Denmark imposes the first carbon price on agriculture
From 2030 farmers will have to pay 120 Danish krone (€16) per metric ton of emitted carbon dioxide equivalent, rising to 300 krone (€40) from 2035 onwards. The government will also provide €5.3 billion to reforest 250,000 hectares of agricultural land by 2045, set aside 140,000 of lowland by 2030, and buy out certain farms to reduce nitrogen emissions.
It's not a terribly high carbon price, but it's encouraging to see any price applied to agriculture. That's been a challenge that we've discussed with regards to the Energy Innovation Act, which exempts agricultural emissions. It's difficult for a few reasons – agricultural emissions aren't very easy to measure (although some approximations could be applied for simplicity), food prices and diets are a sensitive topic, and the agricultural industry has a lot of lobbying power and influence.
The Politico story notes that it's particularly important in Denmark, which already gets over half of its electricity from wind, and so agriculture is a relatively big source of emissions:
Copenhagen is a pork and dairy export giant, with agriculture forecast to account for 46 percent of emissions by 2030. Experts believe the carbon tax will slash 1.8 million tonnes of that in 2030, its first year of operation, enabling Denmark to meet its target of cutting 70 percent of its total emissions by that year.
A target of 70% emissions cuts by 2030 and net zero by 2045 (and net negative by 2050) is an impressive climate commitment! It's great to see this pioneering carbon pricing leadership from Denmark, including a great reforestation plan (yay for healthy forests!) 🤓
Just to update this story, the Danish price on agricultural climate pollution is now going into effect.
Denmark, known for its inventive restaurants and elegant design studios, is about to become known for something more basic: the world’s first belch and manure tax.
That’s because there are five times as many pigs and cows in Denmark as there are people. Nearly two-thirds of its land is taken up by farming. And agriculture is becoming its largest share of climate pollution, putting lawmakers under intense public pressure to reduce it.
So now, Denmark’s unlikely coalition government, made up of three parties from across the political spectrum, has agreed to tax the planet-heating methane emissions that all those animals expel through their poop, farts and burps. The measure, under negotiation for years, was passed by the Danish Parliament this month, making it the only such climate levy on livestock in the world.
Carbon Brief has a detailed Q&A about how it will work. It's a sort of industry-specific fee and dividend, with a $45/ton CO2-equivalent starting price, but 60% rebated equally based on the type of livestock's average emissions. So the most emissions-efficient farms will have almost no net costs.
It's exciting to see the world's first agricultural climate pollution price go into effect 🤓
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