In a groundbreaking study, researchers from Chalmers University of Technology in Sweden have proposed a radical shift in food taxation that could revolutionize both public health and environmental sustainability. By removing VAT from healthy foods and imposing levies on those with a negative climate impact, the study suggests that Sweden could prevent 700 premature deaths annually without increasing the overall cost of groceries.
Currently, diets in high-income countries are a significant risk factor for diseases and early mortality. In Western Europe, poor dietary habits cause more deaths annually than alcohol and nearly as many as smoking. Moreover, the environmental impact of food consumption in Sweden is double that of emissions from all passenger car traffic.
Reforming Food Taxes for Health and Climate
The study, conducted by Chalmers University in collaboration with Karolinska Institutet and the Swedish University of Agricultural Sciences, analyzed how economic incentives could be practically implemented. The European Commission’s advisory body, SAPEA, has already recommended such measures to encourage healthier diets.
“Today’s diets are making us sick and negatively impacting the climate. Taxes and subsidies are a good way forward,” said Jörgen Larsson, lead researcher at Chalmers University. He emphasized that the proposed tax shift would not increase the average grocery bill, as selective taxes on certain food groups would be offset by removing VAT on others.
Impact on Public Health and the Environment
The proposed tax shift would remove VAT from foods like fruits, vegetables, legumes, and whole grains while imposing levies on sugar-sweetened beverages, beef, lamb, pork, and processed meat. This approach is expected to reduce the climate footprint of Sweden’s food consumption by about 700,000 tonnes of carbon dioxide equivalents annually, equivalent to an 8% reduction in emissions from passenger cars.
The study estimates that changes in diet could prevent about 700 deaths annually among Swedes under 70, compared to around 200 road traffic deaths each year.
Larsson noted that the figure is conservative, as it does not account for the suffering associated with conditions like obesity or type 2 diabetes. The tax shift would also lead to a significant reduction in meat consumption, returning it to levels seen in the 1990s.
Economic and Social Implications
The proposed reform is designed to be cost-neutral, benefiting both low- and high-income earners. While some foods would become more expensive, others would be cheaper, making the reform more palatable to the public. The study’s findings suggest that the reform could also be economically beneficial for the government through improved public health and reduced healthcare costs.
“The reform is cost-neutral for the government, which improves its chances of implementation,” Larsson explained. In the long term, better public health could lead to reduced sick leave and lower healthcare expenses.
Historical Context and Future Prospects
The study draws parallels with historical shifts in food consumption. For example, beef consumption in Sweden increased by 50% during the 1990s when its price nearly halved after Sweden joined the EU. The researchers believe that similar economic incentives could drive healthier and more sustainable dietary habits today.
The research was published in the journal Ecological Economics and is part of the Mistra Sustainable Consumption research program. The program will hold its final conference in November 2025, featuring a presentation on the food tax shift study.
Examples of price differences with a food tax shift: Beef and lamb prices could increase by 22–26%, reducing consumption by 19%. Sugar-sweetened beverages could become 16–18% more expensive, cutting consumption by 25%. Fruits and vegetables could be 10.7% cheaper, boosting consumption by 4.4%.
Conclusion and Next Steps
The study’s findings offer a promising path forward for countries looking to improve public health and reduce environmental impact without increasing consumer costs. As the Mistra Sustainable Consumption program concludes, the focus will shift to how these findings can be implemented in policy, potentially setting a precedent for other high-income countries.
For more information about the research, including a recorded webinar, visit www.matskatteväxling.se.
