Kerslake, Kemper, and Conroy (2022) on Meat Substitutes

Eleanor Kerslake, Joya A. Kemper, Denise Conroy, “What’s Your Beef with Meat Substitutes? Exploring Barriers and Facilitators for Meat Substitutes in Omnivores, Vegetarians, and Vegans.” Appetite 170: 105864, 2022.

• Meat substitutes are plant-based foods like Impossible Burgers or Beyond Sausages, which are intended to replicate some of the sensory characteristics of meat; chickpeas and tofu and seitan, by these lights, are not meat substitutes.

• For many people, meat is a search good, while meat substitutes are of recent vintage and are experience goods.

• The authors bring together 6 moderated focus groups, with between 5 to 7 members each. Two of the groups are comprised of omnivores; two of vegetarians; and two of vegans. All told, 35 New Zealanders take part, and together produce 346 pages of transcribed discussions. [But the small numbers in each focus group mean that a "finding" could be based on the comments of just two or three people.]

• Factors that facilitate the take-up of meat alternatives, according to the focus groups, include good packaging and labelling. A photo of the product is helpful, and, for vegans, explicit vegan and environmental certifications. 

• Meat substitutes are often tried out in restaurant or takeaway settings. Later, they might be purchased for home preparation and consumption. The restaurant test provides an endorsement, and perhaps then evidence that, at least with proper preparation, the unfamiliar item is palatable. 

• Barriers to take-up of meat substitutes include high prices: the “vegan tax.”

• The only partial resemblance to meat elicits, in some consumers, feelings of distrust towards meat substitutes.

• Some vegetarians and vegans are unimpressed when companies that produce lots of meat products expand into plant-based options: they view this behavior as “vegan washing.”

• “Tensions” are ambiguous properties of meat substitutes, which can facilitate for some consumers but pose a barrier to others. In this article, tensions far outnumber facilitators and barriers.

• The common view that vegans or vegetarians are judgmental can dissuade some omnivores from wanting to consume meat substitutes.

• The availability of meat substitutes at social events enhances inclusivity.

• Plant-based meats can be too meat-like for vegans, but too unlike meat for omnivores.

• Meat substitutes are sometimes seen as healthy, and sometimes as unhealthy.

Richter et al. (2023) on Swiss Views on Meat Reduction Policies

Sebastian Richter, Adrian Muller, Mathias Stolze, Isabelle Schneider, and Christian Schader, “Acceptance of Meat Reduction Policies in Switzerland.” iScience 26: 106129, March 17, 2023. 

• Stakeholders in the current food system in Switzerland (as well as elsewhere) might find some reforms aimed at reducing meat consumption to be more acceptable than other reforms. 

• From interviews with 25 stakeholders (political parties, food business associations, relevant government agencies – but not consumers), the authors compiled a list of 37 measures that could reduce meat consumption. 

• 23 stakeholders (including 13 from the original interviewee pool) then indicated their degree of acceptability for each of the 37 measures. For each policy reform, stakeholders indicated either approval; conditional approval (with explanation); rejection; or indifference. 

• The authors group the reforms into seven “types”, such as “voluntary measures” or “information measures”; various versions of incentives; regulations; and others. 

• Research funding, voluntary measures, and information measures all meet with high acceptance. Greater antibiotic control also generated little disapproval. 

•  “The measures most frequently rejected are the regulatory measures ‘mandatory limit on the share of meat products in the overall retail assortments’, ‘regulation of nudging for meat alternatives’ by the state as well as the financial incentives ‘VAT exemption for vegetable foods’, ‘increase VAT for meat products to >7.7%’ [p. 8].” 

• Coercive negative incentive measures (taxes, basically) meet with substantial rejection. 

• Nonprofits, research institutes, and state bodies are generally more accepting of meat-reducing measures; the food industry and political parties are among the most unenthusiastic. 

• Factors affecting acceptance include lead times and grace periods; clarity and transparency; and coherence among multiple policies. 

• Promotion of meat alternatives does not fare particularly well in terms of acceptance. 

• Coherent policy packages (including taxes with earmarked distributions of revenue) might be more acceptable than policies viewed in isolation (which is the approach to approval attitudes taken in this article).

