What Role Can Taxes and Subsidies Play in Changing Diets?

Abstract

The study examines the use of fiscal instruments to achieve a healthier diet while reducing CO2 emissions. The methodology is to minimize the deadweight losses in attaining a healthy diet. Given that the shift should not impose a large burden on the consumer, the analysis is conducted with a system of taxes and subsidies - a bonus-malus framework. The model generates heavy subsidies on carbohydrates and heavy taxes on red meats, which would be politically unacceptable. A more plausible goal may be to aim to close the gap between the current diet and a healthier one by 20-25 percent.