Investor coalition Farm Animal Investment Risk & Return Initiative (FAIRR) released a white paper entitled “The Livestock Levy” this week that predicts meat to be the next target of what has been called a “sin tax”—or a tax imposed by governing bodies on items that pose a threat to public health. FAIRR—the members of which collectively hold $4 trillion in funds—explained that the “livestock” sector has been linked to a number of health and environmental threats, including greenhouse gas emissions that exceed emissions from the transport sector; an increasing incidence rate of global obesity and associated higher risks of type 2 diabetes and cancer; increasing levels of antibiotic resistance; threats to global food security and water availability; and soil degradation and deforestation. “Could taxation of meat products be a way to mitigate these global challenges?” the paper inquired. “The pathway to taxation typically starts when there is global consensus that an activity or product harms society. This leads to an assessment of their financial costs to the public, which in turn results in support for some form of additional taxation. Taxes on tobacco, carbon, and sugar have followed this playbook.” Currently, meat taxes are on the agenda in Denmark, Sweden, and Germany. FAIRR advised that a meat tax will inevitably be on the agenda as global governments cooperate to implement the climate change goals outlined in the Paris Agreement and urged long-term investors to consider the volatility of investing in the global meat industry in coming years.
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