Denmark has taken a bold step in addressing climate change by announcing the world's first carbon tax on livestock emissions. Starting in 2030, Danish farmers will be required to pay a tax on the greenhouse gases emitted by their cows, sheep, and pigs. This groundbreaking decision aims to reduce the country's greenhouse gas emissions by 70% from 1990 levels by 2030, as stated by Taxation Minister Jeppe Bruus.
The tax will begin at 300 kroner ($43) per metric ton of carbon dioxide equivalent in 2030 and increase to 750 kroner ($108) by 2035. However, due to an income tax deduction of 60%, the actual cost for farmers will start at 120 kroner ($17.3) per metric ton and rise to 300 kroner by 2035. This measure specifically targets methane emissions, which are particularly potent in trapping heat in the atmosphere. According to the U.S. National Oceanic and Atmospheric Administration, methane traps about 87 times more heat than carbon dioxide over a 20-year period.
The decision to implement this tax comes after months of negotiations and protests by farmers across Europe against climate change mitigation measures. The Danish government reached a compromise with representatives from the farming industry, unions, and environmental organizations. The Danish Society for Nature Conservation hailed the agreement as a "historic compromise" that lays the groundwork for restructuring the food industry beyond 2030.
Livestock farming is a significant contributor to global methane emissions. The U.N. Environment Program reports that livestock account for about 32% of human-caused methane emissions. In Denmark, a typical cow produces 6 metric tons of carbon dioxide equivalent per year. The country, known for its large dairy and pork exports, will also tax pig farmers, although cows produce significantly higher emissions than pigs.
This move by Denmark stands in contrast to recent developments in New Zealand. The island nation had previously passed a similar law set to take effect in 2025 but recently removed it from the statute books following criticism from farmers and a change in government. New Zealand has opted to explore alternative ways to reduce methane emissions from agriculture, excluding it from their emissions trading scheme.
The implementation of this tax is expected to have far-reaching effects on Denmark's agricultural sector and could potentially influence similar policies in other countries. As of June 30, 2022, Denmark had 1,484,377 cows, according to Statistics Denmark. The tax is still subject to approval by the 179-seat Folketing, or parliament, but is expected to pass given the broad-based consensus achieved.
Denmark's decision to tax livestock emissions highlights the growing global focus on addressing all sources of greenhouse gases, including those from agriculture. As countries worldwide grapple with the challenges of climate change, this pioneering move by Denmark may serve as a model for other nations seeking to reduce their carbon footprint and meet ambitious climate goals.
