Meat Companies Could Face $11 Billion Carbon Tax Bill, Says Report

'There’s increasing consensus that we cannot achieve the Paris Climate Agreement unless we deal with factory farming'
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Policy makers are starting to look at the environmental impact of meat, says a new report 

Policy makers are starting to look at the environmental impact of meat, says a new report 

There is a 'gathering momentum to include farm animal emissions in carbon pricing and other tax regimes' as policy-makers seek to reduce the sector’s harmful impacts on the environment and human health, according to a new report.

The report titled The Livestock Levy: Update report*, was produced by FAIRR, a global network of investors managing over $20 trillion of assets.

Report

According to FAIRR, the report builds on its 2017 White Paper on the issue of meat taxation, and assesses recent policy discussions on the issue of extra taxes on meat.

These include a study commissioned by the Dutch Government into ‘fair meat prices’ and the Climate Change Response (Emissions Trading Reform) Amendment Bill in New Zealand, which means livestock emissions at the farm level will be taxed within the country’s Emissions Trading Schemes from 2025.

The report also looks at how the environmental impact of meat has become particularly pressing for policymakers, alongside the public health concerns of animal farming, raised by the COVID-19 pandemic, as the virus is zoonotic.

In addition, the report looks at transition crops, saying that 'progressive legislation will likely tie incoming revenues from meat taxes to specific societal benefits such as lower prices of fruit and vegetables or support to farmers to help transition to more climate-friendly produce'.

'We have to deal with factory farming'

In a statement sent to Plant Based News, Jeremy Coller, founder of FAIRR and Chief Investment Officer of Coller Capital said: "There’s increasing consensus that we cannot achieve the Paris Climate Agreement unless we deal with factory farming - a sector emitting more greenhouse gases than all the world’s planes, trains, and cars put together.

"That’s driving gathering momentum in policy circles to apply carbon taxes to the meat industry. The New Zealand government has legislated to measure and price emissions from farms from 2025, and there is clear risk for the sector that other regulators will follow suit. Investors are starting to price this market event into their long-term valuations of meat companies, using FAIRR’s Climate Risk Tool.

“A root cause analysis of the COVID-19 pandemic is likely to show the urgent need for the meat and fish industry to improve biosecurity and screening practices. Who pays? In the post-COVID landscape there is a risk that governments may stop subsidizing animal agriculture, and start taxing it instead."

'The real costs of pollution'

Jeroom Remmers, Director of the True Animal Protein Price Coalition (TAPP), added: "Since FAIRR's 2017 report on meat taxation, the conversation around pricing meat across Europe has shifted completely. Crucially, The TAPP Coalition has found that the majority of consumers will now support meat taxes, if other food products like vegetables are lowered in price, and policymakers like the EU Commission are more receptive than ever.

"It's vital that investors like the FAIRR network get behind the cause and use their influence to ensure that food prices reflect the real costs of pollution, emissions and deforestation in their supply chains." 

*The full Livestock Levy: An update report is available upon request from FAIRR.

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