London – Food production is responsible for roughly a quarter of global greenhouse gas emissions. To make consumer habits more sustainable, environmental labeling and carbon taxes work best when introduced together, according to a study coordinated by the University of Trento and published in the Journal of Environmental Economics and Management.
The research involved over 5,000 participants in a simulated online supermarket environment in the UK. Researchers compared the impact of two policy tools: eco-labels displaying the CO₂ emissions of food products, and a carbon tax applied to high-emission items.
"We compared consumer behavior across different scenarios to determine which was most effective at reducing carbon footprints," explains Michela Faccioli, a professor at the School of International Studies and the Department of Economics and Management at the University of Trento.
Using eco-labels alone reduced the shopping cart's carbon footprint by 5.6% without imposing any costs on consumers. A standalone carbon tax achieved a 9.8% reduction, but hit low-income families the hardest. However, combining both measures achieved the same high reduction with a much lower tax rate because the labels naturally steered consumers toward greener choices.
"Redistributing the carbon tax revenue back to households makes the policy proportional, and even slightly progressive relative to income," notes Marco Tomasi, the study’s lead author.
The research also highlighted that households with meat-heavy diets showed the strongest response to environmental labels. "Providing clear, accessible information on a product's climate impact can spark behavioral changes precisely where the potential for emission cuts is greatest," concludes Carlo Fezzi, associate professor of Economics and Management at the University of Trento.
The study, The welfare impacts of carbon taxes and labels on food demand, was co-authored by Marco Tomasi, Michela Faccioli, and Carlo Fezzi of the University of Trento, alongside Ian Bateman of the University of Exeter.