Leitzel and Shaikh on Animal Standing in Cost-Benefit Analysis

This blog has been part of an effort to produce some social science papers concerning animal welfare and economics, and the first of those papers is now available: "The Economic Standing of Animals," by Jim Leitzel and Sabina Shaikh. The paper can be downloaded here. 

Abstract: 

Should nonhuman animals possess cost-benefit analysis (CBA) standing, and if so, to what extent? A lack of standing for animals does not mean that their interests are ignored; rather, it implies that their interests are only accounted for to the extent that those with standing – humans – feel some regard for animal welfare.

This paper addresses farm animal policy in the United States and looks at how CBAs are altered as animal interests range from “no standing” to “human-equivalent” standing. Even with no standing for animals, the degree of animal welfare offered by current animal agricultural practices is inefficiently low: human preferences for animal welfare are less than fully reflected in the economic and political marketplaces. Policies that counter existing shortcomings in the markets for animal welfare could be paired with transparency measures that would help ensure that consumers and voters are better informed about the conditions under which farmed animals are raised. Uncertainty concerning the appropriate degree of animal standing counsels for the avoidance of policies that would be highly undesirable if the proper extent of standing turns out to be significantly smaller or larger than expected.

Funke et al. (2021) on Optimal Meat Taxation

Franziska Funke, Linus Mattauch, Inge van den Bijgaart, Charles Godfray, Cameron Hepburn, David Klenert, Marco Springmann, and Nicolas Treich, "Is Meat Too Cheap? Towards Optimal Meat Taxation," March 9, 2021; available at https://ssrn.com/abstract=3801702 or http://dx.doi.org/10.2139/ssrn.3801702.

The descriptive phrase adorning the Animals and Econ blog is "Notes on animal welfare policy, with a somewhat economics-style sensibility," and the Funke et al. paper fits our little motto to a tee, while homing in on one topic we have recently been featuring: meat taxes. So here are some notes/observations concerning Funke et al. (2021)...

There are a host of externalities and internalities connected to the production and consumption of meat. Many of these issues in theory could admit direct, first-best solutions -- charge directly for the greenhouse gas emissions or alter the production method to curtail pollution, say -- but in their absence a tax on the consumption of meat pushes things in the right direction along many dimensions. Taxes imposed at the consumption stage also sidestep the problem that policies that raise domestic production costs can incentivize production to move abroad, in particular to jurisdictions with fewer protections against pollution or animal abuse. But a meat tax motivated by animal welfare concerns will not specifically target the worst abuses -- it might even apply to lab-grown meat, the production of which would entail little or no animal suffering.

The authors argue that, given the externalities, meat is severely underpriced. They recognize the usual wide range of externalities, and add one, biodiversity loss, that now is making its Animals and Econ debut. The health costs (in terms of increased mortality risk) from red and (especially) processed meat are staggering (for processed meat, more than $100 per kilogram), though the extent to which they are taken into account by meat eaters is unknown.

Some meat eaters prefer to avoid truthful but troubling information about farm animal welfare; higher prices (perhaps as a result of meat taxes) directly decrease meat consumption, with a knock-on effect of reducing the incentive to self-deceive.

Subsidies for meat substitutes can hasten and sustain the movement away from meat consumption. Among other dynamic effects, such subsidies can provide a commitment device for future policymakers. 

As for the appropriate size of meat taxes, the authors restrict themselves to accounting for global environmental externalities. (Local pollution, biodiversity loss, and animal welfare, therefore, are among the omitted dimensions.) These environmental effects alone suggest taxes that would increase the retail price of meat by some 20 to 60 percent in wealthy countries. Including health costs associated with beef consumption would triple the appropriate tax for beef. 

Now to go back to the Meat Tax Literature Summary post to include Funke et al. (2021)...

Taxing Meat 3 -- A Synopsis of the Literature

In this post I will attempt to characterize various analyses of a tax on meat, at least for for those analyses that already have received a post on Animals and Econ. For each of the contributions I will note their coverage, that is, whether they address externalities, and of what type (greenhouse gasses, water pollution, and so on); potential internalities (health costs from excessive meat consumption); the distinctions among externalities, budgetary externalities, and internalities; and animal welfare. I also will indicate any quantitative guidelines they make for the size of an appropriate meat tax, as well as any recommendations for alternative or supplementary policies.

