Palm oil and dietary change: Application of an integrated macroeconomic, environmental, demographic, and health modelling framework for Thailand. (February 2019)

• Record Type: Journal Article
• Authors: Jensen, Henning Tarp; Keogh-Brown, Marcus R.; Shankar, Bhavani; Aekplakorn, Wichai; Basu, Sanjay; Cuevas, Soledad; Dangour, Alan D.; Gheewala, Shabbir H.; Green, Rosemary; Joy, Edward J.M.; Rojroongwasinkul, Nipa; Thaiprasert, Nalitra; Smith, Richard D.
• Is Part Of: Food policy. Volume 83(2019)
• Page Start: 92
• Page End: 103
• Publication Date: 2019-02
• Subjects: Food supply -- Periodicals; Food security -- Periodicals; Food -- Quality -- Periodicals; Food Supply -- Periodicals; Alimentation -- Périodiques; Electronic journals; 338.1905
• DOI: 10.1016/j.foodpol.2018.12.003
• Languages: English
• ISSNs: 0306-9192

Abstract

Highlights: Fully integrated Macroeconomic-Environmental-Demographic-health model. Palm oil sales tax creates dietary and health improvements. Palm oil sales tax causes temporary economic losses and adverse environment impacts. Policymakers should consider trade-offs when using fiscal food policy instruments. Fiscal food policy research should include both food and non-food policy indicators. Abstract: Palm oil is a cooking oil and food ingredient in widespread use in the global food system. However, as a highly saturated fat, palm oil consumption has been associated with negative effects on cardiovascular health, while large scale oil palm production has been linked to deforestation. We construct an innovative fully integrated Macroeconomic-Environmental-Demographic-health (MED-health) model to undertake integrated health, environmental, and economic analyses of palm oil consumption and oil palm production in Thailand over the coming 20 years (2016–2035). In order to put a health and fiscal food policy perspective on policy priorities of future palm oil consumption growth, we model the implications of a 54% product-specific sales tax to achieve a halving of future energy intakes from palm cooking oil consumption. Total patient incidence and premature mortality from myocardial infarction and stroke decline by 0.03–0.16% and rural-urban equity in health and welfare improves in most regions. However, contrary to accepted wisdom, reduced oil palm production would not be environmentally beneficial in the Thailand case, since, once established, oil palms have favourable carbon sequestration characteristics compared to alternative uses of Thai cropland. The increased sales tax also provokes mixed economic impacts: While real GDP increases in a second-best Thai tax policy environment, relative consumption-to-investment price changes may reduce household welfare over extended periods unless accompanied by non-distortionary government compensation payments. Overall, our holistic approach demonstrates that product-specific fiscal food policy taxes may involve important trade-offs between nutrition, health, the economy, and the environment.