Denmark’s recent decision to implement a tax on livestock emissions marks a significant shift in global efforts to combat climate change.

As the first nation to introduce such a measure, Denmark is venturing into uncharted territory in addressing one of the most substantial sources of methane emissions, however, opposition to the plan not least from farmers across Europe could make the wider EU rethink this policy moving forward.

The tax, set to take effect in 2030, will initially charge farmers 300 Danish kroner (approximately £35) per tonne of carbon dioxide equivalent, rising to 750 kroner (£87) by 2035. With a 60% income tax deduction, the effective cost will range from 120 to 300 kroner per tonne over this period.

The policy aligns with Denmark’s target of reducing greenhouse gas emissions by 70% from 1990 levels by 2030. However, it raises several critical questions and concerns:

  1. Economic Impact: How will this tax affect Denmark’s substantial dairy and pork export industry? There are legitimate concerns about potential job losses and reduced competitiveness in global markets.
  2. Food Security: Might this tax lead to increased food prices, potentially exacerbating issues of food affordability and accessibility?
  3. Technological Innovation: Could this policy spur advancements in livestock management and feed technologies to reduce emissions?
  4. Global Precedent: Will other nations follow Denmark’s lead, or will they adopt alternative strategies to address agricultural emissions?
  5. Farmer Support: What measures will be implemented to assist farmers in transitioning to lower-emission practices without jeopardising their livelihoods?

It’s worth noting that New Zealand recently backtracked on similar legislation following farmer protests and a change in government.

The farming lobby in that country was upset that it would upset the delicate balance between environmental ambitions and economic realities.

Speaking at the press conference at which the agreement was presented on June 25, Foreign Minister Lars Løkke Rasmussen described it as the most far-sighted agreement he had ever contributed to.

“It is an extremely long-term project, where we create more nature, more biodiversity, but at the same time we also have in mind that we must have a strong and viable agriculture sector,” he said.

Economy Minister Stephanie Lose anticipated the agreement would see “a realignment of our agricultural and food industry”.

The Danish Society for Nature Conservation has hailed the tax as a “historic compromise”. However, its implementation will require careful monitoring to ensure it achieves its environmental goals without unduly burdening the agricultural sector.

As the world grapples with the urgent need to reduce greenhouse gas emissions, Denmark’s livestock tax represents a significant experiment in climate policy. Its success or failure could substantially influence global approaches to agricultural emissions in the coming years.

[Your Think Tank Name] will continue to monitor this development closely, analysing its impacts and potential applications in other contexts.