Epsilon Archive for Student Projects

Abstract

As the anthropogenic share of emissions from agricultural (GHG) emissions exceeds those of the transport sector, there is a profound need to start mitigating the climate impact from the agricultural sector. Eighty percent of emissions from Swedish livestock production emanate from beef production. The high emission intensity of beef production indicates that a weighted tax would capture a large share of its GHG emissions. The purpose of this paper is to investigate by how much a GHG emissions differentiated Pigouvian tax of beef placed on the consumer level would reduce the negative environmental impacts through reduced consumption. The method used is a partial equilibrium competitive model where a Pigouvian tax based on the carbon footprint of 1 kg beef is imposed on the consumer level. The carbon footprint of each production system is based on life cycle assessments. Four production methods of beef are investigated: domestic conventional production in Sweden, organic production in Sweden, beef imported from the EU and beef imported from Brazil. A basic sensitivity analysis for sensitivity ratios was performed on the elasticities to capture the uncertainty estimates of the model and their effect on output variables. Results show that the total beef consumption in Sweden was reduced by 7.88% and the total carbon footprint was reduced by 788 467 ton CO2 eq, thus indicating that a differentiated tax on beef placed on consumer level in an attempt to mitigate climate effects can be a cost-effective approach to abate GHG emissions.