Greenhouse Gas Taxes on Meat Products: A Legal Perspective

Abstract

Meat production and the transport sector contribute almost equally to global warming. However, unlike the transport sector, in terms of climate change policies meat production is relatively unregulated. Many scientists have called for a meat tax as a means of reducing consumption but governments and politicians have not responded. Has the law been an obstacle to the acceptance of a meat tax? To address that question, this article analyzes three examples of European Union (EU) taxes that could be imposed on the consumption of domestic and imported meat, and examines them in relation to the international climate change regime, human rights law, and the legal regimes of the World Trade Organization and the EU. It shows that, if carefully designed, an EU meat tax is consistent with these bodies of law. To address adequately the industrial sectors that give rise to global warming, governments will need to overcome the taboo relating to the concept of a meat tax.

1. INTRODUCTION

For climate change to be addressed effectively, urgent action is required from all industry sectors.¹ Yet, in spite of the significant contribution of meat production to global greenhouse gas (GHG) emissions (ranging from 14.5%² to 51%³), this sector is relatively unregulated.

From a purely scientific perspective, this regulatory shortfall is surprising.⁴ Firstly, sectors emitting at comparable levels, such as transport, are highly regulated.⁵ Secondly, it is expected that by 2050, GHG emissions from European Union (EU) agriculture will rise significantly and eventually represent a third of total EU emissions.⁶ Thirdly, a significant reduction in livestock would reduce GHG emissions relatively quickly compared with measures involving renewable energy and energy efficiency:⁷ methane, the major GHG associated with livestock, is 23 times more warming to the atmosphere than carbon dioxide (CO₂), and has a half-life of only about eight years in the atmosphere compared to at least a hundred years for CO₂.⁸ Fourthly, substituting for meat products is a comparatively easy and cost-effective way to reduce GHG emissions.⁹ Lastly, reducing meat production would have a number of other environmental benefits: raising livestock is the largest of all anthropogenic land uses, is responsible for over 8% of global human water use, and is a key factor in the loss of species.¹⁰

On the other hand, from an economic as well as a socio-cultural and political perspective, this regulatory shortfall is entirely understandable. Meat is a favourite food across the world.¹¹ Moreover, taxes are politically unpopular with interest groups such as livestock lobbies, so policy makers tend to provide subsidies for ‘clean’ and ‘green’ technologies rather than putting a price on carbon emissions.¹² The EU’s approach to climate change regulation generally favours win-win situations in which regulation creates economic opportunities.¹³ With regard to agricultural policies, the EU focuses on better fodder, improved livestock productivity, maximizing the benefits of extensive farming,¹⁴ and so forth – in short, measures in which innovation may yield economic benefits.

Politically, it has been easier to justify measures to reduce carbon emissions in the transport sector than in the agricultural sector. Besides promoting innovation, regulation in the transport sector can rely on the well known and far reaching problem of dependency on fossil fuels. Moreover, such regulation complements existing air quality measures to yield improved air quality in cities, as well as other health benefits.¹⁵

Reducing meat consumption would also come with many positive side effects, yet political discussion along these lines is only just beginning. Swedish authorities, in 2013, proposed a first-of-its-kind meat tax to reduce meat consumption on grounds of climate change,¹⁶ and the EU’s ‘roadmap to 2050’ also mentions that it would be desirable to re-orient consumption towards less carbon intensive food.¹⁷

Against this background, this article will aim to address legal issues concerning three possible designs of a hypothetical EU tax on consumption of domestic and imported meat. Particular focus will be placed on international climate change law, World Trade Organization (WTO) law, human rights law and EU law.

Section 2 explains why I use the example of a hypothetical tax on consumption of domestic and imported meat. Section 3 analyzes whether such a meat tax would withstand international climate change and trade law. Section 4 examines whether a meat tax is in accordance with European environmental law and the general EU principle of proportionality, and Section 5 asks whether a meat tax is in accordance with the human right to eat. Conclusions are presented in Section 6.

2. EU MEAT TAX ON CONSUMPTION

Meat consumption in the context of climate change could be regulated in various ways. This article uses the example of a hypothetical EU tax on meat consumption for each category¹⁸ of domestic and imported meat. It could be levied on:

• ∙ average GHG emissions per unit for each category of meat for all producers on entire markets ¹⁹ (Type 1); or

• ∙ uniformly based on average GHG emissions per unit for each category of meat (Type 2); or on

• ∙ actual GHG emissions per unit of meat of individual producers (Type 3).

This section will address the legal implications of such regulation.

The first reason for utilizing the example of a tax on meat consumption within the European Union is that meat consumption, which is typically connected with the average income in a country,²⁰ is significantly higher in developed countries than it is in developing countries. Meat consumption per person in 2009 was 84.80 kilogrammes (kg) in the EU, 17.6 kg across Africa and 4.4 kg in India.²¹ Secondly, the EU is clearly willing to take action to mitigate climate change, as evidenced by its offers to reduce GHG emissions by 40% by 2030 compared with 1990 levels,²² and by its prioritization of climate change among global environmental issues.²³ Thirdly, there have already been calls within the EU to introduce a meat tax to mitigate climate change: the Swedish authorities have proposed a meat tax to reduce consumption²⁴ and, in its ‘roadmap’ to 2050, the EU mentions that ‘re-orienting consumption towards less carbon intensive food would be desirable’.²⁵

