Americans drink about 13.8 billion gallons of sugar-sweetened beverages every year—we’re talking about sports drinks and soda here, just to name a couple of the culprits! That’s about 45 gallons, per person, every year. Across the United States, municipalities are exploring the option of taxing soda as a way to increase revenues and reduce the health care costs associated with type-2 diabetes, heart disease, and strokes.1 Not only do these taxes have the potential to decrease health costs, they are also a way for some cities to raise funds to improve biking infrastructure and public transportation systems. The soda tax is a good example of how health issues and environmental issues are often interconnected.
The Health Costs of Soda
Americans now consume about 200 to 300 more calories daily than they did thirty years ago. According to the Health Department Commissioner of New York, we are “literally drinking [our]selves fat.”2 How could this have happened? A graphic below gives some insight—look at how fast food portion sizes have grown six fold since the 1950s! Sodas are being sold in larger and larger containers, and all of those empty calories add up. Consumption of beverages high in calories but poor in nutritional value is the number one source of added sugar and excess calories in the American diet.3 The consumption of sugar-sweetened beverages has been linked to increased rates of obesity, diabetes and heart disease.4 All told, the medical costs related to obesity in this country are around $147 billion a year.5 There is a compelling case for reducing this expenditure if we can.
What Would a Soda Tax Do?
Previous research on taxing soda has indicated that a one cent (1 ¢) tax on every ounce of sugary drinks —which translates to a 12-cent tax on a standard can— decreases consumption by somewhere between 10 and 25 percent. Earlier in 2012, a research team estimated that the consumption reduction is closer to 15 percent. They estimate that this kind of tax could reduce new cases of diabetes by 2.6%.7 These percentage reductions may seem small, but over the course of ten years they add up and result in “95,000 fewer instances of coronary heart disease, 8,000 fewer strokes, 26,000 fewer premature deaths and more than $17 billion in savings from medical expenditures averted across the U.S. population.” The researchers also estimate that, in addition to money raised from reduced demand for medical care, such a soda tax would have also raised an estimated $13 billion in revenue if enacted in 2010.8
Despite all of the scientific studies that support taxing soda, there is still the hurdle of putting policy into practice. Over 30 States now tax soda and other sugary beverages, but none do it at a rate as high as a one cent per ounce. Previous research suggests that taxes below a one cent per ounce do raise revenue, but are too weak to reduce soda consumption.9 Soda company lobbyists are pressing hard to prevent these laws from passing, and have been successful at stopping high taxes so far.10 In California, things are beginning to get heated as the City of Richmond looks to be the first San Francisco Bay Area city to pass such a tax.11
The Environmental Benefits of a Soda Tax
The health benefits associated with a soda tax are certainly reason enough to institute it. However, most discussions of the soda tax leave out the positive impacts such a tax would also have on the environment. “Consumption of beverages in aluminum, glass, steel and plastic containers in the USA has skyrocketed from just over 250 units per person annually in 1970 to over 670 [in 2007].”12 All of these containers have to be manufactured from resources like bauxite,13 filled with soda, shipped over long distances, and refrigerated. Each step in this process has an associated environmental cost, even if the container ultimately gets recycled after use. American consumers recycle only about 45% of aluminum cans, 31% of severe water shortages .18
Soda taxes have the potential to reduce some of the direct environmental impacts of soda production, particularly if those tax revenues go toward healthy afterschool programs or public transportation. As we may see positive environmental impacts from a decrease in the number of cars on the road, or kids inside using electricity for electronics, a soda tax not only makes sense for our health, it makes sense for our environment. After all, the first of the big three “R’s” is reduce!
