Current crises (i.e., climate crisis, COVID-19 pandemic, Russian invasion of Ukraine, and the resulting energy and food shortages) indicate the need for robust, and sustainable supply chains with regional food production and farmland to secure food supply in the European Union (EU). Recent research shows that organic food is more resilient to supply chain disruptions and price fluctuations. In this context, we examine an approach for the sustainable and resilient transformation of agri-food networks: can an adaptation of value added tax (VAT) levels work as a financial incentive to amplify resilient agricultural practices and sustainable dietary patterns? Within the setting of the amendment of the European framework directive on the use of VAT in 2022, we model the effects of adapting the current German VAT system by (1) reducing VAT on organic vegetarian food to 0% and (2) raising VAT on conventional meat and fish to 19%. Based on historical data on organic sales shares and price elasticities, we project sales shares differentiated by product group for each scenario. Then, we calculate expected tax revenues, changes in consumption patterns, and arising total external climate costs in Germany for both scenarios. Our results show that the overall consumption share of organic food would increase by 21.83% due to the modeled VAT reform compared to the status quo. Despite the VAT reduction to 0% on organic vegetarian products, the measure would yield €2.04 billion in extra tax revenues in Germany per year due to the increased taxation on conventional meat products. We find that annual environmental costs of €5.31 billion can be avoided as a result of lower external climate costs of organic and vegetarian food. Therefore, adjusting VAT rates in the food market can be a political instrument to drive organic food consumption and reduce animal livestock. This supports re-territorialization of agriculture and a more sustainable and resilient European food supply.

Although global food consumption costs more in terms of impact on human life than money is spent on it, health costs have not been consistently quantified or included in food prices to date. In this paper, a method to determine the external health costs of nutrition and dietetics is developed by employing the cost-of-illness (COI) and true cost accounting (TCA) approaches. This is done exemplarily for the reference country Germany. The results show that 601.50 € per capita and 50.38 billion € in total external health costs are incurred annually due to nutrition. Overall, most costs are accrued through excessive meat consumption (32.56% of costs), deficient whole grain intake (15.42% of costs), and insufficient uptake of legumes (10.19% of costs). Comparing the external health costs with the external environmental costs in Germany, it can be seen that of the total annual costs of around 153.86 billion €, 67.26% originate from environmental impacts and 32.74% from impacts on human life. In order to achieve the 17 Sustainable Development Goals and to increase family as well as public health, there is a need to internalise these external costs into actual food prices.

Background/Objectives: Every country and territory worldwide is affected by varying degrees of under- and overconsumption of food. A substantial share of the economic burden of unsustainable malnutrition arises from diet-related health impacts, although existing research has largely focused on environmental consequences. Methods: This study addresses this gap by combining cost-of-illness (COI) and True Cost Accounting (TCA) approaches, as well as Global Burden of Disease (GBD) data, to estimate external diet-induced health costs. A comprehensive database covering 204 countries and territories is established, quantifying health costs by disease category and dietary risk factor. Results: The results indicate that USD 1719.94 billion in annual global health costs are attributable to poor diets. This corresponds to an average burden of USD 211.08 per capita per year. Cardiovascular diseases (CVDs) constitute the largest share of costs, followed by diabetes mellitus (DM). In absolute and per capita terms, the United States contributes disproportionately. Regionally, North America bears 44.36% of the global monetary burden, while Oceania accounts for only 1.22%. The highest per-capita costs occur in North America, Europe, and Oceania. The most influential dietary risk factors are the overconsumption of processed and red meat, and the underconsumption of whole grains. A strong positive correlation is observed between diet-related health costs and national prosperity levels. Conclusions: This framework represents a novel approach to standardized and holistic valuation, providing a robust basis for deriving policy-relevant insights to inform sustainable nutrition strategies and advance the United Nations (UN) Sustainable Development Goals (SDGs), especially the second SDG, zero hunger.