I propose a tax on meat despite the fact that, in principle, all categories of food could be subject to taxes on GHG emissions.²⁶ One reason for this is that a tax on meat promises to be an efficient means of mitigating climate change.²⁷ Meat alternatives cause only a fraction of the GHG emissions caused by meat.²⁸ Similarly, vegetable foodstuffs are excluded because of their much lower GHG emissions per food unit and their lower elasticities.²⁹ Furthermore, within the EU meat is responsible for 20 times more emissions per kg than milk.³⁰ Lastly, it would also be an effective measure: tests by the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO) on the global agricultural sector³¹ have confirmed that consumption, and therefore GHG emissions, would fall with the introduction of a meat tax. It is estimated that a 7% reduction in current GHG emissions in EU agriculture could be achieved if €60 per tonne of CO₂-equivalent was added to the price.³²

The first reason underlying my proposal for a tax is that a Pigovian tax is consistent with the regulatory emphasis on economic incentives in the Kyoto Protocol.³³ Economic incentives have a number of important economic and environmental advantages over command regulation.³⁴ Firstly, command and control regulation is rarely politically feasible. Secondly, the existing market failure – excessive meat consumption is attributable to the fact that the meat industry and meat consumers do not internalize the consequences of their GHG emissions³⁵ – could be relatively easily resolved by governments through taxation.³⁶ Thirdly, taxes provide signals to ‘get the prices right’.³⁷

Getting the prices right would imply taxation to be levied on actual GHG emissions per kg of meat. This would mean designing the meat tax as an emissions tax as opposed to an output tax. For the latter, the content of GHG emissions is related to but not perfectly correlated with the emissions.³⁸ However, a meat tax on output is preferable to a tax on actual emissions³⁹ because of high monitoring costs, limited options for reducing emissions apart from reduced production (technical potential is limited), and high substitution possibilities.⁴⁰ Thus, a better option is an output tax that is differentiated depending on the GHG emission levels per unit of meat for each category of meat, which is based on average emission levels for all meat producers within an entire market, rather than on specific emission levels of individual producers.⁴¹ In this spirit, Swedish authorities have suggested a tax of €1.50 per kg of beef.⁴²

That said, because the competitiveness of the EU agricultural sector is likely to be affected by the implementation of unilateral environmental taxes,⁴³ and because of the possibility of carbon leakage, it is crucial to levy the meat tax on both domestic and imported meat (through border tax adjustment on imports⁴⁴). Therefore, the tax should be imposed on consumption rather than production.⁴⁵ Since meat is an everyday product with a relatively short shelf life, we may presume that the risk of the emergence of an unregulated market in untaxed meat within the regulated jurisdiction is small. However, even where taxes are levied on consumption, carbon leakage cannot be entirely avoided because decreased demand for meat within the EU would reduce world meat prices and result in increased meat consumption in non-EU countries.⁴⁶ It is thought that if the EU reduces meat consumption by 20%, international livestock prices would be reduced by between 3% and 11%, which would cause meat consumption in the rest of the world to rise slightly.⁴⁷

The following sections will analyze whether a meat tax on the consumption of domestic and exported meat (hereinafter ‘the meat tax’) is legally permissible,⁴⁸ covering both the possibility of an output tax (levied on average GHG emissions per unit of meat category) and an emissions tax (levied on the actual GHG emissions).

3. A MEAT TAX UNDER INTERNATIONAL LAW

3.1. Conflict with International Climate Change Regulation?

Within the United Nations Framework Convention on Climate Change (UNFCCC)⁴⁹ all parties have committed to implement national and regional programmes to mitigate climate change⁵⁰ in all relevant sectors, including agriculture.⁵¹ Developed countries, such as those within the EU, are obliged to adopt policies to limit their GHG emissions to return to earlier levels of anthropogenic emissions.⁵² Some see this obligation as binding.⁵³ Although the UNFCCC is silent on how this return to earlier levels should be achieved,⁵⁴ it does regard measures in the agricultural sector as relevant⁵⁵ and it explicitly allows for unilateral measures.⁵⁶ Unilateral mitigation measures in the agricultural sector are thus supported by the UNFCCC as long as they are in accordance with the ‘polluter pays’ principle and the principle of common but differentiated responsibilities, and provided there is no ‘arbitrary or unjustified discrimination or disguised restriction on international trade’ (Article 3(5) UNFCCC).

Clearly, a meat tax would be an application of the ‘polluter pays’ principle, according to which those who cause damage to the environment should bear the cost of rectifying that damage,⁵⁷ and taxes are an important means of promoting this principle.⁵⁸ Although the ‘polluter pays’ principle is not explicitly mentioned in the UNFCCC,⁵⁹ it is regarded by many as a customary rule of international law⁶⁰ and is therefore commonly associated with the UNFCCC.

Principle of common but differentiated responsibilities

On the other hand, a key principle in the climate change regime (albeit not legally enforceable⁶¹) is the principle of common but differentiated responsibilities.⁶² Article 3(1) UNFCCC states that ‘[t]he Parties should protect the climate system … in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse effects thereof’. In implementing measures within the EU to combat climate change, this principle of common but differentiated responsibilities has to be taken ‘into account’.⁶³ The principle includes two elements: on the one hand, the common responsibility of states with regard to the ‘change in the Earth’s climate and its adverse effects’, which is a common concern of humankind;⁶⁴ and, on the other hand, the contribution of each individual state to the creation of particular environmental problems and their individual abilities to prevent, reduce, and control the threat. In practice, the latter leads to environmental standards which impose differing obligations on states.⁶⁵

All three types of a meat tax would affect the quantity of meat sales – and therefore the GHG emissions of meat production – not only within the EU (with regard to domestic products) but also from developing countries. It could be argued, therefore, that such a tax would place a disproportionate burden on developing states as they have lesser obligations to fulfil. For example, with regard to the (currently suspended⁶⁶) EU aviation scheme, which included EU and non-EU airlines alike, the EU was accused of failing to reflect adequately the principle of common but differentiated responsibilities.⁶⁷

However, unlike the aviation scheme, a meat tax would not impose any obligations on meat producers within developing countries.⁶⁸ Moreover, it would not require developing countries to adopt GHG mitigation policies that are comparable in effect with those adopted by developed countries.⁶⁹ Furthermore, the wider context should always be kept in mind: the ultimate objective of the UNFCCC is to identify the best way to avoid dangerous anthropogenic climate change.⁷⁰ Moreover, the UNFCCC requires developed countries, on the basis of specific commitments,⁷¹ to provide financial assistance, to transfer technology, and to build capacity to support the implementation of adaptation action in developing countries.⁷² It does not prohibit unilateral measures that potentially affect developing countries.

