1. INTRODUCTION
For climate change to be addressed effectively, urgent action is required from all industry sectors.Footnote 1 Yet, in spite of the significant contribution of meat production to global greenhouse gas (GHG) emissions (ranging from 14.5%Footnote 2 to 51%Footnote 3), this sector is relatively unregulated.
From a purely scientific perspective, this regulatory shortfall is surprising.Footnote 4 Firstly, sectors emitting at comparable levels, such as transport, are highly regulated.Footnote 5 Secondly, it is expected that by 2050, GHG emissions from European Union (EU) agriculture will rise significantly and eventually represent a third of total EU emissions.Footnote 6 Thirdly, a significant reduction in livestock would reduce GHG emissions relatively quickly compared with measures involving renewable energy and energy efficiency:Footnote 7 methane, the major GHG associated with livestock, is 23 times more warming to the atmosphere than carbon dioxide (CO2), and has a half-life of only about eight years in the atmosphere compared to at least a hundred years for CO2.Footnote 8 Fourthly, substituting for meat products is a comparatively easy and cost-effective way to reduce GHG emissions.Footnote 9 Lastly, reducing meat production would have a number of other environmental benefits: raising livestock is the largest of all anthropogenic land uses, is responsible for over 8% of global human water use, and is a key factor in the loss of species.Footnote 10
On the other hand, from an economic as well as a socio-cultural and political perspective, this regulatory shortfall is entirely understandable. Meat is a favourite food across the world.Footnote 11 Moreover, taxes are politically unpopular with interest groups such as livestock lobbies, so policy makers tend to provide subsidies for ‘clean’ and ‘green’ technologies rather than putting a price on carbon emissions.Footnote 12 The EU’s approach to climate change regulation generally favours win-win situations in which regulation creates economic opportunities.Footnote 13 With regard to agricultural policies, the EU focuses on better fodder, improved livestock productivity, maximizing the benefits of extensive farming,Footnote 14 and so forth – in short, measures in which innovation may yield economic benefits.
Politically, it has been easier to justify measures to reduce carbon emissions in the transport sector than in the agricultural sector. Besides promoting innovation, regulation in the transport sector can rely on the well known and far reaching problem of dependency on fossil fuels. Moreover, such regulation complements existing air quality measures to yield improved air quality in cities, as well as other health benefits.Footnote 15
Reducing meat consumption would also come with many positive side effects, yet political discussion along these lines is only just beginning. Swedish authorities, in 2013, proposed a first-of-its-kind meat tax to reduce meat consumption on grounds of climate change,Footnote 16 and the EU’s ‘roadmap to 2050’ also mentions that it would be desirable to re-orient consumption towards less carbon intensive food.Footnote 17
Against this background, this article will aim to address legal issues concerning three possible designs of a hypothetical EU tax on consumption of domestic and imported meat. Particular focus will be placed on international climate change law, World Trade Organization (WTO) law, human rights law and EU law.
Section 2 explains why I use the example of a hypothetical tax on consumption of domestic and imported meat. Section 3 analyzes whether such a meat tax would withstand international climate change and trade law. Section 4 examines whether a meat tax is in accordance with European environmental law and the general EU principle of proportionality, and Section 5 asks whether a meat tax is in accordance with the human right to eat. Conclusions are presented in Section 6.
2. EU MEAT TAX ON CONSUMPTION
Meat consumption in the context of climate change could be regulated in various ways. This article uses the example of a hypothetical EU tax on meat consumption for each categoryFootnote 18 of domestic and imported meat. It could be levied on:
∙ average GHG emissions per unit for each category of meat for all producers on entire markets Footnote 19 (Type 1); or
∙ uniformly based on average GHG emissions per unit for each category of meat (Type 2); or on
∙ actual GHG emissions per unit of meat of individual producers (Type 3).
This section will address the legal implications of such regulation.
The first reason for utilizing the example of a tax on meat consumption within the European Union is that meat consumption, which is typically connected with the average income in a country,Footnote 20 is significantly higher in developed countries than it is in developing countries. Meat consumption per person in 2009 was 84.80 kilogrammes (kg) in the EU, 17.6 kg across Africa and 4.4 kg in India.Footnote 21 Secondly, the EU is clearly willing to take action to mitigate climate change, as evidenced by its offers to reduce GHG emissions by 40% by 2030 compared with 1990 levels,Footnote 22 and by its prioritization of climate change among global environmental issues.Footnote 23 Thirdly, there have already been calls within the EU to introduce a meat tax to mitigate climate change: the Swedish authorities have proposed a meat tax to reduce consumptionFootnote 24 and, in its ‘roadmap’ to 2050, the EU mentions that ‘re-orienting consumption towards less carbon intensive food would be desirable’.Footnote 25
I propose a tax on meat despite the fact that, in principle, all categories of food could be subject to taxes on GHG emissions.Footnote 26 One reason for this is that a tax on meat promises to be an efficient means of mitigating climate change.Footnote 27 Meat alternatives cause only a fraction of the GHG emissions caused by meat.Footnote 28 Similarly, vegetable foodstuffs are excluded because of their much lower GHG emissions per food unit and their lower elasticities.Footnote 29 Furthermore, within the EU meat is responsible for 20 times more emissions per kg than milk.Footnote 30 Lastly, it would also be an effective measure: tests by the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO) on the global agricultural sectorFootnote 31 have confirmed that consumption, and therefore GHG emissions, would fall with the introduction of a meat tax. It is estimated that a 7% reduction in current GHG emissions in EU agriculture could be achieved if €60 per tonne of CO2-equivalent was added to the price.Footnote 32
The first reason underlying my proposal for a tax is that a Pigovian tax is consistent with the regulatory emphasis on economic incentives in the Kyoto Protocol.Footnote 33 Economic incentives have a number of important economic and environmental advantages over command regulation.Footnote 34 Firstly, command and control regulation is rarely politically feasible. Secondly, the existing market failure – excessive meat consumption is attributable to the fact that the meat industry and meat consumers do not internalize the consequences of their GHG emissionsFootnote 35 – could be relatively easily resolved by governments through taxation.Footnote 36 Thirdly, taxes provide signals to ‘get the prices right’.Footnote 37
