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Jun 26, 2024, 1:56pm EDT
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Semafor Signals

Denmark’s radical methane tax hits farmers, but may not lower meat consumption

Insights from Bloomberg, Nature Food, and Al Jazeera

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Denmark cows
Henning Bagger/Ritzau Scanpix/via REUTERS
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The News

In 2030, Denmark is set to become the first country to start taxing farmers for gassy pigs, sheep, and cattle — the methane that livestock animals give out is one of the biggest contributors to greenhouse gas emissions and global warming.

The goal is to reduce methane gas emissions by 70% from 1990 levels, said Denmark’s tax minister, but the new law does not specify how it will change the economic livelihood of farmers.

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

Livestock are a walking climate catastrophe

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Source:  
Bloomberg

Livestock methane emissions are one of the biggest sources of climate change, contributing about 18% of all greenhouse gas emissions, according to Bloomberg. “Even if every other source of warming gasses vanished overnight,” livestock and food production is still “more than enough” to push Earth past 1.5 degrees Celsius above pre-industrial temperatures — a key climate limit — wrote columnist Mark Gongloff. And while methane taxes on livestock could help offset or deter these emissions, a more substantial change may be getting people to eat less meat, or indeed, taxing consumers more to eat meat.

Government can offset farmers’ concerns through other subsidies

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Sources:  
TVMV, Nature Food

Danish farmers are already worried about the economic implications of a carbon tax — sentiments that drove huge farmer protests throughout Europe this year that called foul over the European Union’s green initiatives targeting agriculture. But governments can likely offset the economic losses of any emissions taxes by giving livestock farmers tax rebates and lowering taxes on other products farmers produce, according to one study published in the journal Nature Food. Other proposals include increasing subsidies on fruit and vegetable production to incentivize farmers to grow these as opposed to raising livestock.

New Zealand’s methane tax provides a cautionary tale for Denmark

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Sources:  
Infometrics, Statista, Al Jazeera

New Zealand this month repealed its own methane livestock tax — crafted under former Prime Minister Jacinda Ardern’s government — after New Zealand farmers raised similar concerns about the economic repercussions of the tax as seen in Europe. But New Zealand’s agriculture sector dwarfs Denmark’s, accounting for 5% of GDP compared to about 1.3% respectively, and the current New Zealand government argued that the methane tax could send jobs overseas if it took effect, Al Jazeera reported. The country’s new right-wring cabinet said it would instead invest $245 million in commercializing emission-reduction technology to offset what might be lost by scrapping the methane tax. It’s possible that in Denmark, a smaller agricultural sector may have less sway, but the tax could also have less overall effectiveness.

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