Pigovian Tax on Meat

There is finally a growing recognition that the industrialized production of meat is bad for people and the planet. When something has a significant negative externality (e.g. pollution) a Pigovian tax is used to add the social costs to that product’s price. That’s why many economists support a tax on gasoline. The negative externalities include production of greenhouse gases and undermining our security interests by sending too much money to unfriendly countries. For meat, there are several negative externalities.

  • Grazing animals produce more greenhouse gases (belching and farting) than cars.
  • Industrial farms seriously degrade water quality because of large amounts of feces.
  • It’s an inefficient use of water and arable land, both of which are subsidized by the gov’t.
  • Over-consumption of meat leads to poor health, which adds to our total health care costs.

By adding a tax and/or removing agricultural subsidies for meat production, it raises the price to match the real total cost of a double cheeseburger. Though it is impossible to expect people to suddenly become vegetarians (I’ve struggled for 10 years), it is trivial for people to reduce the amount of meat they eat. Americans are grotesquely obese because they eat too much of everything. Reducing total food consumption means less meat consumption which leads to lower rates of obesity. Raising the cost of meat should hopefully push people to eat more fruits and vegetables. I think the biggest problem is America’s meat & potatoes food culture. People just don’t know what to do with vegetables. Incidentally, I asked Greg Mankiw, Bush’s economics advisor, about this and he agreed with a Pigovian tax on meat. (Isn’t the Internet great?) So you could likely get bourgeoisie support, but the overweight proletariat will riot to get cheap bacon. Mmmmmmm, bacon.

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One comment

  1. random comment

    i mostly agree, but aren’t the greenhouse gases compensated to a large extent because the carbon is coming from grass eaten by the cow which is absorbing co2 from the atmosphere?

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