The environmental impacts of meat consumption could be rapidly and cheaply reduced if governments applied full VAT on products such as beef, pork, lamb and chicken, a study has shown.

Depending on how the additional tax revenues were redistributed, such a change could cost households as little as €26 (£23) a year, while cutting ecological destruction by between 3% and 6%, the paper found.

Animal-based products have the biggest share of the EU’s ecological footprint related to household diet, which is responsible for almost a quarter of greenhouse gas emissions, more than half of biodiversity loss and phosphorus pollution, and almost three-quarters of water consumption.

Despite this, 22 of the 27 EU member states levy a reduced tax rate on meat purchases, compared with the general level of VAT. In effect this price signal screens citizens from the environmental and social costs of their consumption.

The new study by the Potsdam Institute for Climate Impact Research calculated some of those hidden costs and examined how two possible policy reforms – full VAT levies or a carbon price on food – could affect prices, consumption levels, environmental impacts and costs.

Published in the journal Nature Food on Tuesday, the paper found that the global environmental footprint of meat was substantially higher than plant-based foods in terms of climate impact, biodiversity loss, land use and pollution. The only exception was water use.

The difference in these environmental costs is not adequately reflected in the price of goods on the shelves because such calculations are complex. To overcome this obstacle, the authors of the study said the simplest first step would be to remove tax breaks on the most damaging food – meat.

Those tax breaks vary from country to country. The biggest break for meat consumption is in Ireland, where meat has zero tax compared with a general VAT rate of 23%. Raw meat in the UK is zero-rated compared with the 20% standard for cooked meat in restaurants or processed products. The gap is 20 percentage points in Croatia. In France, it is 15 points, Germany and Italy 12 points, and Spain 11 points. Within the EU, only Bulgaria, Denmark, Estonia, Latvia and Lithuania tax meat at the general VAT rate.

If EU governments ended meat’s VAT privileges, the paper calculates the environmental damage caused by food consumption would be reduced by 3.48% to 5.7%, depending on the type of impact. In the case of the climate, for example, it would cut greenhouse gas emissions by 29.9 megatons of CO₂ equivalent per year, which is about 5% of the total.

The burden on consumers would depend on what is done with the extra tax revenues. Average annual food expenditure per EU household would have to rise by €109 (£95) as a result of the additional VAT. But if the revenues were redistributed through payments to citizens, the overall cost would fall to €26 per year.

An even cheaper system for consumers would be the levying of a carbon price of €52 (£45) on food products, which would bring down net household costs to about €12 a year and have greater environmental benefits. But the authors recognise this will require more complex economic and political calculations, which makes the VAT change a more feasible option in the short term.

In both cases, society would be significantly better off once the costs of reducing environmental destruction are factored in, the researchers said. “Our numbers show the policies we investigated can be effective, but they also reveal that we do not yet fully price in the environmental impacts of meat,” said Charlotte Plinke, an author of the study: “It’s important to have exact information of what the impacts actually are, and then to be transparent about the goals of the policy and the use of revenues.”