Food Carbon Taxation and Distributional Equity: Comparing LCA and IO Approaches

Food systems account for a large share of global greenhouse gas emissions but remain largely outside formal carbon pricing frameworks. This paper develops a household-level microsimulation model to assess the environmental, distributional, and nutritional impacts of a uniform food carbon tax in Ireland. Weekly food expenditures from the 2015 Irish Household Budget Survey (6864 households) are converted into quantities using CPI-adjusted supermarket prices and linked to emissions intensities from both Processed Life Cycle Assessment (LCA) and Environmentally Extended Input–Output (EE-IO) models. The analysis compares the two emissions-accounting approaches and tests whether aggregation bias alters inequality estimates. Results show that food carbon taxation is regressive: under a €56/tCO2 tax, the poorest decile faces median burdens of about 3.8% of income with LCA and 2.2% with EE-IO, compared with 0.5–1% in the richest decile. Nutritional vulnerability is also concentrated among low-income households, whose protein- and energy-linked food expenditures reach 2.0–2.3 times the population mean as a share of income. Despite notable item-level differences between LCA and EE-IO, both methods yield statistically similar inequality outcomes, and aggregation bias is limited. These findings emphasise that distributional effects are driven more by household income patterns than emissions-accounting choices.