Therefore, so as not to undermine developing countries’ faith in the UNFCCC,⁷³ differentiated responsibilities should be accomplished by other means. This could be achieved, for example, by transferring tax revenue to the developing countries, enabling them to implement technical GHG emissions reduction measures.⁷⁴ Moreover, removing subsidies to domestic producers could help to mitigate poverty and socio-economic inequality within many of these developing countries.⁷⁵

Unilateral trade measures under Article 3(5) UNFCCC

What is the meaning of Article 3(5) UNFCCC in the context of the climate change regime? Does it prohibit a meat tax? The clause that ‘unilateral trade measures should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade’⁷⁶ is neutral in effect, as it does not define the types of trade measure that constitute ‘arbitrary or unjustifiable’ discrimination or are a ‘disguised restriction on trade’.⁷⁷ Hertel states that the concrete answer to this question was left for UNFCCC parties to determine at a later stage.⁷⁸ Guidance could be sought from the WTO regime: the wording of Article 3(5) UNFCCC and the chapeau of Article XX of the General Agreement on Tariffs and Trade (GATT)⁷⁹ are similar, and some argue that the two provisions should be interpreted similarly.⁸⁰ However, the scope of Article 3(5) UNFCCC cannot be broader than Article XX GATT because the clause was included in the UNFCCC to ensure that mitigation measures taken by parties are consistent with the principles of the WTO regime.⁸¹ In addition, the UNFCCC aims primarily to mitigate climate change. Logically, it cannot then go further in protecting free trade than WTO laws, which aim primarily to protect free trade unless explicitly stated otherwise. Thus, if unilateral trade measures are compliant with GATT rules or justified under Article XX GATT,⁸² no separate issues arise under Article 3(5) UNFCCC.⁸³

A meat tax under the Kyoto Protocol

The meat tax is in accordance with the Kyoto Protocol, which covers the gases emitted by livestock production⁸⁴ and explicitly includes the agricultural sector.⁸⁵ The measures named in the Protocol to reach its targets for Annex I countries are either national measures⁸⁶or are ‘market mechanisms’, which consist of emissions trading, Joint Implementation, and the Clean Development Mechanism.⁸⁷ A regulation of the consumption of meat through a meat tax could qualify as a national measure. The EU might hesitate to implement measures that cause extraterritorial GHG reductions as they do not count towards its own emissions reduction target,⁸⁸ but the Kyoto Protocol does not prohibit such a tax. The same applies to the Doha Amendment to the Protocol.⁸⁹

3.2. A Barrier to International Free Trade?

A meat tax must not only be in accordance with the international climate change regime, but also with WTO law. This regime is completely independent of the international climate change regime.⁹⁰ However, following the Vienna Convention,⁹¹ the UNFCCC and the Kyoto Protocol could be applied in interpreting the rules of WTO law.⁹²

If the EU were to act to mitigate global climate change with a meat tax, this would raise the following issues in WTO law. In the first place, when a tax is imposed the revenue gain to the importing country will generally be lower than would be the case without such a tax, and the EU is therefore implicitly expanding its mitigation efforts to countries outside the EU. Secondly, transaction costs of taxation arise. These costs are not limited to the government in its role as tax collector, but extend indirectly to international meat producers.⁹³ Finally, food production in non-EU countries sometimes causes higher GHG emissions than equivalent production within the EU. This is especially true of cattle meat production in the tropics.⁹⁴ Thus, if a meat tax results in a higher burden for such countries, de facto discrimination might arise.

As meat is an agricultural product, the question arises whether the applicable law within the WTO framework covers only the GATT or includes the Agreement on Agriculture (AoA).⁹⁵ For a long time, agriculture had been accorded special treatment in the GATT.⁹⁶ The Uruguay Round of the AoA marked a systemic shift⁹⁷ and made important strides in creating open markets for agricultural products.⁹⁸ It established binding commitments in three areas: reductions in farm export subsidies,⁹⁹ an increase in import market access for developing countries,¹⁰⁰ and cuts in domestic producer subsidies in developed countries.¹⁰¹ In areas not specifically covered by the AoA, the provisions of the GATT apply.¹⁰²

A tax on meat consumption is neither a domestic producer subsidy nor an export subsidy.¹⁰³ Furthermore, the AoA Market Access provision¹⁰⁴ could even facilitate the imposition of a meat tax: a country that applies tariffs below the bound rates that resulted from the AoA may increase those without violating its commitments.¹⁰⁵ However, even then the most-favoured treatment principle applies.¹⁰⁶ Essentially, if a meat tax was found to be compliant with the GATT, no separate issues would arise under the AoA.

Unilateral trade measures such as an EU meat tax on domestic and imported meat are permissible under certain circumstances according to the rules of the GATT. Firstly, they must be eligible for border tax adjustment. Secondly, they may not discriminate between imports from another country and the country’s own products (‘national treatment’: Article III GATT). Similarly, all other countries must be treated equally (‘most-favoured nation’:¹⁰⁷ Article I GATT).¹⁰⁸ Thirdly, if a violation of GATT non-discrimination rules occurs, justification must be sought under the general exception clause of Article XX GATT.

