Carbon Labels and Taxes on Food Could Cut UK's National Emissions by 5%

A new study has found that displaying carbon footprints on product labels and taxing high-emission foods in supermarkets could collectively achieve a 10% reduction in the climate impact of shopping baskets in the UK.

The study, conducted by researchers at Italy's University of Trento and the UK's University of Exeter, simulated an online supermarket and asked around 5,000 Brits what they typically buy, and whether they would change their food choices if carbon labels and/or taxes were introduced.

The findings show that displaying a product's carbon footprint led to a 5.6% decrease in the emissions associated with the average food basket, which is equivalent to 2.7% of the UK's emissions.

| Measure | Reduction in Basket Emissions | | --- | --- | | Carbon labels | 5.6% | | Tax of £60 per tonne of CO2e | 10% | | Tax of £28 per tonne of CO2e with carbon labelling | 10% |

The study also found that a tax of £60 per tonne of CO2e on the most carbon-intensive products was nearly twice as effective, lowering basket emissions by 10% - however, this comes at an annual cost of £79 per person.

Reducing the tax rate to £28 per tonne of CO2e and combining the measure with carbon labelling would achieve a roughly 10% reduction, too - and would only cost £34 per person each year.

Even that cost, though, would be more than offset by the social benefits of lower GHG emissions and increased revenues for the public sector, the researchers argue.

## Meat in the Spotlight

The study highlighted disparities in the impact of carbon labels across consumer groups. Young people increase their demand for fruits, vegetables, starches, and poultry, while older respondents show only a slight increase in snack, beverage, and fish consumption.

Richer households cut back on cheese, beef, and lamb more than lower-income households, who instead bulk up their beverage purchases. And individuals buying larger amounts of meat lower their overall demand twice as much (-14%) compared to those who eat less meat (-7%).

The study found 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.

## Combining Carbon Labels with Taxes Can 'Eliminate Inequalities'

The study revealed that the carbon tax results in per capita losses of more than £180 per year for households with meat-rich diets. But that impact significantly decreases for other dietary groups: households eating less meat would face an annual cost of £30 per person, falling to £10 for vegetarians and to virtually no loss for vegans.

When combining the two policy measures, welfare losses are roughly halved for all groups. If a tax rebate is introduced, all dietary demographics witness a small welfare increase, barring heavy meat-eaters - even for the latter, though, the welfare loss is slashed by 40% compared to a scenario without reimbursement.

The researchers found that a tax-only system would render a monetary gain of £6 per person per year, while a scenario with just carbon labelling would put that figure at £8. Implementing the two together, however, raises this to £13.

The study suggests that combining carbon labels with taxes can 'eliminate inequalities' associated with the implementation of the tax, thus increasing the equity of the policy.