COPENHAGEN (Reuters) – Denmark’s farmers must reduce production by as much as one-fifth by 2030 if the country is to achieve its ambitious climate goals, a government-commissioned group said on Wednesday.
Denmark, a major pork and dairy exporter, could become the first country in the world to levy an emissions tax on farming, a move that has broad political backing in the country, after New Zealand last year pushed back such a tax to the end of 2025.
The agriculture sector has become a political battleground as the European Union strives to meet its net zero emissions target by 2050. Farmers across the bloc have been protesting for weeks, saying they are facing rising costs and taxes, red tape, and excessive environmental rules.
More than half of Denmark’s land is farmed, with agriculture accounting for about a third of the country’s carbon emissions, according to Danish climate think tank Concito.
A carbon tax on farmers could help Denmark achieve its legally-binding 2030 target of cutting greenhouse gas emissions by 70% from 1990 levels, or around 20 million metric tons of CO2 equivalent.
But such a measure would mean higher costs for farmers and as a consequence lower production, the government advisors said in a report that laid out three scenarios for taxing farmers.
A tax of 750 Danish crowns ($109) per million tons of carbon dioxide (CO2) emitted would have the biggest impact. The group also considered lower taxes of 350 crowns and 150 crowns.
“All our models will mean a reduction in agricultural production and in employment,” said Professor Michael Svarrer, who heads the group. “This will mean relatively little to consumers, it’s the farmers who will be impacted by this.”
The three scenarios would reduce agricultural production by between 6% and 15%, with cattle and pig production falling by around 20% under the harshest taxation scenario.
($1 = 6.8948 Danish crowns)
(Reporting by Isabelle Yr Carlsson, Louise Rasmussen and Stine Jacobsen; Editing by Jacob Gronholt-Pedersen, Kirsten Donovan)
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