Environmental impacts of household food consumption and the efficiency of a carbon tax

The agriculture, forest and other land use (AFOLU) sector is responsible for roughly one quarter of the anthropogenic global GHG emissions. Agriculture is the main driver in the AFOLU sector, as agricultural products such as food, biofuels and raw materials drive both deforestation and other land use change. Food is by far the main driver of the agricultural products, and is therefore a key target for mitigation measures. A carbon tax is a policy instrument that can be used to mitigate carbon footprints (CFs) by increasing costs that consequently lead to changes in demand. In this thesis, a supply tax of 100 /tCO2-eq is added to the meat and dairy industries in the EU, Switzerland and Norway, with the aim of mitigating GHG emissions from the AFOLU sector. By adding a tax on the suppliers, both the supply- and the demand side are targeted, as it is anticipated that the producers will fully pass on the increase in cost, resulting in higher prices in the grocery store. A revenue neutral tax is assumed, as the tax revenue goes to lowering income taxes, generating a so-called double dividend. A multi-regional input-output (MRIO) analysis is used to find the mitigation potential of a such a tax by modelling the change in carbon footprint related to the changes in demand following price increases, using both price and income elasticities. Contrary to similar studies, this analysis also considers the rebound effects from a changed diet cost and that of changes in income from the recycled tax revenue. A reduction of 2% on average, relative to the total household footprint from the EU, Switzerland and Norway was obtained. The supply tax also generated a positive effect on both employment and value added of 0.4% and 0.7% respectively