– It will be very interesting to follow and can be a guide for the EU, says Mark Brady, docent in economics who researches agricultural policy and environmental effects.
The background to the Danes’ proposal is that the country must reduce its emissions sharply in order to reach its climate goals. The Danish government therefore wants to force Danish companies, including farmers, to take greater responsibility for reducing their emissions, and at the same time favor the development of climate-friendly technology.
Fear of bankruptcies
By the summer, a decision on new agricultural regulations can be hammered out and Denmark’s plans are unique, according to Mark Brady.
– Agriculture has traditionally not been affected by emission taxes like other industries. Instead, farmers have been paid to reduce their emissions through various environmental subsidies.
It is connected to the fact that most farms have traditionally been small-scale family businesses, according to Brady.
– There has been a political fear of driving farmers into bankruptcy, that it would hit individuals very hard, compared to industries run by large companies with greater opportunities to bear their costs.
“Are reductions needed throughout the EU”
But as European farms get bigger and bigger, the question of an environmental tax at EU level becomes increasingly relevant, Mark Brady believes.
– It is difficult to achieve existing environmental goals with only voluntary commitments. However, a tax can be compensated by redistributing the revenue to support climate investments.
However, Brady does not see introducing a national climate tax on Swedish agriculture, according to a similar model as in Denmark, as a good idea.
– Swedish agriculture accounts for a fraction of the EU’s total agricultural emissions and our conditions to compete on the world market are much worse. If there is to be an effect on the climate, reductions are needed throughout the EU, and compensatory measures so that the emissions do not move abroad. For example tax on imported products.