> For the complete documentation index, see [llms.txt](https://research.ambitiousimpact.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://research.ambitiousimpact.com/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks.md).

# Reducing diet-related disease through taxes on sugary drinks

## Summary

### Description

High consumption of sugar-sweetened beverages (SSBs) is strongly linked to obesity, type 2 diabetes, cardiovascular disease, and poor oral health. Global consumption has increased sharply in recent decades, driven by increased affordability and availability. Evidence shows that SSB taxes increase retail prices and, in many settings, reduce consumption. When well designed and enforced, they can also encourage manufacturers to reformulate products to contain less sugar.

This report evaluates whether a new charity focused on advocating for SSB taxation could achieve meaningful health impact, particularly in countries where such policies remain absent, poorly designed, or weakly enforced.

### Expected impact

[**Cost-effectiveness**](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/6-cost-effectiveness-analysis.md)**:** Our modeling suggests that advocating for a 20% SSB tax can be cost-effective in some settings, though results vary broadly by country. Across the ten countries assessed, the average cost is estimated at $185 per DALY averted, with six countries meeting our cost-effectiveness bar of $220 per DALY. Estimated cost-effectiveness ranges from $32 per DALY averted in Algeria and $513 in Uruguay, reflecting differences in disease burden, consumption levels, and the effectiveness of tax implementation.

**Scale:** At scale, the intervention is estimated to avert an average of \~66,000 DALYs per year, with country-level estimates ranging from roughly 10,000 to 150,000 DALYs annually.

### Potential for success

[**Evidence base**](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/3-quality-of-evidence.md)**:** There is strong evidence that SSB taxes, when well designed and instituted, reduce consumption of sugary drinks. Multiple meta-analyses find significant associations between higher SSB taxes and lower consumption. There is also strong evidence linking SSB consumption to obesity, diabetes, cardiovascular disease, and tooth decay.

However, direct evidence linking SSB taxes to long-term health outcomes is more limited. Most studies focus on changes in consumption rather than on downstream health effects, which are typically informed through modeling rather than directly observed. Evidence on substitution toward artificially sweetened beverages (ASBs) is mixed, and while substitution likely occurs, its net health impact remains uncertain.

Overall, the evidence supports the conclusion that SSB taxes reduce harmful consumption, but with some uncertainty around the size of resulting health benefits.

[**Theory of change**](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/2-theories-of-change.md)**:** A new charity would advocate for the introduction of SSB taxes in countries where they are absent or weak, and support governments with implementation and enforcement. By increasing prices, these taxes would be expected to reduce consumption directly and may also encourage product reformulation. Reduced intake of sugary drinks would in turn very likely lower the risk of obesity, diabetes, cardiovascular disease, and oral disease.

This is a high-risk, high-reward intervention. Based on past advocacy efforts, we estimate a 9% probability of successfully passing a new SSB tax in a given country. However, once implemented, such taxes are likely to persist, with a low annual risk of repeal.

### Neglectedness

[**Existing activity**](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/5-existing-activity-funding-and-geographic-assessment.md)**:** SSB taxation remains underused globally. Only 44 countries have implemented SSB taxes in line with best practices, while a further 71 countries apply less targeted taxes with limited impact. Meanwhile, sugary drinks become increasingly affordable, particularly in low- and middle-income countries (LMICs), contributing to continued rising consumption.

[**Geographic fit**](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/5-existing-activity-funding-and-geographic-assessment.md)**:** Our preliminary geographic assessment prioritizes countries based on SSB-related health burden, neglectedness, and potential tractability in each country. This model suggests the following top ten countries for this work: Senegal, Cuba, Germany, Trinidad and Tobago, Japan, Kuwait, Jordan, Uruguay, Algeria, and Costa Rica. Only six of these countries meet our cost-effectiveness bar (Senegal, Cuba, Germany, Japan, Jordan, and Algeria).

### Relevance

**Strategic value to AIM:** This intervention has limited additional strategic value for AIM, given it overlaps with earlier work on policy-based public health interventions such as [alcohol regulation](https://3394c0c6-1f1a-4f86-a2db-df07ca1e24b2.filesusr.com/ugd/9475db_9764c3985ff04dcd904471097fc478e7.pdf), [tobacco taxation](https://9475dbf4-555e-4808-9886-5f8ee815cc82.usrfiles.com/ugd/9475db_a1f6dde1f00e4e768b807327dd17a13e.pdf), and [salt intake reduction](https://forum.effectivealtruism.org/posts/bML3rQeofAMC9grBF/advocacy-for-salt-intake-reduction-aim-top-idea-2024).

**Fit for the CEIP:** This idea is likely to appeal to founders interested in policy advocacy and systems change. It would not require technical medical expertise, but it would require comfort with political engagement, long timelines, and uncertainty. Implementation would involve substantial stakeholder engagement and relationship management. Previous experience in lobbying would be beneficial, though not essential.

### Other

[**Expert views**](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/4-expert-views.md)**:** Academic experts strongly favor prevention over treatment and emphasize population-level policies, particularly SSB taxation, as the most effective tools. They point to evidence from countries such as Mexico and South Africa, where SSB taxes have reduced consumption and prompted industry reformulation. However, experts broadly agree that securing government adoption of SSB taxes is difficult, citing industry influence, political resistance, concerns about regressivity, and context-specific constraints such as limited access to safe drinking water in LMICs or product substitution in high-income countries.

