A new report from the Ministry of Finance indicates that the planned green tripartite agreement could have significant consequences for agriculture, especially in the production of cattle and pigs. According to the calculations, cattle production will decrease by 9.3 percent and pig production by 6.3 percent by 2035, primarily due to CO2 taxes, subsidies for feed additives, and regulation of manure.
Environmental economist Lars Gårn Hansen from the University of Copenhagen points out that the expected production decline is relatively modest compared to previous recommendations from green economists. He, along with the Economic Council, recommended a larger reduction through a tax of 1200 kroner per ton of CO2 equivalent, which could have led to a 25 percent reduction in the number of agricultural animals.
The problem, according to Lars Gårn Hansen, is that the current agreement has chosen to focus on protecting production and employment in agriculture, which reduces the climate effect and increases costs for society. The agreement includes significant economic reimbursements to farmers as well as tax levels of 300 kroner in 2030 and 750 kroner in 2035, accompanied by a 60 percent deduction. According to Gårn Hansen, this deduction is the main reason why the decline in agricultural production is not greater.
However, Senior Advisor Tavs Nyord from the think tank Concito sees the results as significant. He estimates that the decrease in the cattle population could reduce CO2 emissions by 1.1 million tons of CO2 equivalents in 2035, which will have a significant impact on Denmark’s national climate accounts. Nyord even expects that the overall reduction in animal production could be even greater, as the Ministry of Finance’s calculations have not taken into account a large planned conversion of agricultural land to forests. This conversion, involving the extraction of 250,000 hectares of agricultural land, as well as tighter nitrogen regulations, will likely put further pressure on livestock production.
Therefore, the future of agriculture seems to be characterized by several different pressure factors, which could lead to further reductions in animal production, concludes Tavs Nyord.