Meatonomics (2013), by David Robinson Smith: Coverage: externalities, budgetary externalities, and internalities, without distinction, and for meat, eggs, and dairy. Tax suggestion: 50% ad valorem on all animal products. 

Springmann, Mason-D'Croz, Robinson, et al. (2018): Coverage: health internalities (treated as externalities), for red and processed meat. Tax suggestion: about 20% ad valorem on red meat, and 100% ad valorem on processed meats.

Forero-Cantor, Ribal, and Sanjuán (2020): Coverage: greenhouse gas emission externalities for pork, beef, chicken, turkey, lamb, eggs, and fish. Tax evaluation (not suggestion, really): 10% ad valorem tax on fish works well in reducing greenhouse gas emissions, and a 20% tax on beef, too. Taxes on turkey, chicken, and pork are not helpful in reducing greenhouse gasses. 

Katare, Wang, Lawing, Hao, Park, and Wetzstein (2020): Coverage:  "social cost of CO2, health costs, animal cruelty, and natural resource degradation;" the animal cruelty is about human willingness-to-pay for better animal welfare, not about any intrinsic value of animal well-being. Tax evaluation: an ad valorem meat (beef) tax of about 69% looks about right. The analysis involves a comparison with a labelling mandate, which might be OK in combination with a meat tax, but holds little promise on its own.

PETA: Coverage: health and environmental internalities and externalities (without making the distinction), and budgetary spillovers. Tax evaluation: about a 5% ad valorem tax? PETA notes that the serious costs of the current system are borne by the non-human animals. 

Funke et al. (2021): Coverage: on the quantitative side, the authors focus on global environmental effects (greenhouse gas emission); on the qualitative side, they cover the full range of externalities and internalities. Tax evaluation: a tax that raises retail prices by 20 to 60 percent internalizes the examined environmental externalities; it is highest for beef. Serious attention is paid to animal welfare concerns.

Taxing Meat 2 -- Alternatives?

The previous post outlines some of the externalities associated with meat consumption. One way to correct for externalities, and thereby to lead private decision makers (producers and consumers) to make decisions that serve the social interest, is to impose a corrective tax (a so-called Pigovian tax). A meat tax, whether of the sales or excise variety, for instance, might internalize the existing externalities and bring us to that economics nirvana of the socially optimal amount of meat consumption. Nonetheless, there might be other and better paths that land us in that happy place.

The direct subsidies to animal agriculture could be cut back or eliminated, for instance, as opposed to having them offset with a meat tax. For example, the fees charged for livestock grazing on public land could be raised considerably, and the subsidization rates for price protection could be reduced -- both of these subsidies were increased during the Trump era, so rollbacks to the situation of five years ago would themselves cut the current levels of taxpayer support. We can hope that the huge Covid and trade war payouts will become devoid of their raison d'etre. What is very unlikely is an elimination of the direct (to animal agriculture) and indirect (to corn, soybeans, etc.) government subsidization of animal agriculture. Farm subsidies are now longstanding, and not just in the US. WTO rules have served as a bit of a barrier on the extent of those subsidies, though they seemed to have no effect on either the trade war or Covid tranches. Still, eliminating the source of the market distortion seems to be the first route to explore, to the extent it is feasible, before adding a countervailing (taxation) program. The checkoff system would seem to be a good candidate for a feasible elimination of a distortionary program.

The environmental externalities (such as greenhouse gas emissions) associated with meat production also might be handled by aiming directly at the pollution, as opposed to implementing a meat tax. A meat tax in itself, for instance, will reduce the animal agriculture sector by raising retail prices and thereby curtailing demand, but it will not encourage cleaner methods of production for the meat that is processed. A direct anti-pollution policy might similarly reduce demand through higher prices, while also providing an incentive to produce with less pollution. (The large methane emissions associated with the production of meat from ruminants could be cut drastically without reducing the amount of animal agriculture, if the promise of a new seaweed-based feed supplement is fully realized.)

The overuse of antibiotics in animal agriculture also could be curtailed directly through stricter controls on production methods -- and as with greenhouse gasses, the global nature of the problem suggests a global intervention (pdf here). The health effects of overconsumption of meat might not be fully taken into account by the eaters themselves, so there is a potential "internality" case to be made for a meat tax -- but there also are alternative (or supplementary) policies, such as providing better information or subsidizing non-animal foods, that could work as well as a tax. These internalities, however, do present a situation in which the cause of the harm -- eating too much meat -- is addressed quite directly via the tax.

