Denmark Introduces the First Carbon Tax on Livestock Emissions

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Denmark’s government has approved a plan to introduce the world’s first carbon tax on farm emissions. This is a significant step towards reducing the country’s environmental impact, mainly due to its large pork and dairy industries.

Agriculture is the main source of pollution in Denmark, despite its high export of dairy and pork products. To address this, the government will start taxing each cow 672 krone ($96) annually from 2030. This tax is based on the greenhouse gases cows produce. The plan also includes a 40 billion krone ($3.7 billion) investment in environmental projects like tree planting and creating wetlands.

The tax will start at 300 krone ($43) per tonne of CO2-equivalent emissions in 2030 and rise to 750 krone ($107) by 2035. Initially, there will be a 60% tax break, making the actual charge 120 krone ($17) per tonne in 2030, increasing to 300 krone ($43) by 2035. For example, a typical Danish dairy cow producing about 5.6 tonnes of CO2 per year will pay a fee of 672 krone ($96) at first, rising to 1,680 krone ($241) by 2035.

While the Danish dairy industry supports climate goals, there are mixed feelings about using taxes to achieve them. Some worry about the impact on competition and effectiveness. Critics argue the policy is complex and may deter immediate investment in green technologies. The revenue from the tax in the early years will help the farming industry transition to better practices. There is also a call for the tax system to align with EU rules to ensure Danish farmers remain competitive. Denmark’s new tax plan could influence other countries considering similar environmental policies.

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