Cap and Trade to Improve Dietary Habits

Kristina Lewis and Meredith Rosenthal have a provocative suggestion in this week's New England Journal of Medicine.  Instead of taxing non-nutritious food -- new taxes face seemingly insurmountable political opposition -- they propose establishing a "cap and trade" regime that depends on the free market, much as we have done for sulfur dioxide emissions.  Cap and trade has allowed us to decrease sulfur dioxide emissions by about half, and it's cost far less than standard emission-lowering regulations would have.

The idea is straightforward -- create a target for the total amount of harmful food products, and allow individual manufacturers or marketers to sell to each other the right to incorporate more fat, more calories, or more salt in their products.  That would allow full, free consumer choice, but would tend to increase the prices of unhealthy food while decreasing the prices of healthier alternatives.

Some will consider this a back-door attempt to tax unhealthy food - but it's not.  Obesity and diabetes caused by poor dietary habits have real social consequences and costs; this proposal would be an innovative way for the government to structure a market to improve our health and lower our health care bills.