshallian, Hicksian and Income elasticities were estimated using the AIDS model. The overall results show that demand of food is in general inelastic, which implies that taxes have limited effects on demand and on pollutant levels

Who pays for climate taxes on food? : a simulation of distributional effects in Sweden

In this study we investigated the distributional effect of climate taxes on food consumed in Sweden and we find that climate taxes on all foods are regressive and affect already exposed families such as single parents with several children, retired and unemployed the most. We used Compensating Variation (CV) for multiple price changes which results in sums that households need to be compensated with, not to feel their utility levels are decreased by the imposed taxes. The compensating sums were found by combining estimated hicksian demand elasticities, simultaneous price changes on 52 different food commodities and household data on food expenditures. Elasticities were calculated by the use of a three stage demand system and tax levels were based on LCA calculations of carbon equivalents from average goods consumed in Sweden. The results of the CV calculations depend on the initial consumption of the different commodities, but also on the number of commodities included in the study. The large number of commodities in this study makes it stand out in the literature, and we therefore put more weight on the relative effect between households, rather than total sums that would be needed to compensate households. The effects and the relations between households were calculated both on disposable income levels and total expenditures

Distributional effects of environmental meat taxes in Sweden

This paper looks at the distributional effect of an environmental tax on meat in Sweden, if such a tax was to be introduced. Welfare effects are measured as Compensation Variation (CV) for multiple price changes where Hicksian cross price elasticities, household expenditures and price changes are used in the calculations. Results show that taxes on meat are neutral over households when expenditures on meat are used as welfare indicators, and regressive if income is used. This can be explained as households use similar shares of total expenditures on meat. The households with the smallest income levels need to be compensated with 950 SEK per person and year to feel that utility is not lowered if taxes on meat are introduced, and the households with the highest income levels need to be compensated with 1176 SEK per person and year. This corresponds to 0.78% and 0.80% of total expenditures for the groups respectively. Compared to income levels this is 1.04% for the households with the smallest income levels and 0.52% for the households with the largest income

Modeling price sensitivity in food consumption

In this paper we investigate the mitigation possibilities of climate impact weighted food taxes in Sweden. We include 52 food items in a demand system of elasticities, covering most food consumed by the Swedish population. Tax levels are based on the Swedish Carbon tax and would lead to price increases up to SEK 25 (close to EURO 2.5) per kilo product. The possible emission reductions would be just above 200 kilos of CO2e emissions per person and year which corresponds to a 10% decrease from Swedish food consumption. Most important for the reductions are beef, other meats and dairy products. Almost 90% of reductions are from animal products

Measuring sustainability at farm level – A critical view on data and indicators

Measuring sustainability at farm level is a priority for both research and policy and requires sustainability indicators to track progress. Indicators make the sustainability concept more concrete and guide farm level decisions, playing a decisive role in determining food system impacts on societies and the environment. Data availability is often a limiting factor when choosing indicators, but not enough attention is paid to the role of data in indicator construction and assessment results. This paper assessed the critical role of data in indicator construction and the potential limitations that current data availability imposes on farm-level sustainability assessments, using the example of dairy farms in Sweden. To do so we used a five-step approach consisting of a literature review, an inventory of data sources, an expert consultation, a matching and gap analysis, and a critical assessment. We found that 20 indicators categorized under 12 out of 20 sustainability themes had measurement issues due to missing scope, temporary data, or additional data requirements. At least some indicators within all themes in the social and economic dimensions were measureable, while all indicators for pesticides, non-renewable energy, and soil quality in the environmental dimension had measurement issues. In the critical assessment, we argue that for some indicators, there are trade-offs between data availability and issues of comprehensibility and analytical validity. Furthermore, we found that no single data source could be used to measure all themes; which means that merging of different data sets is needed for a broader on-farm sustainability assessment. Our findings are relevant for the discussion on sustainability indicators and will also inform future programs aimed at collecting sustainability data at farm level, which should consider the broad data needs identified, and the potential to merge data to enable holistic sustainability assessments