Getting the prices right would imply taxation to be levied on actual GHG emissions per kg of meat. This would mean designing the meat tax as an emissions tax as opposed to an output tax. For the latter, the content of GHG emissions is related to but not perfectly correlated with the emissions.Footnote 38 However, a meat tax on output is preferable to a tax on actual emissionsFootnote 39 because of high monitoring costs, limited options for reducing emissions apart from reduced production (technical potential is limited), and high substitution possibilities.Footnote 40 Thus, a better option is an output tax that is differentiated depending on the GHG emission levels per unit of meat for each category of meat, which is based on average emission levels for all meat producers within an entire market, rather than on specific emission levels of individual producers.Footnote 41 In this spirit, Swedish authorities have suggested a tax of €1.50 per kg of beef.Footnote 42
That said, because the competitiveness of the EU agricultural sector is likely to be affected by the implementation of unilateral environmental taxes,Footnote 43 and because of the possibility of carbon leakage, it is crucial to levy the meat tax on both domestic and imported meat (through border tax adjustment on importsFootnote 44). Therefore, the tax should be imposed on consumption rather than production.Footnote 45 Since meat is an everyday product with a relatively short shelf life, we may presume that the risk of the emergence of an unregulated market in untaxed meat within the regulated jurisdiction is small. However, even where taxes are levied on consumption, carbon leakage cannot be entirely avoided because decreased demand for meat within the EU would reduce world meat prices and result in increased meat consumption in non-EU countries.Footnote 46 It is thought that if the EU reduces meat consumption by 20%, international livestock prices would be reduced by between 3% and 11%, which would cause meat consumption in the rest of the world to rise slightly.Footnote 47
The following sections will analyze whether a meat tax on the consumption of domestic and exported meat (hereinafter ‘the meat tax’) is legally permissible,Footnote 48 covering both the possibility of an output tax (levied on average GHG emissions per unit of meat category) and an emissions tax (levied on the actual GHG emissions).
3. A MEAT TAX UNDER INTERNATIONAL LAW
3.1. Conflict with International Climate Change Regulation?
Within the United Nations Framework Convention on Climate Change (UNFCCC)Footnote 49 all parties have committed to implement national and regional programmes to mitigate climate changeFootnote 50 in all relevant sectors, including agriculture.Footnote 51 Developed countries, such as those within the EU, are obliged to adopt policies to limit their GHG emissions to return to earlier levels of anthropogenic emissions.Footnote 52 Some see this obligation as binding.Footnote 53 Although the UNFCCC is silent on how this return to earlier levels should be achieved,Footnote 54 it does regard measures in the agricultural sector as relevantFootnote 55 and it explicitly allows for unilateral measures.Footnote 56 Unilateral mitigation measures in the agricultural sector are thus supported by the UNFCCC as long as they are in accordance with the ‘polluter pays’ principle and the principle of common but differentiated responsibilities, and provided there is no ‘arbitrary or unjustified discrimination or disguised restriction on international trade’ (Article 3(5) UNFCCC).
Clearly, a meat tax would be an application of the ‘polluter pays’ principle, according to which those who cause damage to the environment should bear the cost of rectifying that damage,Footnote 57 and taxes are an important means of promoting this principle.Footnote 58 Although the ‘polluter pays’ principle is not explicitly mentioned in the UNFCCC,Footnote 59 it is regarded by many as a customary rule of international lawFootnote 60 and is therefore commonly associated with the UNFCCC.
Principle of common but differentiated responsibilities
On the other hand, a key principle in the climate change regime (albeit not legally enforceableFootnote 61) is the principle of common but differentiated responsibilities.Footnote 62 Article 3(1) UNFCCC states that ‘[t]he Parties should protect the climate system … in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse effects thereof’. In implementing measures within the EU to combat climate change, this principle of common but differentiated responsibilities has to be taken ‘into account’.Footnote 63 The principle includes two elements: on the one hand, the common responsibility of states with regard to the ‘change in the Earth’s climate and its adverse effects’, which is a common concern of humankind;Footnote 64 and, on the other hand, the contribution of each individual state to the creation of particular environmental problems and their individual abilities to prevent, reduce, and control the threat. In practice, the latter leads to environmental standards which impose differing obligations on states.Footnote 65
All three types of a meat tax would affect the quantity of meat sales – and therefore the GHG emissions of meat production – not only within the EU (with regard to domestic products) but also from developing countries. It could be argued, therefore, that such a tax would place a disproportionate burden on developing states as they have lesser obligations to fulfil. For example, with regard to the (currently suspendedFootnote 66) EU aviation scheme, which included EU and non-EU airlines alike, the EU was accused of failing to reflect adequately the principle of common but differentiated responsibilities.Footnote 67
However, unlike the aviation scheme, a meat tax would not impose any obligations on meat producers within developing countries.Footnote 68 Moreover, it would not require developing countries to adopt GHG mitigation policies that are comparable in effect with those adopted by developed countries.Footnote 69 Furthermore, the wider context should always be kept in mind: the ultimate objective of the UNFCCC is to identify the best way to avoid dangerous anthropogenic climate change.Footnote 70 Moreover, the UNFCCC requires developed countries, on the basis of specific commitments,Footnote 71 to provide financial assistance, to transfer technology, and to build capacity to support the implementation of adaptation action in developing countries.Footnote 72 It does not prohibit unilateral measures that potentially affect developing countries.