The animal welfare problems are not addressed most directly by a meat tax. As with the environmental effects, while a tax will reduce the animal welfare problems through reduced meat consumption and hence fewer suffering animals, the tax does not provide a spur to production methods that are less cruel. And if animals have direct standing in the social cost-benefit analysis, then the tax that would be requisite to internalize the harms imposed upon animals would amount to a prohibition of, at a minimum, current CAFO practices.

Taxing Meat I -- Externalities

My intention is to develop a series of posts on meat taxation, summarizing and building on earlier posts. This is the first in this exciting new series. (Warning: series not actually exciting.)

In the US, meat is subsidized fairly heavily, and in various senses. First, meat is an ultimate beneficiary of subsidies provided to crops: most of the corn grown in the US is fed to non-human animals or converted into ethanol, and the majority of the soybean harvest is used for animal feed (pdf here). So, any policies that support corn or soybeans provide substantial subsidies to meat agriculture, for which these crops are major inputs. Irrigation subsidies also promote corn and soybeans, so these are part of the indirect boost to animal agriculture, too.

Livestock husbandry receives various forms of direct subsidies, too. The USDA offers farmers insurance against livestock price decreases at significantly subsidized rates. Various disaster assistance programs are in place to help livestock producers when disease leads to excess morbidity or mortality, or grazing areas are undermined by bad weather, and so on (Congressional Research Service pdf here). Grazing fees for livestock on federally-owned lands are significantly subsidized. The Trump-era trade war with China led to substantial payments to the dairy and pork industries, while animal agriculture has received massive federal assistance during the Covid crisis (CRS report here). 

The animal agriculture sector features various "checkoff" programs; here's the website introducing the checkoff system for beef. The checkoff system sets up a scheme of mandatory contributions from producers for marketing purposes, which might be hard to understand as a subsidy. (That is, checkoff payments sound a lot like a tax.) Nevertheless, the checkoff system certainly can act as a subsidy, in that it allows the industry to act in concert (like a cartel) to provide industry-wide services -- a unified front which in other circumstances might violate antitrust rules or at least be undone by free-riding on the contributions of others. Checkoff programs have brought us well-known ads such as "Got Milk?" and "Pork. The Other White Meat." If you have noticed that your pizzas have gotten cheesier in recent years, you also might want to thank a checkoff program; indeed, the very existence of Domino's Wisconsin 6 Cheese Pizza owes a debt of gratitude to the dairy checkoff.

Beyond such direct and indirect subsidies, meat production involves some environmental externalities, costs that the meat industry imposes but does not have to pay for. The emission of greenhouse gasses is one major environmental externality: just how major is a subject of much controversy, of course, but the existence of the greenhouse gas externality is not controversial. Other environmental externalities, including soil and water pollution, also are associated with animal agriculture. (Incidentally, factory fish farming is no friend to the environment, either.) 

The build-up of resistance to antibiotics is yet another source of externalities connected to animal agriculture. (A nice five-minute video on some of the applied science of antibiotic resistance in animal agriculture can be found here.) As with greenhouse gasses, there's a global public bad feature of antibiotic and antimicrobial resistance.

Meat consumption (and production) is associated with some serious health problems. But it is at least arguable that these (or some of these) are not externalities -- people understand the risks, say, but eat meat (or work in a meat packing plant) anyway, the story might go -- and hence do not generate a rationale for applying a corrective tax. Negative health effects combined with some social subsidy to health care is a sort of budgetary spillover, but one that, once again, may not justify a Pigovian remedy.

The theme of the Animals and Econ blog must needs make an appearance here: as soon as you grant nonhuman animals any direct standing in cost-benefit analyses or evaluations of economic efficiency, then the externalities from industrialized animal agricultural appear to be prohibitively large.

