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22/01/2017

German Environment Agency: ‘Tax animal products to tackle climate change’

Agriculture & Food

German Environment Agency: ‘Tax animal products to tackle climate change’

Opponents of the proposal argue that a VAT increase will do nothing to improve farming practices.

[isamiga76/Flickr]

Meat and dairy farming is more damaging to the environment than producing cereals, fruits or vegetables. Germany’s Federal Environment Agency (UBA) has called for higher taxes on animal products, but the idea is controversial. EurActiv Germany reports.

Agriculture is a big contributor to climate change. In a recent study, the UBA highlighted the fact that farming is the largest emitter of nitrous oxide and methane, a greenhouse gas around 25 times more powerful than carbon dioxide.

This conclusion led the UBA to a controversial conclusion, namely that VAT reductions on animal products such as meat and cheese amount to environmentally harmful subsidies. It put the current value of this tax break at €5.2 billion.

The agency criticised the fact that animal products benefit from a VAT rate of just 7%, the same rate as cereals, fruits or vegetables, despite the fact that they are far more damaging to the environment.

For example, one kilo of beef can generate up to 28kg of CO2 equivalent. For the same quantity of fruits and vegetables, emissions are typically less than 1kg.

Not only are meat and cheese resource-intensive to produce, but animals like cows also emit large amounts of methane when digesting food. According to environmental groups, the production of animal feed is also a big contributor to the greenhouse effect, as virgin forests are often cleared to make space for soya production.

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The European executive will reform the Common Agricultural Policy (CAP) by the end of 2017. José Bové and Éric Andrieu argue for an agricultural system that puts the environment, human health and small businesses first. EurActiv’s partner Ouest France reports.

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“In future, animal food products should be taxed at the regular 19% rate. In return, the state could use the billions this would generate to further lower the 7% reduced rate. This could help cut the cost of fruits and vegetables or public transport. Both would be good for the climate and benefit citizens,” said UBA President Maria Krautzberger.

For the UBA, environment and climate-damaging subsidies in other sectors are still far too high, endangering Germany’s Paris climate commitments. In 2012, Berlin handed out €57bn in climate-harmful subsidies.

According to the UBA, most of these subsidies are given to the transport sector (€28.6bn), followed by the energy sector (€20.3bn). Transport is responsible for 18% of all German emissions and energy for more than one-third, making them among the most environmentally unfriendly sectors in the German economy.

“Massive blind spots” in subsidy cuts

Krautzberger complained that for years, Germany’s subsidy reduction plan had had “massive blind spots”.

“It is paradoxical,” she said, “that Germany should commit to more climate protection at the international level while we reward climate-damaging behaviour in our own country with tax breaks”.

German researcher: Free trade can cushion impact of climate change on agriculture

Poor harvests, hunger and rising food prices: Climate change threatens food production around the world. The solution to all of this could be free trade, researcher Hermann Lotze-Campen told EurActiv Germany.

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But Thomas Gambke, a representative of the Green Party, believes the Environment Agency’s recommended tax hike would not have such a positive impact. “We should approach the question of food and climate change from the producers’ side, not use VAT to try and change consumers’ behaviour,” he said.

For Gambke, VAT on food should perform a social function and ensure that food remains affordable even for low earners. Instead of acting on VAT, Germany should demand higher standards in farming, placing animal welfare and climate change prevention at the heart of farming, the expert added.

Several ministers have also rejected the proposal. For Germany’s Minister for Agriculture Christian Schmidt (CSU), an artificial price rise through a tax hike would bring no benefit for animal welfare, the environment or consumers. He told the news organisation RND that Germany should not “use penalty taxes to prescribe what people eat”.

Further Reading

Food security in the face of climate change: Impossible without water

Development agencies must use the momentum from COP22 to prioritise water infrastructure projects and help mitigate the effects of climate change and extreme weather events in Africa, write Elke Herrfahrdt-Pähle and Waltina Scheumann.

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