Eligibility of meat tax for border tax adjustment

Only indirect taxes – taxes that are applied to products and not producers – may be adjusted at the border.¹⁰⁹ Only these taxes incorporate the ‘destination principle’ (that products should be taxed only in the country of consumption) reflected by the provisions of the GATT in respect of border tax adjustments.¹¹⁰

When a tax is uniformly levied on demand of a certain product, it may qualify as an indirect tax adjustable at the border under Articles II:2(a) and III:2 GATT.¹¹¹ Border tax adjustment is normal international practice in such cases.¹¹² For example, many countries adjust domestic taxes on cigarettes, alcohol or fossil fuels.¹¹³

However, if a tax were to be levied on the GHG emissions associated with a certain product rather than on the product itself, the situation would be less clear. There is no case law so far that answers the question of whether such taxes could still qualify as indirect taxes (and therefore as taxes ‘on the product’). In the US – Superfund case, the WTO Dispute Settlement Panel left open the question of whether or not input, to which the tax is applied, must be physically present in the final product.¹¹⁴ Academic views with regard to carbon taxes differ.¹¹⁵ In Mexico – Taxes on Soft Drinks, the Panel found that Article III:2 GATT ‘requires some connection, even if indirect, between the respective taxes (…), on the one hand, and the taxed product, on the other’.¹¹⁶ Most authors argue that carbon taxes (and the same must apply to GHG emission taxes) are indirect product taxes, provided there is a ‘nexus’ between tax and product.¹¹⁷ There is a close nexus between a meat tax and meat products for two reasons. Firstly, the tax is paid by consumers and not by producers, which is a characteristic of an indirect tax. Secondly, by internalizing the social cost of carbon, the intention is to limit the consumption of GHG-emission intensive products like meat.¹¹⁸ Arguably, therefore, a WTO Dispute Settlement Panel would see all three types of the meat tax as eligible for border tax adjustment.

National treatment

To be WTO-compliant, a meat tax must be consistent with the national treatment obligation under Article III:2 GATT.¹¹⁹ To this end, it must first be examined whether the domestic and the imported products are ‘like products’.¹²⁰ Secondly, it must be determined whether domestic and imported like products are treated differently.¹²¹ Under a meat tax uniformly levied on average GHG emissions per unit for each category of domestic and imported meat, no distinction is drawn between imported and domestic products. For this type of tax, no issues arise under the national treatment obligation. Consequently, the following remarks relate only to scenarios in which a meat tax is levied on actual or on market-based average GHG emissions of a certain meat product, and the tax is higher for imported products (meat from the tropics, for example) than for domestic products.

To determine whether products are considered ‘like products’, four categories of ‘characteristics’ that products might share have been formulated: (i) their physical properties; (ii) consumers’ tastes and habits; (iii) the products’ end-uses in a certain market; and (iv) the international classification of products for tariff purposes.¹²² Within these parameters, are GHG-intensive meat (from the tropics, for example) and domestic low-GHG meat ‘like’ products? Can differences in the way in which two products are produced (so-called ‘non product-related processes and production methods’ (PPMs)) prevent them from being ‘like products’ even if they share all the relevant characteristics (apart from possibly consumer preferences), and even though GHG emissions are not traceable in the final meat product?

In EC – Asbestos, the Appellate Body found health concerns in the form of consumer tastes and habits to be a decisive factor in assessing the likeness between asbestos and other types of industry fibre.¹²³ In Automobile Taxes, the Panel held that high-fuel efficient cars are not ‘like’ gas-guzzling cars.¹²⁴ The Panel thus legitimized such regulatory distinctions.¹²⁵ From these cases, it is arguable that if a product pollutes it is not ‘like’ the climate friendly product even if the products are physically alike.

It is, however, questionable whether a claim that GHG-intensive meat is unlike low-GHG meat would stick. Consumer tastes and habits with regard to consumption of GHG-intensive meat are not clear, despite the fact that the environmental risk of meat production is confirmed by extensive scientific evidence.¹²⁶ In a survey conducted by the leading German news magazine, Der Spiegel, asking readers’ views on the regulation of meat consumption through a tax, 68.72% of 15,769 people favoured such a tax.¹²⁷ This indicates a preference for low-GHG meat. On the other hand, a study by the European Commission revealed that only 12% of EU consumers look for climate friendly meat.¹²⁸ Kysar and Vandenbergh state that this is because public awareness of the relationship between consumption and climate change is seriously lacking.¹²⁹ Furthermore, a 2006 FAO Report suggests that society is inadequately informed and lacks sufficient understanding about the scope of the problem.¹³⁰ So far, there is no case law on whether the protection of the environment is a relevant consideration in examining the likeness of products. Overall, it cannot therefore be excluded that GHG-intensive meat (whether measured on market average or actual GHG emissions) and low-GHG meat would be found to be ‘like’ products.

If that is the case, GHG-intensive meat must not be taxed in excess of low-GHG meat (Article III:2 GATT), otherwise a violation of the national treatment principle will be presumed.¹³¹ ‘Not in excess’ does not even allow for a de minimis difference in the tax rate.¹³² However, justification of a meat tax levied on actual or market-based GHG emissions that apply different tax rates could still be sought under Article XX GATT.

Most-favoured nation

A meat tax must be consistent with the most-favoured nation treatment obligation under Article I GATT, which states that a WTO member must give imported like products from all WTO members the same benefits as are given to like products from any other country.¹³³ With a meat tax uniformly levied on average GHG emissions per unit for each category of domestic and imported meat, no distinction is drawn based on the origin of imported products. Clearly, if a meat tax were to be levied on average emissions levels for all meat producers within certain markets, this would infringe the most-favoured nation principle and would need to be justified under Article XX GATT.

