Danish proposal for a tax on farm emissions

On 21 February, an expert group appointed by the Danish government unveiled its conclusive report, presenting three proposed models for a CO₂e tax on agriculture. The group’s mandate was to determine the most effective ways for the agricultural sector to contribute towards Denmark’s goals of a 70% reduction in greenhouse gas emissions by 2030 and achieving climate neutrality by 2045.

The three main models all suggest a tax on greenhouse gas emissions ranging from DKK 250 to 750 per ton, combined with deductions and subsidies funded through the restructuring of agricultural support. If they are fully implemented their potential to reduce emissions are between 2.4 and 3.2 million tons of CO₂e by 2030.

“In our work, we have placed emphasis on specifying models that, to varying degrees, balance the consideration of achieving the socio-economically cheapest goal with the consideration of reducing the burden on agriculture, the risk of production decline and leakage of greenhouse gas emissions abroad,” said Michael Svarer, professor of economics and chairman of the expert group.

Danish Ministry of Taxation, press release, 21 February 2024: https://skm.dk/aktuelt/presse-nyheder/pressemeddelelser/ekspertgruppen-p...