A new study from Chalmers University of Technology in Sweden suggests that changing the way food is taxed could save lives and help the planet — without raising the cost of an average grocery basket. The researchers propose removing VAT on healthy foods such as fruit, vegetables, legumes, and whole grains, while introducing levies on foods that harm the climate, including red and processed meat and sugary drinks. Their findings indicate that such a policy could reduce greenhouse gas emissions and prevent around 700 premature deaths in Sweden each year.

In many wealthy countries, unhealthy diets are now a significant cause of disease and early death, responsible for more fatalities than alcohol and almost as many as smoking. At the same time, food production contributes significantly to global warming. In Sweden, emissions linked to food consumption are roughly double those from all the country’s passenger cars. Current policies mostly rely on dietary guidelines, but experts from the European Commission’s Science Advice for Policy by European Academies (SAPEA) have recommended economic measures, such as taxes and subsidies, to encourage healthier eating.

The researchers behind this study, from Chalmers University, Karolinska Institutet, and the Swedish University of Agricultural Sciences, examined how such a reform could work in practice. Their model suggests that lowering prices on healthy foods while taxing high-emission and unhealthy ones would shift consumer habits toward better diets and lower carbon footprints — without increasing overall grocery spending. According to lead researcher Jörgen Larsson, this balance makes the idea more politically realistic and fair to both low- and high-income households.

The analysis focused on four major food groups: fruit and vegetables, whole grains, meat products, and sugar-sweetened drinks. It showed that removing VAT could cut prices for fruit, vegetables, legumes, and whole grains by roughly 11 per cent, encouraging higher consumption — about 10 per cent more for wholegrain bread and 4 per cent more for fruit and vegetables. Meanwhile, new levies on sugary drinks would raise prices by around 17 per cent, reducing consumption by a quarter. The most significant change would come from red meat, where a 25 per cent price increase could cut consumption by nearly a fifth.

This shift in consumption would have tangible health and environmental benefits. The study estimates that eating more plants and less meat could reduce Sweden’s food-related emissions by about 700,000 tonnes of carbon dioxide per year — equivalent to removing nearly one in ten cars from the road. It would also prevent hundreds of deaths from diet-related illnesses, such as heart disease and diabetes, particularly among people under 70. The researchers describe this figure as conservative, noting that improved diet quality would also reduce long-term suffering from chronic conditions.

Importantly, the proposal is designed to be cost-neutral overall. While some foods would become more expensive and others cheaper, the total cost of an average shopping basket would remain about the same. This balance would make the reform more acceptable to the public and fair across income levels. Over time, the government could also benefit from reduced healthcare costs and fewer sick days as public health improves. According to the authors, the Swedish case could serve as a model for other high-income nations looking to promote healthier diets and tackle climate change through smart economic policy.

More information: Jörgen Larsson et al, Cost-neutral food tax reforms for healthier and more sustainable diets, Ecological Economics. DOI: 10.1016/j.ecolecon.2025.108822

Journal information: Ecological Economics Provided by Chalmers University of Technology