A meat tax levied on actual GHG emissions of a certain meat product needs further analysis. Certainly, origin-based differentiation between like products violates the most-favoured nation principle. The WTO Dispute Settlement Panel has held that a derogation from this principle ‘cannot be made conditional on any criteria that are not related to the imported product itself’.¹³⁴ With respect to conditions completely unrelated to origin (such as PPMs) the Panel may find such conditions permissible for derogation under the most-favoured nation principle¹³⁵ in the light of the Panel statement in Canada – Autos.¹³⁶ Thus, GHG emission-related differentiation between meat products, regardless of the country of origination, would not violate the most-favoured nation principle.

Justification under Article XX GATT

Meat taxes levied on actual GHG emissions of certain meat products, as well as meat taxes levied on average GHG emissions on certain markets, would potentially violate the GATT non-discrimination rules and would therefore need to be justified on the basis of Article XX GATT. There is scope for justification under Article XX(g), which allows Member States to adopt policy measures that relate to the conservation of exhaustible natural resources or, alternatively, under Article XX(b), which allows policy measures that are necessary to protect human, animal or plant life or health. If the measure falls within one of these exceptions, it must also fulfil the requirement of the introductory paragraph (the ‘chapeau’ of Article XX GATT). To be permitted under the chapeau, a measure must not cause unjustified or arbitrary discrimination between countries where the same conditions prevail or create a disguised restriction on international trade.

Although climate change mitigation measures have not yet been discussed by WTO bodies,¹³⁷ it is likely that a meat tax to mitigate climate change could be justified under Article XX(b) and/or (g) GATT. For example, in US − Gasoline the Panel agreed that a policy to reduce air pollution resulting from the consumption of gasoline concerned the protection of human, animal, and plant life or health (XX(b))¹³⁸and found clean air to be an exhaustible natural resource (XX(g)).¹³⁹

It would be harder for a meat tax to pass Article XX(b) given the necessity test, which is far more stringent than the ‘relating to’ test of XX(g).¹⁴⁰ In relation to Article XX(g), the Panel in US − Gasoline found clean air to be an exhaustible natural resource because it was natural and a resource (in that it had value). Although renewable, the Panel felt it could be depleted and was therefore exhaustible.¹⁴¹ Since climate is defined as the atmospheric conditions over longer periods of time (or average weather conditions), it is arguably analogous to air quality.¹⁴² Furthermore, mitigation measures do not aim to protect just the planet’s atmosphere, but also to protect plant and animal species that may disappear as a result of global warming.¹⁴³ Therefore, a stable climate could be considered an ‘exhaustible natural resource’.

The fact that a meat tax on consumption of domestic and imported meat would also address GHG emissions emitted outside the EU does not necessarily work against such regulation. All that is required is a ‘sufficient nexus’ between the GHG emissions in the importing country and the climate change consequences of such GHG emissions for the EU.¹⁴⁴ This nexus can be established relatively easily: in US − Shrimp, the United States (US) was permitted to protect turtles in India.¹⁴⁵ As the world’s atmosphere is a global commons and GHG emissions of importing countries cross territorial borders,¹⁴⁶ climate change caused by GHG emissions from meat production affects not only importing countries, but the EU as well.

The ‘relating to’ test of Article XX(g) GATT requires ‘a close and genuine relationship of ends and means’ and that the measure is not ‘disproportionately wide in scope and reach in relation to the policy objective of protection and conservation’.¹⁴⁷ An EU meat tax that puts GHG restrictions on the consumption of imported (and domestic) meat for the conservation of the planet’s atmosphere and related climate seems to accurately reflect that relationship.¹⁴⁸ Based on cases such as US − Shrimp and US – Gasoline, where the test was easily met, climate change legislation should normally pass the ‘related to’ test unless there are blatant inconsistencies or protectionist features in the legislation.¹⁴⁹ It is by no means necessary to prove that no less restrictive measures exist or that mitigating climate change is the sole purpose of the measure.¹⁵⁰

According to Article XX(g) GATT, climate legislation on imports must also be ‘made effective in conjunction with restrictions on domestic production and consumption’ (‘even-handedness’).¹⁵¹ As long as the EU imposes broadly similar taxes on domestic meat, this condition will be met: identical treatment is not required;¹⁵² otherwise, it is difficult to see how a violation of the national treatment rule would have arisen in the first place.¹⁵³ Thus, a meat tax on consumption of imported and domestic meat may differentiate insofar as the tax is levied on actual GHG emissions per unit of imported and domestic meat.

Finally, even if all of the conditions under the specific paragraph of Article XX(g) GATT were met, a meat tax that is to be found to violate GATT non-discrimination rules would also have to fulfil the requirements of the chapeau of Article XX.¹⁵⁴ The chapeau requires that ‘measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade’. A meat tax should fulfil the following conditions in order to comply with the chapeau.

