The influence of a Gross Carbon Added Tax on food products

The Carbon Added Tax (CAT) is a cascaded-product-tax system, similar in design to the well-known Value Added Tax (VAT), but taxes embodied carbon instead of value. This report investigates the impact of a VAT for CAT substitution on prices of food products for 2030. In general, it can be said that prices for animal products will increase substantially, e.g. 16% for 24% for respectively milk and steak. On the other hand, prices for common fruits and vegetables go down (1-3%). As the Gross Carbon Added Tax (partially) substitutes VAT, price reductions never exceed 6% (VAT in the Netherlands).