Although the bill for the new Danish CO2 tax will first be paid by Danish farmers, it will ultimately be paid by consumers and taxpayers.
The new climate tax will not only lead to slightly more expensive food, but also to restrictions in agriculture and livestock farming. This will have to be compensated, according to initial reactions to the Danish climate plan presented last week.
The Danish climate plan has led to mixed reactions from various responses. According to a report by Landbrug & Fødevarer (L&F), if policies remain unchanged, there is a risk of major job losses in the agricultural sector, although some relief will be achieved by the current proposal.
The financial sector is divided over the impact of the tax on land prices. Some expect the tax to lead to a decline in land values, while others believe prices will remain stable.
Greenpeace criticizes the climate plan, calling it “insufficient”. They argue that the measures do not go far enough to achieve the necessary CO2 reductions and that the agricultural sector is being kept afloat in its current form. According to Greenpeace, fundamental reform is needed to meet climate goals and achieve true sustainability.
The Husmændene, an interest group for small farmers, is also not satisfied with the tripartite agreement. They believe that the scheme places too much burden on farmers without adequate compensation. The organization calls for a reconsideration of the plan and more support for small farmers who find it difficult to bear the extra costs.
On the other hand, the Danish Minister of Climate and Energy has praised the agreement as a “historic agreement” that puts the agricultural sector on a path to sustainability. According to the minister, the tax is a necessary means to achieve Denmark's climate goals and to transform the agricultural sector towards a more sustainable model.
Although the Danish CO2 tax is seen as a step in the right direction for climate policy, it also raises questions about the economic consequences and the feasibility of the measures. The debate between proponents and opponents of the tax remains intense, as Denmark works to strike a balance between environmental obligations and economic feasibility.