PETA on a Meat Tax

People for the Ethical Treatment of Animals support a meat excise tax "to help cover the health and environmental costs that result from using animals for food." They detail the usual health and environmental impacts of meat consumption and production, and (as is usually the case, it seems) do not distinguish between internal and external health costs. PETA does, however, mention the potential cross-subsidy inherent through our health care financing: "It doesn’t make sense that the millions of meat-free Americans have to help pick up the tab (through taxes and health-insurance premiums) when meat-eaters get sick." On their "Tax Meat" FAQ page, PETA also notes the health impacts of the production of meat, the significant health and safety risks within the meatpacking industry -- an industry with working conditions that have been found further wanting during the Covid pandemic. The revenues also can be earmarked: "Revenue from the tax could be used to clean up areas polluted by animal agriculture, assist farms in transitioning away from animal-based agriculture, and increase access to healthy plant-derived foods in communities that need it most." I didn't see a specific tax rate in the PETA material, but they do indicate (on the FAQ page) that the tax payments from a typical (non-vegetarian!) family would come to about $5 per month. Given standard household meat expenditures in the US, that suggests something like a 5% meat (ad valorem) excise tax. 

PETA end their appeal for a meat tax by identifying the victims of the current system, the millions and millions of abused animals: "When it comes to Americans’ meat habit, animals are paying the biggest costs. A tax on meat could help persuade humans to save other animals (and their own bodies) from abuse."

Katare et al. (2020) on Optimal Meat Consumption

 Bhagyashree Katare, H. Holly Wang, Jonathan Lawing, Na Hao, Timothy Park, and Michael Wetzstein, "Toward Optimal Meat Consumption." American Journal of Agricultural Economics 102(2): 662-680, March 2020.

Meat consumption worldwide increased by more that a factor of five between 1992 and 2016, with concomitant negative effects on the environment and health. Many of these harms are of the external variety, and thus present the usual case for potentially welfare-improving policy interventions -- including a Pigovian meat tax. But the existence of external costs does not in itself establish the optimality of a Pigovian tax; perhaps improved consumer information or a campaign aimed at voluntary reductions in meat consumption would be preferable policy responses. Alternatively, changes in production methods could reduce the environmental impact of the meat industry.

The authors compare a meat tax with a mandatory labelling scheme, where the labels on meat products would indicate the environmental and health costs of meat production and consumption. The authors note that individuals enjoy behaving in what they see as a prosocial manner, providing an intrinsic motivation to reduce meat consumption. This intrinsic motivation, they argue, can be counteracted by the presence of external motivations to reduce meat consumption, via a meat tax, for instance -- this type of crowding out has been examined pretty broadly within behavioral economics. Green labelling (as opposed to the tax) could promote, not undermine, intrinsic incentives to reduce meat consumption. (Although the opposite effect, that being constantly lectured to cut back on meat could incentivize more meat consumption, seems possible, too.) Other issues to consider are the potential that the substitutes to meat consumption might involve external social costs of their own, and the revenues collected by a meat tax could be spent in ways to further reduce meat consumption.

In their baseline scenario, the authors find that green labelling has little impact on reducing meat consumption; they also find that the optimal meat tax is quite significant, at more than 67% of the pre-tax price. Of course, different parameterizations could alter the specific findings, but a significant meat tax combined with a supplementary informational campaign seems to me like a big improvement over the status quo.

Forero-Cantor, Ribal, and Sanjuán (2020) on Carbon Footprint Meat Taxes

Germán Forero-Cantor, Javier Ribal, and Neus Sanjuán, "Levying carbon footprint taxes on animal-sourced foods. A case study in Spain." Journal of Cleaner Production 243, 10 January 2020, 118668.

Meat production as practiced today is not friendly to the environment, with animal agriculture responsible for some 14.5% of greenhouse gas emissions. Other environmental harms associated with animal agriculture include water pollution and rain forest destruction. 

With respect to greenhouse gas emissions alone, Forero-Cantor et al. (2020) calculate (Pigovian?) taxes for pork, beef, chicken, turkey, lamb, eggs, and fish, using quarterly Spanish data from 2004 to 2015. (During this period, the total Spanish consumption of beef, eggs, and lamb decreased. The modal meat meal is fish -- that is, the weight of seafood consumed each year globally exceeds that of pork or poultry, the most common land-animal-sourced meats; fish is undifferentiated in the data, as opposed to the separate types of land-animal-sourced meats.) The researchers need to know not only the carbon footprint throughout the meat supply chain -- lamb and beef are the biggest carbon releasers on a per kilogram basis, while fish have the lowest carbon footprint -- they also have to understand demand elasticities, how changes in prices will alter the quantities of meat and other products that consumers purchase. 