Therefore, so as not to undermine developing countries’ faith in the UNFCCC,Footnote 73 differentiated responsibilities should be accomplished by other means. This could be achieved, for example, by transferring tax revenue to the developing countries, enabling them to implement technical GHG emissions reduction measures.Footnote 74 Moreover, removing subsidies to domestic producers could help to mitigate poverty and socio-economic inequality within many of these developing countries.Footnote 75
Unilateral trade measures under Article 3(5) UNFCCC
What is the meaning of Article 3(5) UNFCCC in the context of the climate change regime? Does it prohibit a meat tax? The clause that ‘unilateral trade measures should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade’Footnote 76 is neutral in effect, as it does not define the types of trade measure that constitute ‘arbitrary or unjustifiable’ discrimination or are a ‘disguised restriction on trade’.Footnote 77 Hertel states that the concrete answer to this question was left for UNFCCC parties to determine at a later stage.Footnote 78 Guidance could be sought from the WTO regime: the wording of Article 3(5) UNFCCC and the chapeau of Article XX of the General Agreement on Tariffs and Trade (GATT)Footnote 79 are similar, and some argue that the two provisions should be interpreted similarly.Footnote 80 However, the scope of Article 3(5) UNFCCC cannot be broader than Article XX GATT because the clause was included in the UNFCCC to ensure that mitigation measures taken by parties are consistent with the principles of the WTO regime.Footnote 81 In addition, the UNFCCC aims primarily to mitigate climate change. Logically, it cannot then go further in protecting free trade than WTO laws, which aim primarily to protect free trade unless explicitly stated otherwise. Thus, if unilateral trade measures are compliant with GATT rules or justified under Article XX GATT,Footnote 82 no separate issues arise under Article 3(5) UNFCCC.Footnote 83
A meat tax under the Kyoto Protocol
The meat tax is in accordance with the Kyoto Protocol, which covers the gases emitted by livestock productionFootnote 84 and explicitly includes the agricultural sector.Footnote 85 The measures named in the Protocol to reach its targets for Annex I countries are either national measuresFootnote 86or are ‘market mechanisms’, which consist of emissions trading, Joint Implementation, and the Clean Development Mechanism.Footnote 87 A regulation of the consumption of meat through a meat tax could qualify as a national measure. The EU might hesitate to implement measures that cause extraterritorial GHG reductions as they do not count towards its own emissions reduction target,Footnote 88 but the Kyoto Protocol does not prohibit such a tax. The same applies to the Doha Amendment to the Protocol.Footnote 89
3.2. A Barrier to International Free Trade?
A meat tax must not only be in accordance with the international climate change regime, but also with WTO law. This regime is completely independent of the international climate change regime.Footnote 90 However, following the Vienna Convention,Footnote 91 the UNFCCC and the Kyoto Protocol could be applied in interpreting the rules of WTO law.Footnote 92
If the EU were to act to mitigate global climate change with a meat tax, this would raise the following issues in WTO law. In the first place, when a tax is imposed the revenue gain to the importing country will generally be lower than would be the case without such a tax, and the EU is therefore implicitly expanding its mitigation efforts to countries outside the EU. Secondly, transaction costs of taxation arise. These costs are not limited to the government in its role as tax collector, but extend indirectly to international meat producers.Footnote 93 Finally, food production in non-EU countries sometimes causes higher GHG emissions than equivalent production within the EU. This is especially true of cattle meat production in the tropics.Footnote 94 Thus, if a meat tax results in a higher burden for such countries, de facto discrimination might arise.
As meat is an agricultural product, the question arises whether the applicable law within the WTO framework covers only the GATT or includes the Agreement on Agriculture (AoA).Footnote 95 For a long time, agriculture had been accorded special treatment in the GATT.Footnote 96 The Uruguay Round of the AoA marked a systemic shiftFootnote 97 and made important strides in creating open markets for agricultural products.Footnote 98 It established binding commitments in three areas: reductions in farm export subsidies,Footnote 99 an increase in import market access for developing countries,Footnote 100 and cuts in domestic producer subsidies in developed countries.Footnote 101 In areas not specifically covered by the AoA, the provisions of the GATT apply.Footnote 102
A tax on meat consumption is neither a domestic producer subsidy nor an export subsidy.Footnote 103 Furthermore, the AoA Market Access provisionFootnote 104 could even facilitate the imposition of a meat tax: a country that applies tariffs below the bound rates that resulted from the AoA may increase those without violating its commitments.Footnote 105 However, even then the most-favoured treatment principle applies.Footnote 106 Essentially, if a meat tax was found to be compliant with the GATT, no separate issues would arise under the AoA.
Unilateral trade measures such as an EU meat tax on domestic and imported meat are permissible under certain circumstances according to the rules of the GATT. Firstly, they must be eligible for border tax adjustment. Secondly, they may not discriminate between imports from another country and the country’s own products (‘national treatment’: Article III GATT). Similarly, all other countries must be treated equally (‘most-favoured nation’:Footnote 107 Article I GATT).Footnote 108 Thirdly, if a violation of GATT non-discrimination rules occurs, justification must be sought under the general exception clause of Article XX GATT.