Firstly, such a tax must be sufficiently flexible to avoid ‘arbitrary or unjustifiable discrimination’ and must take into consideration ‘prevailing different conditions in different foreign countries’.¹⁵⁵ This might force the EU to differentiate between countries that already have their own climate policies in place and others that do not.¹⁵⁶ Notably, different countries need not necessarily adopt exactly the same climate policies in order to achieve a reduction in GHG emissions.¹⁵⁷

Furthermore, some argue that the principle of common but differentiated responsibilities must be taken into account in interpreting the chapeau provisions. Arguably, this might require developed country parties such as the EU to differentiate between developing and other countries.¹⁵⁸ However, it does not follow that a meat tax would have to be substantially reduced or discarded. As discussed, there are less restrictive ways to cope with the principle.¹⁵⁹ Moreover, it is debatable whether the (historical) factors that set countries apart and warrant differentiation in the climate change context should qualify as ‘prevailing different conditions’ under the GATT.¹⁶⁰ This may be why the term ‘prevailing conditions’ does not feature in the otherwise similarly worded Article 3(5) UNFCCC. That said, whether a party is a member of the Kyoto Protocol is a relevant consideration when considering prevailing conditions. The fact that the EU ratified the Kyoto Protocol could compel the EU to exclude from its tax developing countries that have also ratified it, because developing countries have not (yet¹⁶¹) committed to emissions reduction.¹⁶² The EU already implements tariff preferences for goods coming from such countries if they have ‘effectively implemented’ the Kyoto Protocol.¹⁶³

Secondly, according to US − Shrimp, ‘good faith efforts’ would be needed from the EU to negotiate an international agreement with all countries affected before considering a unilateral approach.¹⁶⁴ Thus, the EU may have to propose a meat tax within, for example, UNFCCC negotiations. However, if negotiations fail, the EU could impose a meat tax unilaterally: the conclusion of multilateral agreements is not a prerequisite for justification under Article XX.¹⁶⁵

Lastly, the implementation of a meat tax must respect basic fairness and due process.¹⁶⁶ This includes hearing the concerned states and producers with regard to implemented climate policies and production processes.¹⁶⁷ Additionally, the meat tax must not constitute a ‘disguised restriction on international trade’, which means that the tax must not result in protectionism.¹⁶⁸

The difficulty of meeting the stringent requirements of the chapeau could be avoided if a meat tax was found to be non-discriminatory and, therefore, in accordance with the GATT rules. In that situation, the EU would not have to seek justification.¹⁶⁹ Consequently, it might be advisable to levy the meat tax uniformly on average emissions per unit of meat instead of levying it on actual GHG emissions or on average emissions in certain markets.

4. A MEAT TAX UNDER EU LAW

4.1. Conflict with EU Environmental Regulation?

In 2007, political agreement was reached on an EU-wide reduction in GHG emissions by 20% by 2020.¹⁷⁰ The EU Emissions Trading System (ETS) contributes towards this goal but covers less than half of the GHG emissions. Additional measures are therefore needed to cover the remaining emissions in areas such as agriculture and transport. The target for these sectors would be a 10% reduction in emissions from 2005 levels.¹⁷¹

The EU is competent to legislate in the areas of agriculture and the environment,¹⁷² provided the measures are proportionate¹⁷³ to the objectives of the Treaties.¹⁷⁴ Moreover, the sustainable development¹⁷⁵ of Europe and of the world¹⁷⁶ is one of the main goals of the EU. The objectives of EU environmental policy are, inter alia:

• ∙ to preserve, protect and improve the quality of the environment;

• ∙ to protect human health;

• ∙ to ensure the prudent and rational utilization of natural resources; and

• ∙ to promote measures at the international level to deal with regional or worldwide environmental problems and, in particular, to combat climate change.¹⁷⁷

A tax on the consumption of domestic and imported meat, as a means of reducing European and worldwide GHG emissions and thereby mitigating climate change, would clearly fall within this objective, as there are no substantive limits to the exercise of EU environmental competence.¹⁷⁸

Moreover, the EU legislator is obliged to apply the environmental principles of Article 191 TFEU and Article 11 TFEU to EU secondary legislation.¹⁷⁹ Article 191 TFEU states that EU policy on the environment shall aim at a high level of protection, while being precautionary and preventative. It further states that environmental damage should be rectified at the source and that the polluter should pay. These environmental principles have enabling and directive functions:¹⁸⁰ they enable policy makers to encroach on basic rights,¹⁸¹ and they direct policy makers to act comprehensively and deliver a high level of protection.¹⁸² The ‘polluter pays’ principle provides the basis for the use of fiscal instruments for environmental protection.¹⁸³ As interpreted in the EU, the principle posits that environmental protection should not depend on state aid or policies that place a burden on society. It should not target persons for eliminating pollution to which they did not contribute.¹⁸⁴ Thus, in the Standley case, the European Court of Justice (ECJ) stated that farmers are not obliged to bear all the costs associated with nitrate pollution, but only those caused by their own activities.¹⁸⁵

In order to pursue a high level of protection, and relying on the ‘polluter pays’ principle, the European Commission could take regulatory action through a tax on meat consumption. Indeed, it could be argued that there is a duty to regulate. Moreover, the precautionary principle substantially lowers the threshold needed for governments to justify action when faced with risks of unknown probability.¹⁸⁶ In any event, the threshold to justify governmental action towards climate change should be easily met since the risks of climate change are well documented.¹⁸⁷

However, the Commission has opted for an alternative approach to environmental protection through the Common Agricultural Policy (CAP).¹⁸⁸ One of the measures introduced to make farming ‘greener’ specifies that farmers obtain financial support only if they adopt sustainable practices to promote soil quality, biodiversity, crop diversification and healthy grassland.¹⁸⁹ It is questionable whether this measure, based on incentives for technical improvements, will be effective in mitigating climate change¹⁹⁰ compared with a meat tax.¹⁹¹ The ‘polluter pays’ principle is notably absent from this measure.