The researchers simulate the effect of various taxes on greenhouse gas emissions, and find, counterintuitively, that a tax on fish does best at lowering the overall carbon footprint. A tax on pork, alternatively, given the induced product substitutions, would have a perverse effect, it would raise the overall carbon footprint. A tax on poultry (chicken or turkey) wouldn't help much in curtailing greenhouse gasses, either. Given the huge (1 trillion? -- pdf) number of fish killed each year for human and animal consumption, animal welfare considerations would seem to bolster the (relative?) case for taxing seafood.

Springmann et al. (2018) on Health-Motivated Meat Taxes

 Springmann M, Mason-D'Croz D, Robinson S, et al. Health-motivated taxes on red and processed meat: A modelling study on optimal tax levels and associated health impacts. PLoS One. 2018;13(11):e0204139. Published 2018 Nov 6. doi:10.1371/journal.pone.0204139

The authors look at the health impacts of an increase of one serving per day in the consumption of red and processed meat. (Red meat here is beef, pork, and lamb, despite what the ads have told us; processed meats include sausage, hot dogs, and many deli-style lunchmeats.) They monetize these health impacts, and then examine taxes that would internalize the incremental health costs; here's a schematic representation of their analytic approach.

Red and processed meats come out of the study as fairly lethal, accounting for something like 4.4% of deaths. In high-income countries, "internalizing" the mortality and morbidity effects would raise prices of red meat by about one-fifth, and more than double the prices of processed meat. These price changes would result in lots of substitutions in terms of food consumption, and meat-related deaths worldwide would decline by some 9%. The remaining meat-related health care costs would exceed meat tax revenues.

While I learned a lot from the useful exercise presented in Springmann et al. (2018), I don't think that it sheds much light on "optimal" meat taxes, at least when that term is used in the Pigovian sense (which the authors reference). Their approach treats all incremental meat-related health care costs as external, that is, as if they are ignored entirely by the consumer. But people engage in lots of risky activities even when they know the risks and even know that they will bear the costs if the risks materialize. Is the additional utility that people get from that incremental serving of meat more valuable than the additonal (expected) health care costs? We can't know the answer to this question from the approach taken in the article. We don't know benefits, we don't know what portion of costs are truly external, and we don't know the extent of underweighting of non-externalized costs, so-called internalities. Hence, this approach does not possess the building blocks required to provide reliable estimates of Pigovian meat taxes -- a point similar to one I raised concerning the analysis in Meatonomics. I suspect the underlying issue (with Springmann et al. (2018)) is a reliance on a cost-of-illness approach, which is inadequate for capturing economic optimality. 

On Pigovian Taxes

In the previous post, I threw around the phrase "Pigovian tax" much too cavalierly. Looking at the external costs that an industry imposes on society, and then choosing a per-unit tax (so many cents per pound of meat, say, or a percentage tax imposed at the retail level) so that the tax revenues equal those external costs (and hence the consumers are now paying the full freight, as it were) is not equivalent to a Pigovian tax -- indeed, I expect that, in most circumstances, that procedure bears no relationship to a Pigovian tax.

To find a Pigovian tax, you should first identify all of the social costs and benefits associated with all potential levels of output of the good in question. The benefits typically are measured by consumer willingness-to-pay, and the costs are standard production costs (wages, prices of other inputs, rent on capital, and so on) as well as external non-monetized costs such as pollution or what have you (and any other adjustments where market prices for inputs do not reflect opportunity costs). Then you calculate the output level where the net benefit (all benefits minus all costs) are maximized, which typically is where marginal benefits equal marginal social costs. That output level is "socially optimal," producing more economic pie than any other output level. Having found the socially optimal output, you look at marginal social costs at that level of output and also the marginal costs actually facing private producers at that same output level. If there is a net negative externality, private marginal costs will be less than social marginal costs. The per-unit Pigovian tax, then, is given by the difference between these two marginal costs, measured at the socially efficient output. Such a tax (or the ad valorem version) does indeed bring home the full costs to the consumer, makes them pay the full freight of the goods they consume, but generally it has nothing to do with having tax revenues equal some level of external costs that were measured from the pre-tax status quo.