Eligibility of meat tax for border tax adjustment
Only indirect taxes – taxes that are applied to products and not producers – may be adjusted at the border.Footnote 109 Only these taxes incorporate the ‘destination principle’ (that products should be taxed only in the country of consumption) reflected by the provisions of the GATT in respect of border tax adjustments.Footnote 110
When a tax is uniformly levied on demand of a certain product, it may qualify as an indirect tax adjustable at the border under Articles II:2(a) and III:2 GATT.Footnote 111 Border tax adjustment is normal international practice in such cases.Footnote 112 For example, many countries adjust domestic taxes on cigarettes, alcohol or fossil fuels.Footnote 113
However, if a tax were to be levied on the GHG emissions associated with a certain product rather than on the product itself, the situation would be less clear. There is no case law so far that answers the question of whether such taxes could still qualify as indirect taxes (and therefore as taxes ‘on the product’). In the US – Superfund case, the WTO Dispute Settlement Panel left open the question of whether or not input, to which the tax is applied, must be physically present in the final product.Footnote 114 Academic views with regard to carbon taxes differ.Footnote 115 In Mexico – Taxes on Soft Drinks, the Panel found that Article III:2 GATT ‘requires some connection, even if indirect, between the respective taxes (…), on the one hand, and the taxed product, on the other’.Footnote 116 Most authors argue that carbon taxes (and the same must apply to GHG emission taxes) are indirect product taxes, provided there is a ‘nexus’ between tax and product.Footnote 117 There is a close nexus between a meat tax and meat products for two reasons. Firstly, the tax is paid by consumers and not by producers, which is a characteristic of an indirect tax. Secondly, by internalizing the social cost of carbon, the intention is to limit the consumption of GHG-emission intensive products like meat.Footnote 118 Arguably, therefore, a WTO Dispute Settlement Panel would see all three types of the meat tax as eligible for border tax adjustment.
National treatment
To be WTO-compliant, a meat tax must be consistent with the national treatment obligation under Article III:2 GATT.Footnote 119 To this end, it must first be examined whether the domestic and the imported products are ‘like products’.Footnote 120 Secondly, it must be determined whether domestic and imported like products are treated differently.Footnote 121 Under a meat tax uniformly levied on average GHG emissions per unit for each category of domestic and imported meat, no distinction is drawn between imported and domestic products. For this type of tax, no issues arise under the national treatment obligation. Consequently, the following remarks relate only to scenarios in which a meat tax is levied on actual or on market-based average GHG emissions of a certain meat product, and the tax is higher for imported products (meat from the tropics, for example) than for domestic products.
To determine whether products are considered ‘like products’, four categories of ‘characteristics’ that products might share have been formulated: (i) their physical properties; (ii) consumers’ tastes and habits; (iii) the products’ end-uses in a certain market; and (iv) the international classification of products for tariff purposes.Footnote 122 Within these parameters, are GHG-intensive meat (from the tropics, for example) and domestic low-GHG meat ‘like’ products? Can differences in the way in which two products are produced (so-called ‘non product-related processes and production methods’ (PPMs)) prevent them from being ‘like products’ even if they share all the relevant characteristics (apart from possibly consumer preferences), and even though GHG emissions are not traceable in the final meat product?
In EC – Asbestos, the Appellate Body found health concerns in the form of consumer tastes and habits to be a decisive factor in assessing the likeness between asbestos and other types of industry fibre.Footnote 123 In Automobile Taxes, the Panel held that high-fuel efficient cars are not ‘like’ gas-guzzling cars.Footnote 124 The Panel thus legitimized such regulatory distinctions.Footnote 125 From these cases, it is arguable that if a product pollutes it is not ‘like’ the climate friendly product even if the products are physically alike.
It is, however, questionable whether a claim that GHG-intensive meat is unlike low-GHG meat would stick. Consumer tastes and habits with regard to consumption of GHG-intensive meat are not clear, despite the fact that the environmental risk of meat production is confirmed by extensive scientific evidence.Footnote 126 In a survey conducted by the leading German news magazine, Der Spiegel, asking readers’ views on the regulation of meat consumption through a tax, 68.72% of 15,769 people favoured such a tax.Footnote 127 This indicates a preference for low-GHG meat. On the other hand, a study by the European Commission revealed that only 12% of EU consumers look for climate friendly meat.Footnote 128 Kysar and Vandenbergh state that this is because public awareness of the relationship between consumption and climate change is seriously lacking.Footnote 129 Furthermore, a 2006 FAO Report suggests that society is inadequately informed and lacks sufficient understanding about the scope of the problem.Footnote 130 So far, there is no case law on whether the protection of the environment is a relevant consideration in examining the likeness of products. Overall, it cannot therefore be excluded that GHG-intensive meat (whether measured on market average or actual GHG emissions) and low-GHG meat would be found to be ‘like’ products.
If that is the case, GHG-intensive meat must not be taxed in excess of low-GHG meat (Article III:2 GATT), otherwise a violation of the national treatment principle will be presumed.Footnote 131 ‘Not in excess’ does not even allow for a de minimis difference in the tax rate.Footnote 132 However, justification of a meat tax levied on actual or market-based GHG emissions that apply different tax rates could still be sought under Article XX GATT.
Most-favoured nation
A meat tax must be consistent with the most-favoured nation treatment obligation under Article I GATT, which states that a WTO member must give imported like products from all WTO members the same benefits as are given to like products from any other country.Footnote 133 With a meat tax uniformly levied on average GHG emissions per unit for each category of domestic and imported meat, no distinction is drawn based on the origin of imported products. Clearly, if a meat tax were to be levied on average emissions levels for all meat producers within certain markets, this would infringe the most-favoured nation principle and would need to be justified under Article XX GATT.