Diagnostic, regenerative or fossil-free- exploring stakeholder perceptions of Swedish food system sustainability

In an analysis of food system sustainability challenges and solutions among Swedish food system actors using Q -methodology, five perspectives were identified. One of the main three perspectives placed the highest priority on reduced meat consumption, food waste, and climate impact in agriculture, but downplayed strategies highlighted in the national food strategy and social aspects, and can be interpreted as a diagnostic climate mitigation-oriented perspective that does not reflect current negotiated policy processes or 'softer' values of food. In an alternative regenerative perspective, industrialized large-scale farming and lack of internalization of external costs were regarded as the main problems, and diversity, soil health, and organic farming as the main solutions. Proponents of a third perspective regarded phasing out fossil fuels, increased profitability of companies, increased meat production, and self-sufficiency as high priorities. These contrasting views can be a major barrier to transforming the Swedish food system. However, a number of entry points for change (i.e. aspects highly important for some and neutral for others) were identified, including focusing on healthy diets and increased production of fruit and vegetables. Focusing on these can build trust among stakeholders before moving to discussions about the larger and more sensitive systemic changes needed

An indicator framework to guide food system sustainability transition - The case of Sweden

Well-aligned food policies are needed at both national and international level to guide food system transformation towards sustainability. Rigorous indicator frameworks are essential in order to facilitate discussion of priorities, enable comparisons, assessment and progress monitoring, and ensure accountability. In this study, we develop a national framework for a sustainable food system, using Sweden as a case. Our framework, the Food System Sustainability House, advances the literature on sustainable food system frameworks in three distinct ways. Firstly, it is tailored to a specific national context (Sweden in our case); secondly, it distinguishes between impacts of domestic production arising within territorial boundaries and impacts related to Swedish consumption independent of country of origin; and thirdly, to facilitate policy priorities, it suggests how different dimensions of sustainability are interlinked at a conceptual level. From a scientific perspective, the Food System Sustainability House postulates the interlinkages between the societal objectives of the food system, the environmental foundations on which production takes place, and the economic system and governance which in the framework are suggested to function as enablers for an overall sustainable system. From a policy perspective, the framework provides a much-needed basis for assessing food system sustainability by suggesting indicators within a comprehensive set of sustainability themes at national level for monitoring distinct perspectives. It also provides the necessary basis for a discussion on how sustainability dimensions are interlinked

