Denmark is poised to introduce the world’s first emissions tax on livestock, targeting greenhouse gases emitted by cows, pigs, and sheep. This measure, set to begin in 2030, aims to significantly reduce the country’s carbon footprint and set an example for other nations. |
Initial Rate: Farmers will pay approximately $43 per metric ton of carbon dioxide equivalent in 2030.
Increased Rate: The tax will rise to about $108 per metric ton by 2035.
Tax Deduction: Farmers will receive a 60% tax deduction, effectively reducing the rates to around $17 in 2030 and $43 in 2035.
Projected Impact:
Emission Reduction: The tax is expected to cut Denmark’s emissions by approximately 1.8 million metric tons of carbon dioxide equivalent by 2030.
Global Emissions Context: In 2022, humans emitted over 40 billion tons of carbon dioxide.
Government and Industry Response:
Support: The bill has broad consensus support from the center-right government, farmers, industry groups, and unions.
Financial Return: Proceeds from the tax for 2030-2031 will be reinvested into the industry to support green transition initiatives, including the establishment of more than 600,000 acres of new forest areas.
Methane Emission Context:
UN Climate Goals: The UN IPCC calls for a 40-45% reduction in methane emissions by 2030 to limit global warming to 1.5 degrees Celsius.
Livestock Contribution: Livestock accounts for about 32% of human-caused methane emissions, with cattle being the primary source.
Comparative Global Efforts:
New Zealand’s Axed Plan: A similar bill in New Zealand was scrapped by the new center-right government due to pushback from cattle farmers. Instead, New Zealand is focusing on developing a “methane vaccine” and breeding lower-emissions cattle.
Industry Initiatives: Major multinational agricultural companies are setting targets for reduced emissions, which may drive more effective change than direct carbon taxes.
Expert Opinion:
Cost-Effectiveness: Richard Eckard, a carbon farming professor, notes that current research into reducing livestock methane emissions is not yet cost-effective for farmers at current carbon prices. He suggests that industry-driven targets may be more effective than government-imposed carbon taxes.
Conclusion:
Denmark’s innovative approach to taxing livestock emissions marks a significant step in global climate efforts. The tax aims to reduce greenhouse gas emissions while encouraging other nations to adopt similar measures to combat climate change.