A meat tax levied on actual GHG emissions of a certain meat product needs further analysis. Certainly, origin-based differentiation between like products violates the most-favoured nation principle. The WTO Dispute Settlement Panel has held that a derogation from this principle ‘cannot be made conditional on any criteria that are not related to the imported product itself’.Footnote 134 With respect to conditions completely unrelated to origin (such as PPMs) the Panel may find such conditions permissible for derogation under the most-favoured nation principleFootnote 135 in the light of the Panel statement in Canada – Autos.Footnote 136 Thus, GHG emission-related differentiation between meat products, regardless of the country of origination, would not violate the most-favoured nation principle.
Justification under Article XX GATT
Meat taxes levied on actual GHG emissions of certain meat products, as well as meat taxes levied on average GHG emissions on certain markets, would potentially violate the GATT non-discrimination rules and would therefore need to be justified on the basis of Article XX GATT. There is scope for justification under Article XX(g), which allows Member States to adopt policy measures that relate to the conservation of exhaustible natural resources or, alternatively, under Article XX(b), which allows policy measures that are necessary to protect human, animal or plant life or health. If the measure falls within one of these exceptions, it must also fulfil the requirement of the introductory paragraph (the ‘chapeau’ of Article XX GATT). To be permitted under the chapeau, a measure must not cause unjustified or arbitrary discrimination between countries where the same conditions prevail or create a disguised restriction on international trade.
Although climate change mitigation measures have not yet been discussed by WTO bodies,Footnote 137 it is likely that a meat tax to mitigate climate change could be justified under Article XX(b) and/or (g) GATT. For example, in US − Gasoline the Panel agreed that a policy to reduce air pollution resulting from the consumption of gasoline concerned the protection of human, animal, and plant life or health (XX(b))Footnote 138and found clean air to be an exhaustible natural resource (XX(g)).Footnote 139
It would be harder for a meat tax to pass Article XX(b) given the necessity test, which is far more stringent than the ‘relating to’ test of XX(g).Footnote 140 In relation to Article XX(g), the Panel in US − Gasoline found clean air to be an exhaustible natural resource because it was natural and a resource (in that it had value). Although renewable, the Panel felt it could be depleted and was therefore exhaustible.Footnote 141 Since climate is defined as the atmospheric conditions over longer periods of time (or average weather conditions), it is arguably analogous to air quality.Footnote 142 Furthermore, mitigation measures do not aim to protect just the planet’s atmosphere, but also to protect plant and animal species that may disappear as a result of global warming.Footnote 143 Therefore, a stable climate could be considered an ‘exhaustible natural resource’.
The fact that a meat tax on consumption of domestic and imported meat would also address GHG emissions emitted outside the EU does not necessarily work against such regulation. All that is required is a ‘sufficient nexus’ between the GHG emissions in the importing country and the climate change consequences of such GHG emissions for the EU.Footnote 144 This nexus can be established relatively easily: in US − Shrimp, the United States (US) was permitted to protect turtles in India.Footnote 145 As the world’s atmosphere is a global commons and GHG emissions of importing countries cross territorial borders,Footnote 146 climate change caused by GHG emissions from meat production affects not only importing countries, but the EU as well.
The ‘relating to’ test of Article XX(g) GATT requires ‘a close and genuine relationship of ends and means’ and that the measure is not ‘disproportionately wide in scope and reach in relation to the policy objective of protection and conservation’.Footnote 147 An EU meat tax that puts GHG restrictions on the consumption of imported (and domestic) meat for the conservation of the planet’s atmosphere and related climate seems to accurately reflect that relationship.Footnote 148 Based on cases such as US − Shrimp and US – Gasoline, where the test was easily met, climate change legislation should normally pass the ‘related to’ test unless there are blatant inconsistencies or protectionist features in the legislation.Footnote 149 It is by no means necessary to prove that no less restrictive measures exist or that mitigating climate change is the sole purpose of the measure.Footnote 150
According to Article XX(g) GATT, climate legislation on imports must also be ‘made effective in conjunction with restrictions on domestic production and consumption’ (‘even-handedness’).Footnote 151 As long as the EU imposes broadly similar taxes on domestic meat, this condition will be met: identical treatment is not required;Footnote 152 otherwise, it is difficult to see how a violation of the national treatment rule would have arisen in the first place.Footnote 153 Thus, a meat tax on consumption of imported and domestic meat may differentiate insofar as the tax is levied on actual GHG emissions per unit of imported and domestic meat.
Finally, even if all of the conditions under the specific paragraph of Article XX(g) GATT were met, a meat tax that is to be found to violate GATT non-discrimination rules would also have to fulfil the requirements of the chapeau of Article XX.Footnote 154 The chapeau requires that ‘measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade’. A meat tax should fulfil the following conditions in order to comply with the chapeau.