Green consumption taxes on meat in Sweden

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

Effekter av en klimatskatt på livsmedel : Slutrapport

Produktion av de livsmedel som konsumeras i Sverige orsakar stor miljöpåverkan både i och utanför landet. Syftet med detta projekt har varit att öka kunskapen kring hur en konsumtionsskatt på alla livsmedel (såväl inhemskt producerade som importerade) som är baserad på livsmedlens klimatpåverkan kan utformas och vilka effekter en sådan skatt får. Till skillnad från tidigare studier inkluderas i detta projekt hur en skatt skulle slå om alla typer av livsmedel i skattesystemet och inte bara animaliska produkter beskattas. Klimatvinster och skatteintäkter till staten beräknas utifrån hur skatten påverkar konsumenters efterfrågan på olika livsmedel. Vidare analyseras skattens effekter med avseende på 1) fördelningseffekter (hur den slår mot hög- respektive låginkomsttagare), 2) näringstillförseln till befolkningen, 3) påverkan på lönsamheten i svenska jordbruksföretag, samt 4) andra miljöeffekter. Det studeras även hur intäkter från konsumtionsskatten kan användas för att motverka vissa negativa ekonomiska konsekvenser av skatten i jordbruket, samt ytterligare utsläppsbegränsande åtgärder. Resultaten visar att en konsumtionsskatt på livsmedel som motsvarar den svenska koldioxidskatten år 2015 (1,15 kronor per kg CO2) och som omfattar alla utsläpp ur ett livscykelperspektiv fram till affären skulle ha potential att minska växthusgasutsläppen från livsmedelskonsumtionen med drygt 10 procent. Priset på genomsnittligt nötkött ökar med 18 procent med en sådan skatt, medan priset på grönsaker endast ökar med några få procent. Om skatten endast omfattar animaliska produkter blir utsläppsminskningen 8 procent. Om endast nötkött, som är det livsmedel som orsakar i särklass högst växthusgasutsläpp per kg, beskattas på samma sätt, minskar utsläppen med cirka fyra procent. Om skatten endast omfattar utsläpp av metan och lustgas i jordbruket minskar utsläppen också med cirka fyra procent. En klimatskatt på alla livsmedel är regressiv, det vill säga låginkomsttagare kommer betala en större andel av sin inkomst i livsmedelsskatt. Tidigare forskning har visat att en skatt på bara kött slår hårdast mot medelklassen. De konsumtionsförändringar som blir en följd av en klimatskatt på livsmedel leder också till minskningar av miljöbelastningen inom andra miljöområden vilket framför allt är en effekt av den minskade konsumtionen. Även användning av betesmark minskar. Beroende på var betet sker, det vill säga på vilka typer av marker och i vilka länder, kan det ha negativa eller positiva konsekvenser. I Sverige behövs en viss mängd betesdjur för att hävda naturbetesmarker som är rika på biologisk mångfald. I detta projekt har det inte varit möjligt att särskilja på kött från olika platser så det har inte gått att bestämma vilken typ av bete som påverkas, det vill säga om det är bete på åkermark, gräsmark utomlands, naturbetesmark i Sverige, eller utomlands. För att hantera en potentiell målkonflikt där en klimatskatt slår mot bete av naturbetesmark i Sverige skulle ersättningarna till naturbetesmarkerna kunna höjas vid införandet av en klimatskatt. Det råder idag inte brist i Sverige på idisslare som kan beta naturbetesmarker men många idisslare föds upp på stall och/eller betar på åkermark. En klimatskatt på livsmedel i konsumentled skulle generera intäkter till statskassan på närmare 20 miljarder kronor årligen om alla livsmedel beskattas baserat på alla utsläpp fram till affären, eller 12 miljarder kronor med en skatt endast på metan och lustgas från jordbruket. Dock har en klimatskatt på livsmedel negativ påverkan på de svenska jordbrukarnas inkomster på grund av minskad efterfrågan på livsmedel – de minskar med cirka fem procent enligt modellering i detta projekt. Ett sätt att motverka denna negativa effekt på lantbrukarnas inkomster är att återföra delar av skatteintäkterna till jordbruket. Ett alternativ på sådan återföring som också medför stora minskningar av utsläppen av växthusgaser (utöver de minskningar som konsumtionsförändringarna leder till) är ersättning för att återväta torvmarker. Andra alternativ för åtgärder som undersökts i projektet är ersättning för att anlägga våtmarker för att minska läckage av kväve och fosfor samt ökade ersättningsnivåer för skötsel av naturbetesmarker. Andra viktiga aspekter vid en utformning av en skatt inkluderar juridiska och administrativa förutsättningar, samt en rad aspekter som har med skattens acceptans att göra. Jordbruket och livsmedelsproduktionen är utöver påverkan på miljön också förknippade med andra hållbarhetsaspekter såsom utmaningar inom antibiotikaanvändning och djurvälfärd. Dessa aspekter ingår inte i detta projekt och behöver således beaktas i kommande projekt och utredningar om hur styrmedel på livsmedel bör utformas. Andra kunskapsluckor vi identifierat under arbetets gång handlar bland annat om hur konsumenter byter inom livsmedelsgrupperna. Detta inkluderar till exempel att göra separata analyser för betalningsviljan på exempelvis svenskt naturbeteskött och importerat nötkött