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The Hidden Costs of Animal-based Diet and How to Distribute Them Better

Title slide of a presentation with the logo of the Ecologic Institute at the top left corner, stating 'Science and Policy for a Sustainable World'. The title reads 'Internalisierung externer Kosten: Wie eine bessere Verteilung der Umweltkosten aus der Produktion von Milch, Eiern und Fleisch gelingen kann' by Aaron Scheid, dated 12. Dezember 2023. The slide has a minimalist design with geometric shapes in shades of grey and blue on the left side.

© Ecologic Institute 2023


The Hidden Costs of Animal-based Diet and How to Distribute Them Better

True cost accounting

Berlin, Germany

As part of an parliamentary evening at the Ursprung restaurant on 12 December 2023, Aaron Scheid presented an analysis of the environmental and economic impact of animal-based food production, the hidden environmental costs and how to distribute them more effectively.

Environmental and economic impact of food production

Aaron Scheid began by detailing the external costs associated with the production and consumption of animal-based foods. He drew on life cycle analyses and identified greenhouse gas emissions and ammonia emissions as the main drivers of environmental impact. His presentation was backed up with quantitative data showing that the annual external environmental costs in Germany amount to at least 22 billion euros.

Reform proposals for tax policy

Scheid also presented two options to internalize these external environmental costs by implementing an excise duty or applying the normal VAT-rate of 19% to all animal-based food products. He discussed the savings potential for the environment when implementing a quantity-based excise tax or a VAT reform that taxes animal-based foods with the regular tax rate. These measures could be beneficial not only ecologically, but also economically by reducing environmental follow-up costs and generating revenue for the state which could in return be used to support the transition of livestock farming, the promotion of sustainable food production and support low income housholds.

Political and social challenges

In conclusion, Scheid highlighted the political and social challenges associated with such a policy change. He emphasized the need for a comprehensive strategy that takes into account both political framework conditions and consumer behaviour.

Aaron Scheid's presentation offered an in-depth analysis of the current problems and made a constructive contribution to the discussion on sustainable solutions in food policy. His contribution was a major impetus for the ongoing discussion on the combination of economic, ecological and health aspects in food production.



More content from this project

Berlin, Germany
Project ID
Sustainable food production, organic farming, impact of agriculture on the climate, food industry, animal welfare, economic follow-up costs, tax reform in the food industry, tax policy reform proposals, consumer behavior, environmental impact
Berlin, Brandenburg, Germany
Life-cycle analysis