Firstly, such a tax must be sufficiently flexible to avoid ‘arbitrary or unjustifiable discrimination’ and must take into consideration ‘prevailing different conditions in different foreign countries’.Footnote 155 This might force the EU to differentiate between countries that already have their own climate policies in place and others that do not.Footnote 156 Notably, different countries need not necessarily adopt exactly the same climate policies in order to achieve a reduction in GHG emissions.Footnote 157
Furthermore, some argue that the principle of common but differentiated responsibilities must be taken into account in interpreting the chapeau provisions. Arguably, this might require developed country parties such as the EU to differentiate between developing and other countries.Footnote 158 However, it does not follow that a meat tax would have to be substantially reduced or discarded. As discussed, there are less restrictive ways to cope with the principle.Footnote 159 Moreover, it is debatable whether the (historical) factors that set countries apart and warrant differentiation in the climate change context should qualify as ‘prevailing different conditions’ under the GATT.Footnote 160 This may be why the term ‘prevailing conditions’ does not feature in the otherwise similarly worded Article 3(5) UNFCCC. That said, whether a party is a member of the Kyoto Protocol is a relevant consideration when considering prevailing conditions. The fact that the EU ratified the Kyoto Protocol could compel the EU to exclude from its tax developing countries that have also ratified it, because developing countries have not (yetFootnote 161) committed to emissions reduction.Footnote 162 The EU already implements tariff preferences for goods coming from such countries if they have ‘effectively implemented’ the Kyoto Protocol.Footnote 163
Secondly, according to US − Shrimp, ‘good faith efforts’ would be needed from the EU to negotiate an international agreement with all countries affected before considering a unilateral approach.Footnote 164 Thus, the EU may have to propose a meat tax within, for example, UNFCCC negotiations. However, if negotiations fail, the EU could impose a meat tax unilaterally: the conclusion of multilateral agreements is not a prerequisite for justification under Article XX.Footnote 165
Lastly, the implementation of a meat tax must respect basic fairness and due process.Footnote 166 This includes hearing the concerned states and producers with regard to implemented climate policies and production processes.Footnote 167 Additionally, the meat tax must not constitute a ‘disguised restriction on international trade’, which means that the tax must not result in protectionism.Footnote 168
The difficulty of meeting the stringent requirements of the chapeau could be avoided if a meat tax was found to be non-discriminatory and, therefore, in accordance with the GATT rules. In that situation, the EU would not have to seek justification.Footnote 169 Consequently, it might be advisable to levy the meat tax uniformly on average emissions per unit of meat instead of levying it on actual GHG emissions or on average emissions in certain markets.
4. A MEAT TAX UNDER EU LAW
4.1. Conflict with EU Environmental Regulation?
In 2007, political agreement was reached on an EU-wide reduction in GHG emissions by 20% by 2020.Footnote 170 The EU Emissions Trading System (ETS) contributes towards this goal but covers less than half of the GHG emissions. Additional measures are therefore needed to cover the remaining emissions in areas such as agriculture and transport. The target for these sectors would be a 10% reduction in emissions from 2005 levels.Footnote 171
The EU is competent to legislate in the areas of agriculture and the environment,Footnote 172 provided the measures are proportionateFootnote 173 to the objectives of the Treaties.Footnote 174 Moreover, the sustainable developmentFootnote 175 of Europe and of the worldFootnote 176 is one of the main goals of the EU. The objectives of EU environmental policy are, inter alia:
∙ to preserve, protect and improve the quality of the environment;
∙ to protect human health;
∙ to ensure the prudent and rational utilization of natural resources; and
∙ to promote measures at the international level to deal with regional or worldwide environmental problems and, in particular, to combat climate change.Footnote 177
A tax on the consumption of domestic and imported meat, as a means of reducing European and worldwide GHG emissions and thereby mitigating climate change, would clearly fall within this objective, as there are no substantive limits to the exercise of EU environmental competence.Footnote 178
Moreover, the EU legislator is obliged to apply the environmental principles of Article 191 TFEU and Article 11 TFEU to EU secondary legislation.Footnote 179 Article 191 TFEU states that EU policy on the environment shall aim at a high level of protection, while being precautionary and preventative. It further states that environmental damage should be rectified at the source and that the polluter should pay. These environmental principles have enabling and directive functions:Footnote 180 they enable policy makers to encroach on basic rights,Footnote 181 and they direct policy makers to act comprehensively and deliver a high level of protection.Footnote 182 The ‘polluter pays’ principle provides the basis for the use of fiscal instruments for environmental protection.Footnote 183 As interpreted in the EU, the principle posits that environmental protection should not depend on state aid or policies that place a burden on society. It should not target persons for eliminating pollution to which they did not contribute.Footnote 184 Thus, in the Standley case, the European Court of Justice (ECJ) stated that farmers are not obliged to bear all the costs associated with nitrate pollution, but only those caused by their own activities.Footnote 185
In order to pursue a high level of protection, and relying on the ‘polluter pays’ principle, the European Commission could take regulatory action through a tax on meat consumption. Indeed, it could be argued that there is a duty to regulate. Moreover, the precautionary principle substantially lowers the threshold needed for governments to justify action when faced with risks of unknown probability.Footnote 186 In any event, the threshold to justify governmental action towards climate change should be easily met since the risks of climate change are well documented.Footnote 187
However, the Commission has opted for an alternative approach to environmental protection through the Common Agricultural Policy (CAP).Footnote 188 One of the measures introduced to make farming ‘greener’ specifies that farmers obtain financial support only if they adopt sustainable practices to promote soil quality, biodiversity, crop diversification and healthy grassland.Footnote 189 It is questionable whether this measure, based on incentives for technical improvements, will be effective in mitigating climate changeFootnote 190 compared with a meat tax.Footnote 191 The ‘polluter pays’ principle is notably absent from this measure.
