Economists say labelling supermarket food to show its environmental impact, in combination with taxing the most carbon-intensive items, could slash UK greenhouse gas emissions by almost 5%, while generating net gains for society.
In a study in the Journal of Environmental Economics and Management, a research team led by the University of Trento in Italy in collaboration with the University of Exeter explore how best to minimise the climate impacts of food while maximising the return for society.
As food production and consumption account for one third of global greenhouse gas emissions, the researchers believe there is huge, untapped potential in this area for new climate mitigation policies and interventions.
"We designed a simulated online supermarket environment and collected data from about 5,000 UK-based respondents regarding which products they typically buy, how frequently and in what quantity," explained Dr Michela Faccioli, from the University of Trento.
The study participants were then asked whether and how they would change their typical food choices following the introduction of carbon labels - showing the carbon footprint of each product - and/or taxation on the most carbon-intensive food items.
The study results show that carbon labels led to a 5.6% decrease in the carbon content of the average food basket, the equivalent of 2.7% of UK greenhouse gas emissions.
A tax of £60 per tonne of CO2e (carbon dioxide equivalent) on the most carbon-intensive products was almost twice as effective, yielding a carbon footprint reduction of about 10% but coming at a cost of £79 per person per year.
The researchers calculated that reducing the tax rate to £28 per tonne of CO2e, when combined with labelling, would achieve the same approximately 10% carbon footprint reduction in the average shopping basket - the equivalent of 4.7% of UK emissions - and would cost only £34 per person per year.
That cost, the researchers argue, is more than offset by the social benefits of having lower greenhouse gas emissions in the atmosphere and more revenues for the public sector.
They calculate the overall net social benefit from a tax and labelling combination converted into a monetary value to be around £13 per person per year, more than double a tax-only scenario (around £6) and significantly larger than a carbon labelling scenario alone (approximately £8).
Professor Ian Bateman, Director of the University of Exeter's Land, Environment, Economic and Policy Institute, said: "These findings imply that carbon taxation and carbon labelling can be combined to abate greenhouse gas emissions, while keeping the cost to consumers at a minimum and generating overall improvements in people's welfare."
Dr Marco Tomasi, from the University of Trento, said: "Introducing carbon taxes is not without challenges, as these measures have generally limited public acceptance and tend to burden especially the less-wealthy households. Our study shows that redistributing the tax revenues on a per capita basis would effectively eliminate the inequalities associated with the implementation of the tax, thus increasing the equity of the policy."
The study also shows that the impact of the policies varies depending on the dietary habits of respondents. Dr Carlo Fezzi, from the University of Trento, added: "We find that households with a diet rich in meat are also those that tend to react more to the display of carbon labels, suggesting that more information to this group about the emission impacts of their food choices can lead to significant margins of improvement."