The approach is different from that applied towards the car industry. Although livestock emissions and emissions from transport produce approximately the same amount of GHG emissions,¹⁹² the car industry faces much stronger restrictions than does the meat industry. The car industry does not face a loss of financial aid if it fails to comply with environmental standards, but instead faces penalty payments (‘excess emissions premiums’)¹⁹³ if it does not comply with the mandatory CO₂ emission limits set in the Passenger Car Regulation. Furthermore, cars must be furnished with CO₂ emissions data.¹⁹⁴

In 2005, the Commission presented a proposal for a Directive that would require Member States to restructure their passenger car taxation systems to promote sustainability by reforming the tax bases to include elements related to CO₂ emissions of passenger cars.¹⁹⁵ It said that fiscal measures would represent a critical instrument in achieving CO₂ reduction targets.¹⁹⁶ Because passenger cars are a major source of GHG emissions, the introduction of a CO₂-sensitive element would be proportionate as it serves the need to achieve the global EC objective of reducing GHG emissions. It would also meet the Community’s commitments under the Kyoto Protocol.¹⁹⁷ The same arguments to promote sustainability could similarly be applied to a meat tax. Although the proposal found too much political resistance to move forward,¹⁹⁸ the obstacles to its adoption were of a political rather than a legal nature. As climate change awareness has grown, the prospects of success for a similar measure may have changed in the intervening years. Consequently, the environmental legal framework of the EU does not go against regulating the consumption of meat through taxation.

4.2. Violation of the General EU Principle of Proportionality?

Policy makers are not absolutely free to make choices about the distribution of a policy’s burdens and benefits; the principle of proportionality imposes limits on these choices.¹⁹⁹ The ECJ has held that, generally, the lawfulness of a Directive depends on whether it is appropriate and necessary to achieve the objectives legitimately pursued by the law and on whether the disadvantages caused are not disproportionate to the aims pursued.²⁰⁰ According to Javier de Cendra de Larragán, choices in climate change policies must stand in rational proportion towards the ends, must fulfil the need to achieve a rational proportion in the burden sharing between parties while not impinging in a disproportionate manner upon individual parties, and the decision-making process should involve all affected parties.²⁰¹ In general, legal principles do not require specific political outcomes or pre-determined distributions of burdens and benefits. However, distributional choices can be assessed against the principle of equality, which obliges policy makers to justify any departure from equality in their decision making.²⁰²

The principle of proportionality might prevent the regulation of meat consumption if a meat tax were to be considered unnecessary. There are three ways in which a regulation might be deemed unnecessary: by the existence of (i) other appropriate (technical) mitigating measures in the agricultural sector; (ii) appropriate regulatory measures (such as the ETS); or (iii) measures in other sectors that are judged to be sufficient to mitigate climate change.

The first possibility finds support in the 2006 FAO Report which suggests technical options for reducing GHG emissions from livestock.²⁰³ Technical options include sequestering carbon through improved pastures. For methane, the productivity and efficiency of livestock production can be improved through better nutrition and genetics and improved manure management. The best way to control N₂O is to maximize the efficiency of human nitrogen use.²⁰⁴ The FAO states that, if widely applied, these technical solutions could have a high impact on reducing GHG emissions.²⁰⁵ In its latest report, it estimates that a 30% reduction in GHG emissions from agriculture would be possible if producers used the technologies and practices with the lowest emissions intensity.²⁰⁶ However, such options are expensive.²⁰⁷

The EU plans to concentrate on economic incentives to encourage farmers to introduce technical measures that reduce GHG emissions per produced unit.²⁰⁸ However, it is not claimed that these economic incentives will suffice to mitigate climate change. The United Kingdom (UK) Department for Environment, Food & Rural Affairs (Defra) states that there is, in the longer term, limited scope for further reductions in GHG emissions because of the difficulty of delivering further efficiency from complex biological systems. Addressing these challenges would require great effort and a willingness to consider novel approaches.²⁰⁹ Some argue that output taxes on emission-intensive agricultural goods would be more efficient than technical measures in dealing with agricultural GHG emissions.²¹⁰

Thus, although technical mitigation measures exist, they are not a panacea for reducing GHG emissions in the agricultural sector to target levels. Hence, it is extremely unlikely that their existence would call into question the proportionality of a meat tax.

The second basis on which a meat tax might be deemed unnecessary is in the view that the Kyoto Protocol and the ETS (the ‘jewel in the EU crown’ of climate change instruments²¹¹) already represent a sufficiently strong system for climate change mitigation, so that there is no need for such a tax. However, these institutions have been highly criticized: Prins and his co-authors claim that the Kyoto Protocol has actually slowed the reduction of GHGs because it has created incentives to transfer production to areas like China with looser emissions norms, so that emissions have increased overall.²¹² They contend that Kyoto threatens to invert the ‘polluter pays’ principle into ‘pay the polluter’.²¹³ During the economic crisis, the efficiency of the Kyoto Protocol suffered even more. Prins and his colleagues name, as an example, the exclusion of eastern European countries because of their coal dependency.²¹⁴ According to Nordhaus, none of the policies that have been implemented to date are efficient. The current Kyoto Protocol is seriously flawed in its environmental rationale, is inefficiently designed, and is likely to be ineffective.²¹⁵ Similarly, Baldwin claims that the ETS, in the long term, slows the development of new technologies that may revolutionize environmental performance.²¹⁶ Thus, according to academic commentators, it is by no means certain that current ETSs are sufficient to mitigate climate change so as to render other measures unnecessary.

