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The need for a tax on harmful products

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Indian Finance Minister, Pranab Mukherjee, who placed a tax on coal production in 2010 (Image via Wikimedia Commons)

Following suit from India, it would be advantageous to place a tax on coal production, writes Michael Dello-Iacovo.

PARTICULATE MATTER from coal is known to cause severe negative health effects, especially in those most exposed such as miners and residents near coal power plants. In 2012, 670,000 people died prematurely as a result of breathing in particulate matter from coal in China alone. The damage to the environment and individuals’ health is estimated to be 260 yuan ($55 AUD) per ton of coal produced.

In 2010, India launched a 50 Rupees ($1 AUD) tax on the production of coal per ton. This tax wasn’t implemented by the Environment Minister, but rather the Finance Minister, Pranab Mukherjee. Their logic was simple — burning coal affected the health of Indians (both relating to particulate matter and climate change). To pay for these health costs and to finance clean energy alternatives, they were going to have to source the money from somewhere. Mukherjee figured that they may as well tax the cause of the issues. Interestingly, this tax went through with little opposition and so it was increased several times, reaching 400 Rupees ($8 AUD) in 2016. In addition to funding clean energy and environment initiatives, this tax should also serve some role in directly incentivising clean energy by making coal more expensive.

I propose not only that Australia implements a tax on coal production (being fully aware that Australia has already repealed a carbon tax), but that Australia implements a tax on animal products for the same reasons. Animal agriculture is one of the leading causes of climate change – arguably even greater than coal – and is also a major contributor to the public health burden of Australia (including cardiovascular disease, type 2 diabetes, and cancer). To pay for these costs and to fund cleaner, healthier and less cruel food sources, we urgently need to consider a tax on animal products.

Some examples of how the money could be used include support for farmers seeking to transition to non-animal-based farming or other industries, research into plant-based food technology and cellular agriculture (growing animal products directly from cells rather than breeding an animal) and reforestation programs. From 1988 to 2009, 93 per cent of deforestation in Queensland was the result of land clearance for livestock grazing. Taxing the animal agriculture industry to pay for this damage strikes me as common-sense policy.

As I have outlined, the external cost of producing coal in China is well known and it is likely to be similar in Australia on a per ton basis. However, the external cost of producing animal products is relatively more ignored. No studies exist which quantify the external costs of animal products in Australia and examine the costs and benefits of working to reduce their consumption, besides my own rough estimate in the Australian Vegans journal. This research is a matter of urgency, as the cost may be even greater than coal, which would suggest that we should be putting far more attention and effort into the effects of the animal agriculture industry that we currently are.

Understandably, such a tax would be unpopular, but it shouldn’t be. I’ll leave you with this question: why support a tax on fossil fuels, which cause harm to people’s health and the environment, but object to a tax on animal products, which cause harm to people’s health, the environment and the health of the 500 million animals each year in Australia alone?

Michael Dello-Iacovo is a PhD candidate in space science at UNSW Sydney, running as a candidate at the forthcoming NSW State Election.

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