Non-profit experts describe the field as underfunded and neglected. They estimate that advocacy campaigns typically take 1.5–5 years before achieving success and face significant barriers prior to passage, though they also note that once an SSB tax is implemented, repeal is unlikely.

[**Implementation factors**](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/7-implementation.md)**:** Access to relevant stakeholders and political tractability are the main implementation challenges. Limited access to decision-makers contributes to the low probability of success typical of policy advocacy efforts. There are also moderate concerns about weak feedback loops and the complexity of scaling policy-focused advocacy.

## Crucial considerations

### Poor enforcement of SSB taxes in LMICs

**We do not have a clear estimate of how effectively SSB taxes are enforced in LMICs over the medium to long term.** In general, we expect enforcement and tax compliance to be weaker in LMICs due to constraints in state capacity (See [Section 3.2](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/3-quality-of-evidence.md)). The only data point we have of enforcement rates in LMICs comes from a conversation between CEARCH and the Ghana Tax Authority. Although this discussion focused on importers, CEARCH applies the findings to retail markets more broadly. Based on this discussion, Ghana’s compliance rate was estimated at 30%.

**We also lack evidence on how effective a CE-incubated charity would be at improving tax enforcement.** CEARCH estimates that a full-time charity could increase compliance by around 14%, but this figure is based on expert judgement rather than empirical evidence. At present, we do not have additional data to validate or refine this estimate.

In our modeling, we therefore use the Ghana-based 30% compliance estimate as a baseline and apply a 14% increase to reflect the potential contribution of a new charity. We then adjust this figure further using country-level Regulatory Enforcement scores from the World Justice Project’s Rule of Law Index to account for differences in expected enforcement capacity relative to Ghana.

### 20% tax or 10% tax?

**A new charity would advocate for a 20% SSB tax, in line with World Health Organization recommendations. In practice, though, many countries have implemented lower tax rates.**

Table 1 presents estimated cost-effectiveness under both a 20% tax (the preferred scenario) and a 10% tax. Under the lower tax rate, the number of countries meeting our cost-effectiveness bar falls from six to five.

**Table 1: Estimated cost-effectiveness of SSB taxes at 10% and 20% ($/DALY averted)**

| Tax rate | Average | Senegal | Cuba | Germany | Trinidad and Tobago | Japan | Kuwait | Jordan | Uruguay | Algeria | Costa Rica |
| -------- | ------- | ------- | ---- | ------- | ------------------- | ----- | ------ | ------ | ------- | ------- | ---------- |
| 10%      | $370    | $160    | $179 | $106    | $660                | $72   | $577   | $273   | $1,025  | $64     | $587       |
| 20%      | $185    | $80     | $90  | $53     | $330                | $36   | $289   | $136   | $513    | $32     | $294       |

Note: Our cost-effectiveness bar is $220 per DALY averted.

### Substitution to ASBs, other sugary products, and harmful non-sugary products

**We are uncertain about the proportion of SSB consumers that would switch to ASBs, other sugary products, or harmful non-sugary products (e.g., alcohol). These substitution effects could reduce some of the health gains associated with SSB taxation.**

There is evidence that some consumers switch to ASBs as SSB prices rise (see [Section 3.3.2](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/3-quality-of-evidence.md)). Other evidence suggests that SSB consumption may be partially replaced with alcohol (see [Section 3.5.3](/reducing-diet-related-disease-through-taxes-on-sugary-drinks/reducing-diet-related-disease-through-taxes-on-sugary-drinks/3-quality-of-evidence.md)). In addition, experts noted that in high-income countries, consumers may substitute SSBs with other sugary products, such as sweetened coffee or yogurt. However, we did not find any robust empirical evidence quantifying these patterns and existing estimates of the proportion of consumers who make these switches vary widely.

We attempt to account for these substitution effects in our cost-effectiveness-analysis, but the magnitude of the effect remains highly uncertain. In the absence of stronger evidence, we follow CEARCH’s assumption that substitution could reduce the health impact of SSB taxation by 30%. Our results are sensitive to this assumption. Table 2 presents a sensitivity analysis illustrating how different substitution rates affect estimated cost-effectiveness.

**Table 2: Sensitivity analysis of substitution effects on cost-effectiveness ($/DALY averted)**

| Substitution rate    | Average | Senegal | Cuba | Germany | Trinidad and Tobago | Japan | Kuwait | Jordan | Uruguay | Algeria | Costa Rica |
| -------------------- | ------- | ------- | ---- | ------- | ------------------- | ----- | ------ | ------ | ------- | ------- | ---------- |
| 10%                  | $144    | $62     | $70  | $41     | $256                | $28   | $224   | $106   | $399    | $25     | $228       |
| 20%                  | $162    | $70     | $79  | $46     | $289                | $32   | $252   | $119   | $449    | $28     | $257       |
| 30% (Current model)  | $185    | $80     | $90  | $53     | $330                | $36   | $289   | $136   | $513    | $32     | $294       |
| 40%                  | $216    | $93     | $105 | $62     | $385                | $42   | $337   | $159   | $598    | $37     | $343       |
| 50%                  | $259    | $112    | $126 | $74     | $462                | $51   | $404   | $191   | $718    | $45     | $411       |
| 90% substitution[^1] | $1,296  | $560    | $628 | $369    | $2,308              | $253  | $2,020 | $955   | $3,589  | $225    | $2,055     |

Note: Our cost-effectiveness bar is $220 per DALY averted.

[^1]: 90% represents the level of substitution at which the intervention is no longer cost-effective in any of our modeled countries.


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