The approach is different from that applied towards the car industry. Although livestock emissions and emissions from transport produce approximately the same amount of GHG emissions,Footnote 192 the car industry faces much stronger restrictions than does the meat industry. The car industry does not face a loss of financial aid if it fails to comply with environmental standards, but instead faces penalty payments (‘excess emissions premiums’)Footnote 193 if it does not comply with the mandatory CO2 emission limits set in the Passenger Car Regulation. Furthermore, cars must be furnished with CO2 emissions data.Footnote 194
In 2005, the Commission presented a proposal for a Directive that would require Member States to restructure their passenger car taxation systems to promote sustainability by reforming the tax bases to include elements related to CO2 emissions of passenger cars.Footnote 195 It said that fiscal measures would represent a critical instrument in achieving CO2 reduction targets.Footnote 196 Because passenger cars are a major source of GHG emissions, the introduction of a CO2-sensitive element would be proportionate as it serves the need to achieve the global EC objective of reducing GHG emissions. It would also meet the Community’s commitments under the Kyoto Protocol.Footnote 197 The same arguments to promote sustainability could similarly be applied to a meat tax. Although the proposal found too much political resistance to move forward,Footnote 198 the obstacles to its adoption were of a political rather than a legal nature. As climate change awareness has grown, the prospects of success for a similar measure may have changed in the intervening years. Consequently, the environmental legal framework of the EU does not go against regulating the consumption of meat through taxation.
4.2. Violation of the General EU Principle of Proportionality?
Policy makers are not absolutely free to make choices about the distribution of a policy’s burdens and benefits; the principle of proportionality imposes limits on these choices.Footnote 199 The ECJ has held that, generally, the lawfulness of a Directive depends on whether it is appropriate and necessary to achieve the objectives legitimately pursued by the law and on whether the disadvantages caused are not disproportionate to the aims pursued.Footnote 200 According to Javier de Cendra de Larragán, choices in climate change policies must stand in rational proportion towards the ends, must fulfil the need to achieve a rational proportion in the burden sharing between parties while not impinging in a disproportionate manner upon individual parties, and the decision-making process should involve all affected parties.Footnote 201 In general, legal principles do not require specific political outcomes or pre-determined distributions of burdens and benefits. However, distributional choices can be assessed against the principle of equality, which obliges policy makers to justify any departure from equality in their decision making.Footnote 202
The principle of proportionality might prevent the regulation of meat consumption if a meat tax were to be considered unnecessary. There are three ways in which a regulation might be deemed unnecessary: by the existence of (i) other appropriate (technical) mitigating measures in the agricultural sector; (ii) appropriate regulatory measures (such as the ETS); or (iii) measures in other sectors that are judged to be sufficient to mitigate climate change.
The first possibility finds support in the 2006 FAO Report which suggests technical options for reducing GHG emissions from livestock.Footnote 203 Technical options include sequestering carbon through improved pastures. For methane, the productivity and efficiency of livestock production can be improved through better nutrition and genetics and improved manure management. The best way to control N2O is to maximize the efficiency of human nitrogen use.Footnote 204 The FAO states that, if widely applied, these technical solutions could have a high impact on reducing GHG emissions.Footnote 205 In its latest report, it estimates that a 30% reduction in GHG emissions from agriculture would be possible if producers used the technologies and practices with the lowest emissions intensity.Footnote 206 However, such options are expensive.Footnote 207
The EU plans to concentrate on economic incentives to encourage farmers to introduce technical measures that reduce GHG emissions per produced unit.Footnote 208 However, it is not claimed that these economic incentives will suffice to mitigate climate change. The United Kingdom (UK) Department for Environment, Food & Rural Affairs (Defra) states that there is, in the longer term, limited scope for further reductions in GHG emissions because of the difficulty of delivering further efficiency from complex biological systems. Addressing these challenges would require great effort and a willingness to consider novel approaches.Footnote 209 Some argue that output taxes on emission-intensive agricultural goods would be more efficient than technical measures in dealing with agricultural GHG emissions.Footnote 210
Thus, although technical mitigation measures exist, they are not a panacea for reducing GHG emissions in the agricultural sector to target levels. Hence, it is extremely unlikely that their existence would call into question the proportionality of a meat tax.
The second basis on which a meat tax might be deemed unnecessary is in the view that the Kyoto Protocol and the ETS (the ‘jewel in the EU crown’ of climate change instrumentsFootnote 211) already represent a sufficiently strong system for climate change mitigation, so that there is no need for such a tax. However, these institutions have been highly criticized: Prins and his co-authors claim that the Kyoto Protocol has actually slowed the reduction of GHGs because it has created incentives to transfer production to areas like China with looser emissions norms, so that emissions have increased overall.Footnote 212 They contend that Kyoto threatens to invert the ‘polluter pays’ principle into ‘pay the polluter’.Footnote 213 During the economic crisis, the efficiency of the Kyoto Protocol suffered even more. Prins and his colleagues name, as an example, the exclusion of eastern European countries because of their coal dependency.Footnote 214 According to Nordhaus, none of the policies that have been implemented to date are efficient. The current Kyoto Protocol is seriously flawed in its environmental rationale, is inefficiently designed, and is likely to be ineffective.Footnote 215 Similarly, Baldwin claims that the ETS, in the long term, slows the development of new technologies that may revolutionize environmental performance.Footnote 216 Thus, according to academic commentators, it is by no means certain that current ETSs are sufficient to mitigate climate change so as to render other measures unnecessary.