The efficiency of current ETSs does not render meat regulation unnecessary. Nevertheless, political decision makers seem to view a meat tax as an inappropriate means of reducing climate change, because of its perceived threat to the economy compared with an ETS, and because of their general reluctance to take measures which reduce consumption levels. Instead, political decision makers favour ETSs because they are attractive to different interests – they suit the economically powerful as well as weaker parties as they can sell allowances.²¹⁷ The Australian Labour government introduced carbon taxes in 2012. Both candidates for Prime Minister in the 2013 elections – Abbott and the Labour party candidate, Rudd – promised to abolish these taxes because they were perceived to have slowed down economic growth.²¹⁸ Rudd suggested an ETS instead.²¹⁹ Furthermore, although such systems are inadequate if growing consumption leads to absolute increases in GHG emissions, the solution so far has generally been to try and improve relative efficiency, rather than reducing absolute consumption levels.²²⁰

The third basis on which a meat tax might be regarded as disproportionate lies in the assumption that measures in sectors outside agriculture make regulation through a meat tax unnecessary. Globally, CO₂ emissions account for around 75% of the total anthropogenic emissions. As the energy sector contribution to CO₂ emissions is 75%, the main focus has been on reducing emissions in that sector.²²¹ According to the European Commission, this sector has a high reduction potential: 99% by 2050 compared with 49% for the agricultural sector. However, the latter percentage only takes into account technical measures, not consumption-related reductions.²²² Even though the Commission stresses the increasing importance of the agricultural sector in terms of climate policy²²³ and views the re-orientation of consumption towards less carbon intensive food as ‘desirable,’ it has not yet suggested the regulation of meat consumption. It states that if the agricultural sector does not achieve the projected emissions reduction, other sectors would need to reduce even further, despite high costs.²²⁴

Hence, political decision makers decided to impose the main burden of mitigation on the energy sector as the largest and most evident contributor of CO₂ emissions rather than on the agricultural sector in general and the meat industry in particular. They decided in terms of perceived effectiveness²²⁵ – the ‘necessity-need’²²⁶ – while disregarding measures leading to a reduction in consumption.

Nordhaus criticizes the fact that some sectors are favoured over others,²²⁷ which may suggest that the current approach is disproportionate. With regard to the distribution of reductions across industrial sectors, Nordhaus argues that it is important that the costs of emissions reduction are equalized across all sectors and countries. He suggests the imposition of harmonized carbon prices that apply everywhere, either through a universal carbon tax or a cap-and-trade system in which all countries and sectors participate so that all emissions are subject to trade.²²⁸ Near-universal participation in such programmes to reduce GHGs is crucial to avoid incurring substantial additional costs. Costs of abatement were very low for the initial reductions of GHGs but they would rise sharply for higher reductions.²²⁹ Hence, according to Nordhaus, the substantial exclusion rather than inclusion of the agricultural sector from mitigation measures could be qualified as disproportionate.

Finally, the proportionality requirement could prohibit a meat tax if it caused disadvantages to the consumer that were disproportionate to the aims pursued.²³⁰ In order to determine the tax rate, policy makers have to perform a difficult balancing act: the rate must be high enough to be effective, but must not be excessive. However, all Pigovian taxes face calibration difficulties, as Arthur Pigou himself admitted.²³¹ They should not of themselves deter such regulation, and do not in the case of other EU policies.²³²

5. A HUMAN RIGHT TO EAT MEAT?

Finally, the question must be addressed whether regulation of meat consumption through a meat tax would violate human rights (especially a ‘right to food’ and the right to private life).

Article 11 of the International Covenant on Economic, Social and Cultural Rights explicitly mentions a right to ‘adequate’ food.²³³ However, the right to adequate food is not to be interpreted expansively as, for example, mandating the availability of a minimum package of calories, proteins and other specific nutrients.²³⁴ Hence, an interpretation that there is a right to eat tax-free meat under Article 11 is far-fetched.

It could be argued that the consumption of meat is subsumed within the right to a private life.²³⁵ However, it is important to differentiate between a prohibition on eating meat and a tax on meat which results in more expensive meat. Privacy is a qualified right²³⁶ and may be restricted, for example, for the protection of health or for the protection of the rights of others, which could include the ‘right to a clean environment’.²³⁷ A further possible restriction on the right to privacy is the right to food itself. Livestock consume more from the total food supply than they provide: they consume 77 million tonnes of protein contained in feedstuff that could be consumed by humans, and provide only 58 million tonnes of protein in exchange. With regard to dietary energy, the relative loss is even higher.²³⁸ Thus, the need to secure food supply would support a reduction in meat consumption, in favour of alternative, higher yield foods. This is particularly important because of the expected negative impact of climate change on food supply.²³⁹

6. CONCLUDING REMARKS

It is clear that current efforts to stabilize GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system (Article 2 UNFCCC) are insufficient. Similarly, it seems clear that there are few climate change mitigation measures as simple, cost-effective, and with as many positive side effects as reducing meat consumption. In contrast to, for example, technical measures in the transport sector, this measure seems obvious. Yet, at a time when both vegetarianism and meat consumption are increasing, and food cultures are clashing, a meat tax is a highly contentious issue.

A state is not free in its regulatory choices regarding mitigating climate change. It is bound by legal restrictions as to the measures available and, at the same time, by its legal responsibility for environmental protection. This article concentrated on the former and discussed the legal implications of an EU tax on domestic and imported meat. It showed that the legal analysis depends on how the tax is to be levied, and that if carefully designed, a meat tax is proportionate and compatible with international and EU law.

This article has not discussed in any depth the question of whether the failure to regulate meat consumption would affect state responsibility for climate change damage. Nevertheless, this question should be kept in mind. The failure to implement a meat tax as a mitigation measure is not just a violation of the ‘polluter pays’ principle and the principle of equality. Conflict could occur with regard to the EU’s human rights duty to protect its citizens against climate disasters,²⁴⁰ and its duty not to cause transboundary harm.²⁴¹ Given the clear contribution of meat products to global warming and the equally clear foreseeability of the damaging consequences of climate change, the EU should seriously consider such a measure as a means of taking reasonable care²⁴² towards mitigating climate change.²⁴³ Finally, it is important to note that even if a meat tax does not materialize in the near future, many of the lessons emerging from this analysis are transferable to proposals regarding the taxation of other GHG-intensive consumption goods.