November 7, 2024 | ARC2020 |
Denmark has become the first country to introduce a carbon tax on agriculture, signaling a transformative approach to reducing emissions in the sector. The “Green Tripartite Agreement”, forged through collaboration between government, agricultural and environmental organizations, labor unions, and industry leaders, sets ambitious goals for cutting emissions and rethinking land use. Key components include:
- Carbon taxation: Taxes on emissions from livestock, liming and peatlands will be phased in from 2028, with rates designed to encourage the adoption of climate-friendly practices while taking into account technological limitations.
- Green Land Fund: A €5.4 billion fund will support initiatives like afforestation, peatland restoration, and nitrogen reduction. By 2045, 250,000 hectares of forests and 140,000 hectares of rewet peatlands are targeted for transformation.
- Nitrogen regulation: Enhanced policies aim to reduce nitrogen leaching into water bodies, incentivizing land-use shifts from intensive farming to afforestation or low-impact practices.
The tax is projected to reduce agricultural production by 4% by 2030, with 1,500 job losses and a 2% increase in meat prices. However, the robust financial position and adaptability of the Danish agricultural sector mitigates these effects. Nevertheless, critics argue that the agreement focuses too much on technological fixes rather than structural changes such as the promotion of plant-based diets and biodiversity efforts. Weak synergies with the EU's Common Agricultural Policy (CAP) also limit its impact, as CAP funds remain underutilized for climate goals. Despite the gaps, the Green Tripartite Agreement is a crucial step towards making agriculture more sustainable. Its ambitious policies could serve as a model for other nations, provided that financial and political conditions are in place to support long-term implementation.