OK, even this more defensible use of the phrase "Pigovian tax" paints with pretty broad strokes, but I wanted at least to make some movement in the direction of accuracy.

As for the external costs associated with meat eating in the US, I believe that they are significant, even if we look only at the environmental subset of those costs. As soon as we treat harms to the animals themselves as cognizable costs (or even if we only count one-thousandth of those harms as social costs), then the size of the Pigovian tax is enormous -- indeed, it would be prohibitive, in that industrial farm operations as now undertaken in the US could not survive if animal harms were reflected in retail meat prices.

On Meatonomics, by David Robinson Simon

I am trying to put some thoughts together on meat taxation, so I thought a good place to start would be to comment a little bit on the 2013 book Meatonomics, by David Robinson Simon. The cover of Meatonomics includes the phrase "$414 Billion Reasons to Eat Less Meat," and the substance of the book explains where these extra (annual, 2012 dollars) costs of meat (not paid for directly by consumers or producers) come from; they are helpfully summarized in two pages (pp. 202-203) in Appendix B.

Kudos to Mr. Smith for taking on this ambitious task, and for documenting and attempting to quantify the many external costs of animal agriculture. The details undoubtedly are debatable, but what I take to be the main message -- there are huge external costs associated with meat, egg, fish, and dairy consumption in the US and that a significant tax on products containing these ingredients should be a major part of a set of policy reforms -- is one with which I agree. (And if you don't agree, your position might be altered by reading Meatonomics.)

Once the existence of sizable negative externalities is established, the economic case for corrective measures, including a so-called Pigovian tax, is fairly strong. Smith's $414 billion is more than 1.6 times consumer spending on animal foods, so a Pigovian tax would increase retail prices by something on the order of 2.5 times their existing (2012) level. [OK, this claim is actually a massive simplification or even distortion.] The higher retail prices would decrease the quantity demanded of animal foods, of course, but economic efficiency would be enhanced, as consumers began to shoulder the full social costs of their dining decisions. Mr. Smith does not propose a full Pigovian tax, however; instead, he suggests (page 172) a 50% ad valorem tax on domestic retail sales of animal-based foods, which would raise consumer prices for those products by something like 50%, too, presumably.

The precise nature of Mr. Smith's accounting of external costs is relevant for desirable policy reforms. First, some 9 percent of the external costs come in the form of subsidies to agriculture, including irrigation subsidies. (Since much of the corn crop is used for animal feed, subsidies to corn, for instance, end up supporting animal agriculture.) The externalities associated with these subsidies would best be handled by eliminating the subsidies (which are spread around to all the uses of corn, including ethanol), not through a meat tax. Second, the majority of the external costs come through impacts on health (especially increased heart disease), but it is not clear that these are externalities. (Some, such as building up of antibiotic resistance through farm antibiotic use, are classic externalities, however.) They are not direct physical externalities, like when your steel mill pollutes my air (or vice versa), but rather, they operate through the socialization of some healthcare costs -- the spillovers are financial, and would not exist if we chose not to provide some public subsidy to healthcare. Using such financial spillovers as justifications for further public interventions (here, a meat tax), is not necessarily a good idea. After all, once it is agreed that such externalities can drive policy, then any personal behavior (not getting enough exercise, say, or eating an extra dessert) seems ripe for public control: your irresponsibility is costing me money! This is not a road down which I am eager to travel, at least without a lot of consideration. (Though I do support some socialization of health care expenses -- I just don't want their availability to be made contingent on whether your behavior is judged to be sufficiently protective of the public purse.) Of course, even if there were no issues with fiscal spillovers, we should still be concerned with the health effects of consuming animal products or anything else. Do individuals understand the health risks they are running, or are these risks for some reason undercounted in individual decision making? That is, health risks can be internalities, even if they are not externalities, and taxes might be helpful to overcome internalities, too.

The environmental externalities identified in Meatonomics are, for the most part, good old-fashioned standard externalities, suggesting that the current size of the animal agriculture sector is socially excessive and a meat tax would move us in the right direction. Mr. Smith also notes the willingness-to-pay by people for less cruel methods of farming, so not only is there too much animal agriculture, it is insufficiently protective of animal interests -- even if those interests are directly ignored, and only taken into account through human willingness-to-pay.