The efficiency of current ETSs does not render meat regulation unnecessary. Nevertheless, political decision makers seem to view a meat tax as an inappropriate means of reducing climate change, because of its perceived threat to the economy compared with an ETS, and because of their general reluctance to take measures which reduce consumption levels. Instead, political decision makers favour ETSs because they are attractive to different interests – they suit the economically powerful as well as weaker parties as they can sell allowances.Footnote 217 The Australian Labour government introduced carbon taxes in 2012. Both candidates for Prime Minister in the 2013 elections – Abbott and the Labour party candidate, Rudd – promised to abolish these taxes because they were perceived to have slowed down economic growth.Footnote 218 Rudd suggested an ETS instead.Footnote 219 Furthermore, although such systems are inadequate if growing consumption leads to absolute increases in GHG emissions, the solution so far has generally been to try and improve relative efficiency, rather than reducing absolute consumption levels.Footnote 220
The third basis on which a meat tax might be regarded as disproportionate lies in the assumption that measures in sectors outside agriculture make regulation through a meat tax unnecessary. Globally, CO2 emissions account for around 75% of the total anthropogenic emissions. As the energy sector contribution to CO2 emissions is 75%, the main focus has been on reducing emissions in that sector.Footnote 221 According to the European Commission, this sector has a high reduction potential: 99% by 2050 compared with 49% for the agricultural sector. However, the latter percentage only takes into account technical measures, not consumption-related reductions.Footnote 222 Even though the Commission stresses the increasing importance of the agricultural sector in terms of climate policyFootnote 223 and views the re-orientation of consumption towards less carbon intensive food as ‘desirable,’ it has not yet suggested the regulation of meat consumption. It states that if the agricultural sector does not achieve the projected emissions reduction, other sectors would need to reduce even further, despite high costs.Footnote 224
Hence, political decision makers decided to impose the main burden of mitigation on the energy sector as the largest and most evident contributor of CO2 emissions rather than on the agricultural sector in general and the meat industry in particular. They decided in terms of perceived effectivenessFootnote 225 – the ‘necessity-need’Footnote 226 – while disregarding measures leading to a reduction in consumption.
Nordhaus criticizes the fact that some sectors are favoured over others,Footnote 227 which may suggest that the current approach is disproportionate. With regard to the distribution of reductions across industrial sectors, Nordhaus argues that it is important that the costs of emissions reduction are equalized across all sectors and countries. He suggests the imposition of harmonized carbon prices that apply everywhere, either through a universal carbon tax or a cap-and-trade system in which all countries and sectors participate so that all emissions are subject to trade.Footnote 228 Near-universal participation in such programmes to reduce GHGs is crucial to avoid incurring substantial additional costs. Costs of abatement were very low for the initial reductions of GHGs but they would rise sharply for higher reductions.Footnote 229 Hence, according to Nordhaus, the substantial exclusion rather than inclusion of the agricultural sector from mitigation measures could be qualified as disproportionate.
Finally, the proportionality requirement could prohibit a meat tax if it caused disadvantages to the consumer that were disproportionate to the aims pursued.Footnote 230 In order to determine the tax rate, policy makers have to perform a difficult balancing act: the rate must be high enough to be effective, but must not be excessive. However, all Pigovian taxes face calibration difficulties, as Arthur Pigou himself admitted.Footnote 231 They should not of themselves deter such regulation, and do not in the case of other EU policies.Footnote 232
5. A HUMAN RIGHT TO EAT MEAT?
Finally, the question must be addressed whether regulation of meat consumption through a meat tax would violate human rights (especially a ‘right to food’ and the right to private life).
Article 11 of the International Covenant on Economic, Social and Cultural Rights explicitly mentions a right to ‘adequate’ food.Footnote 233 However, the right to adequate food is not to be interpreted expansively as, for example, mandating the availability of a minimum package of calories, proteins and other specific nutrients.Footnote 234 Hence, an interpretation that there is a right to eat tax-free meat under Article 11 is far-fetched.
It could be argued that the consumption of meat is subsumed within the right to a private life.Footnote 235 However, it is important to differentiate between a prohibition on eating meat and a tax on meat which results in more expensive meat. Privacy is a qualified rightFootnote 236 and may be restricted, for example, for the protection of health or for the protection of the rights of others, which could include the ‘right to a clean environment’.Footnote 237 A further possible restriction on the right to privacy is the right to food itself. Livestock consume more from the total food supply than they provide: they consume 77 million tonnes of protein contained in feedstuff that could be consumed by humans, and provide only 58 million tonnes of protein in exchange. With regard to dietary energy, the relative loss is even higher.Footnote 238 Thus, the need to secure food supply would support a reduction in meat consumption, in favour of alternative, higher yield foods. This is particularly important because of the expected negative impact of climate change on food supply.Footnote 239
6. CONCLUDING REMARKS
It is clear that current efforts to stabilize GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system (Article 2 UNFCCC) are insufficient. Similarly, it seems clear that there are few climate change mitigation measures as simple, cost-effective, and with as many positive side effects as reducing meat consumption. In contrast to, for example, technical measures in the transport sector, this measure seems obvious. Yet, at a time when both vegetarianism and meat consumption are increasing, and food cultures are clashing, a meat tax is a highly contentious issue.
A state is not free in its regulatory choices regarding mitigating climate change. It is bound by legal restrictions as to the measures available and, at the same time, by its legal responsibility for environmental protection. This article concentrated on the former and discussed the legal implications of an EU tax on domestic and imported meat. It showed that the legal analysis depends on how the tax is to be levied, and that if carefully designed, a meat tax is proportionate and compatible with international and EU law.
This article has not discussed in any depth the question of whether the failure to regulate meat consumption would affect state responsibility for climate change damage. Nevertheless, this question should be kept in mind. The failure to implement a meat tax as a mitigation measure is not just a violation of the ‘polluter pays’ principle and the principle of equality. Conflict could occur with regard to the EU’s human rights duty to protect its citizens against climate disasters,Footnote 240 and its duty not to cause transboundary harm.Footnote 241 Given the clear contribution of meat products to global warming and the equally clear foreseeability of the damaging consequences of climate change, the EU should seriously consider such a measure as a means of taking reasonable careFootnote 242 towards mitigating climate change.Footnote 243 Finally, it is important to note that even if a meat tax does not materialize in the near future, many of the lessons emerging from this analysis are transferable to proposals regarding the taxation of other GHG-intensive consumption goods.
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