The animal farming industry is in the public eye. Consumption of meat and dairy products and its consequences are subjects of discussion in society and politics alike.
The public debate focuses on two aspects: (1) livestock sector’s impact on climate and environment and (2) farm animals’ husbandry and living conditions. 14.5% of all human-induced greenhouse gas emissions are attributed to the livestock sector (Gerber et al. 2013). Moreover, husbandry conditions, especially in intensive livestock farming, are increasingly discussed in public and even questioned by meat eaters (Eurobarometer 2016).
The production and consumption of animal products generate negative externalities regarding the environment and animal welfare in society (Springmann et al. 2016; Lusk 2011). Politics are increasingly confronted with the deficiencies of the system and start to take them into account, e.g. in the European Commission’s “Farm to Fork” strategy (European Commission 2020).
In Germany, policy makers discuss potential regulations for both issues. In 2021, a CO2 price for fossil fuels in the heating and transportation sector has been introduced in Germany (Bundesregierung 2021). In this regard, the German Green Party suggested a climate charge on animal products (Maurin 2019). While they could not come through with it, such a tax is not off the table yet. The German Ministry of Food and Agriculture, on the other hand, proposes a transformation of the German livestock sector towards higher animal welfare standards. Apart from plans of introducing a state animal welfare label, an expert commission also suggested to implement an animal welfare consumption tax, a so called “Tierwohlabgabe”, to raise funds for supporting farmers who rebuild their stables and farms to provide more animal welfare (BMEL 2021).
Both debates are conducted rather separately from each other, but target the same product and industry. Policy changes to internalize either externality would impact prices for animal products. We are thus interested in how voters perceive the two potential tax schemes.
There is a broad literature on taxing certain food products, such as sugar or fat (e.g., Berardi et al. 2016; Colchero et al. 2016; Cornlesen & Carreido 2015; Smed 2012). Regarding the taxation of meat or animal products, the effects of certain tax schemes on demand, greenhouse gas (GHG) emissions and/or societal health have been modeled for several countries (e.g., Funke et al. 2021 for the world; Moberg et al. 2021 and Säll et al. 2020 for Sweden; Bonnet et al. 2018 for France; Dogbe & Gil 2018 for Catalonia Spain; Springmann et al. 2018 for world regions; Chalmers et al. 2016 for Scotland; Edjabou & Smed 2013 for Denmark; Wirsenius et al. 2011 for the EU). From this research follows that specifically taxing meat could have a strong steering effect.
Nonetheless, implementing such taxes is clearly challenging from a political point of view. Numerous studies, both surveys and choice experiments, thus examine people’s preferences regarding (carbon) tax schemes in general, but also in sub-sectors such as transportation and animal products (e.g., Baranzini et al. 2021; Douenne & Fabre 2020; Fesenfeld et al. 2020; Grimsrud et al. 2019; Hagmann et al. 2019; Hardisty et al. 2019; Baranzini & Carattini 2017; Brännlund & Persson 2012; Sælen & Kallbekken 2011; Hsu et al. 2008). Thereof, certain policy specifications are found to increase people’s support for such taxes: (1) refraining from calling the charge a “tax”, (2) earmarking tax revenues for environmental purposes, (3) redistributing tax revenues preferably as lump-sum payments, but earmarking still preferred over redistribution in direct comparison, (4) progressive taxing, and (5) clearly explaining tax impact/effectiveness (Carattini et al. 2018; Klenert et al. 2018).
However, we are not aware of any research directly comparing preferences of introducing a tax on the same product, namely meat, but for different arguments. Our first research question is hence: Do support rates for a meat tax differ depending on whether it is levied for environmental or animal welfare reasons?
The support for a meat tax should clearly be linked to the tax rate. We therefore investigate people’s support in a referendum-like choice experiment letting them vote for either the status quo or a new meat tax policy with increasing tax levels. With such a referendum scheme, hypothetical bias is limited to a certain extent as the decision is concrete and realistic (Carson & Groves 2007). Furthermore, we inform participants that the outcome of the referendum will be forwarded by us to the committee of the Federal Parliament of Germany in charge for the respective tax type.
For the policy proposals shown to participants, we apply the above mentioned five success factors. In addition, we only consider consumption tax schemes, i.e. only consumers of the product are charged for the amount they buy. However, we are further interested in people’s preferences regarding the degree of differentiation of the consumption tax.
The consumption could either be a fixed and flat amount charged on every kilogram sold, independent from the type of meat or animal welfare level provided such as the proposed “Tierwohlabgabe” or the “EEG-Umlage” (charge for renewable energies) used to finance subsidies for renewable energy in the electricity sector. Another option would be to implement a more differentiated scheme in line with a Pigouvian tax to bring consumption to a socially optimal level (Pigou 1920). Meat types with higher underlying carbon emissions are charged a higher tax than those with lower emissions. The same principle could be applied to animal welfare with products produced under higher animal welfare standards burdened less than those produced under lower levels.
Theoretically, both schemes are likely to affect demand for meat. The flat taxes are expected to mainly affect how much meat is consumed (see e.g., Nordgren 2012 for GHG tax on meat). The taxes differentiating between different levels of externalities associated with the product are expected to affect both the level of meat consumption and also the composition of meat products consumed (see e.g., Wirsenius et al. 2011 for GHG weighted tax on meat). We do not examine actual consumption behavior in our experiment. Instead, we are interested in people’s preferences for certain tax schemes.
Our second research question is thus: Do support rates differ depending on the degree of differentiation of the meat consumption tax?
To identify drivers of the latter, we exogenously vary the salience of the expected effect on the composition of meat products consumed by randomly switching the order of the referendum choices and a belief elicitation task. The latter asks respondents whether they believe a specific tax scheme will change the level and composition of meat consumption both for themselves and for other participants of the survey. The salience of the behavioral response is larger for those participants who answer the belief elicitation before the referendum task. Thinking through potential effects of a tax scheme might serve as a proxy for experiencing the effects of that scheme.
Our third research question is: Does the salience of own expectations about the tax’s effect on consumption behavior impact support rates?