The Ministry of Economics: Carbon tax could cost 3150 jobs in agriculture by 2035
In a memo from the Ministry of Economics, it is stated that the implementation of the green tripartite proposed carbon tax could result in the loss of up to 3150 jobs in agriculture and related industries such as slaughterhouses and dairies in the year 2035. This will happen when the tax is fully phased in at the highest level of 750 Danish kroner per ton of CO2 with a 60 percent deduction.
However, afforestation will have the opposite effect and create around 1000 new jobs, meaning that the overall employment effect for the sector will result in a loss of 2050 jobs in 2035. When the green tripartite was presented, Minister of Agriculture Jacob Jensen and Minister of Economics Stephanie Lose stated that the initiative would cost between 1000 and 1500 jobs in agriculture by 2030. However, they did not clarify how the employment effect would be in 2035 when the tax reaches its highest level.
Stephanie Lose, who has led the government’s efforts regarding the green tripartite, has pointed out that new investments in climate technologies such as pyrolysis and biogas can counteract the loss of jobs resulting from the tax and land withdrawal. There is therefore some uncertainty associated with the employment figures, as the job creation from these new investments cannot yet be quantified.
In the debate about agriculture’s carbon tax, a central point has also been whether the lost jobs will be absorbed in the general Danish economy, which currently has high employment and great job mobility. The Ministry of Economics’ memo estimates that the overall effect of the tax and afforestation on Danish employment will be marginal, with a total loss of 100 jobs in 2035.
The green tripartite, consisting of the government and a number of organizations from agriculture, industry, and the nature sector, has reached an agreement on a CO2 tax on agricultural emissions of 300 Danish kroner per ton of CO2 in 2030 and 750 Danish kroner in 2035. The tax includes a 60 percent deduction, which means that the actual payment for farmers will be 120 kroner in 2030 and 300 kroner in 2035.