Major pork and dairy exporter Denmark plans to introduce a tax on livestock carbon dioxide emissions from 2030. This would make Denmark the first to initiate a CO2 tax on agriculture. Reuters reports the government said it hopes to inspire others to follow.
The tax, first proposed in February by government-commissioned experts, is supposed to help Denmark reach a legally binding 2030 target of cutting greenhouse gas emissions by 70% from 1990 levels, the article said.
Late on Monday, the government reached a compromise with farmers, industry, labor unions and environmental groups on policy linked to farming, the country’s largest source of CO2 emissions.
Reuters reports that Taxation Minister Jeppe Bruus of the centre-left Social Democrats said, “We will be the first country in the world to introduce a real CO2 tax on agriculture. Other countries will be inspired by this.”
Political experts expect a bill to pass following the broad-based consensus, but it is still subject to approval by parliament.
The deal proposes a tax on farmers of 300 Danish crowns ($43.16) per metric ton of CO2 in 2030, increasing to 750 crowns by 2035.
In return, farmers will be entitled to an income tax deduction of 60%, meaning the actual cost per metric ton will start at 120 crowns and increase to 300 crowns by 2035, Reuters reports. Subsidies will be made available to support adjustments in farm operations.
Danish farmers had expressed concerns that the climate goals could force them to lower production and cut jobs, but Reuters said the farmers said the compromise makes it possible to maintain their business.
Earlier this month, New Zealand dismissed plans to introduce a similar tax after facing pushback from farmers.
