The Vikings have landed – Denmark's decision to tax livestock emissions as a ‘game changer’

Abstract

SummaryFrom 2030, Denmark will impose a carbon tax on livestock emissions as part of a package of measures to address climate change mitigation and adaptation in agriculture. The Danish scheme is particularly noteworthy in being designed with the cooperation of farmers, as well as industry and environmental groups. Revenue generated from the tax will be used to help finance adaptation components of the package. Although the size of the tax is not large, it will have important implications. It increases pressure for a unified EU policy response to the use of carbon taxes for agriculture. Future policy fragmentation may increase tensions among Members over potential ‘carbon leakage’ through the free movement of agricultural products in the single market; not just through imports from third countries. The Danish action opens the door to the commercialisation of ‘green credentials’ for well‐known Danish brands of livestock products. This could have implications for the competitive position of other important suppliers of such products. Without a shared collective response to internalising the costs of greenhouse gas emissions from agriculture, it will be difficult for the EU to chart a harmonious path to achieving its ambitious climate goals for 2030 and beyond.