What if your grocery bill stayed the same but your shopping cart made you healthier and helped the planet?
A new study from Chalmers University of Technology in Sweden suggests that small, smart tax changes could do just that. Researchers modeled a “food tax shift” that would remove value-added tax (VAT) from nutritious foods like fruits, vegetables and whole grains, while adding modest levies to foods that harm health or the climate, such as red and processed meats and sugary drinks.
The results, published in Ecological Economics, suggest the shift could prevent about 700 premature deaths a year and cut food-related greenhouse gas emissions by roughly 8%, all without increasing the average grocery bill.
“Today’s diets are making us sick and negatively impacting the climate,” said Jörgen Larsson, lead author and researcher at Chalmers. “If we want to do something about this collectively, taxes and subsidies are a good way forward. Our research also shows that this can be done without the average trip to the supermarket for groceries becoming more expensive when selective taxes on certain food groups are compensated by removing VAT on other food groups”
In the model, lower taxes on plant-based foods made fruits and vegetables about 11% cheaper, encouraging higher consumption. A 25% price increase on beef and lamb would likely reduce red meat intake by nearly 20%, similar to 1990s levels, while cutting down on diet-related disease and emissions.
The researchers estimate these shifts could save hundreds of lives each year by reducing rates of heart disease, diabetes and obesity-related conditions. The tax shift would also be cost-neutral across income groups, making healthy diets more affordable and achievable for everyone.
While the analysis focused on Sweden, the researchers note that similar approaches could benefit other high-income countries facing diet-related health challenges.
This research was supported by Sweden’s Mistra Sustainable Consumption programme and national food and environment research councils.