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Published on March 1st, 2018 | by Jesper Berggreen


Danish Environmental Economics Council Calls For Tax On Cows — Cars Are Off The Hook

March 1st, 2018 by  

The Danish Environmental Economics Council has released its yearly report and it shows that reductions in greenhouse gas emissions are least costly in the agricultural sector.


Total emissions. Graph: dors.dk

The EU quota system on greenhouse gas emissions dictates that Denmark must reduce emissions by 39% by 2030 in the so-called non-quota sector, i.e. agriculture, transport, and buildings. The agricultural sector is summarized in carbon dioxide equivalents, including gases like methane, perfluorocarbons, and nitrous oxide. The transportation sector includes all types of vehicles. Buildings’ primary emissions are related to heating and producing building materials like concrete.

The report shows the cheapest way to obtain the largest quantitative emission reductions. Reduction costs in agriculture turns out to be relatively low, due to the fact that they are not directly regulated in the first place.

The report suggests that taxes in the agricultural sector be raised dramatically, which some media translated to a “tax on cows.” This is over simplifying things, but it actually does make some sense because passenger cars with internal combustion engines are already heavily taxed (which is also why EVs are slightly taxed to make sure nobody buys them and destroys the tax income from ICE-cars). Thus, further reductions of emissions from cars will be economically very costly as opposed to applying a tax to the some 500,000 dairy cattle in the country, and use that money to convert “farts to fuel,” so to speak.

Biofuels, clean energy, renewable energy, biofuels, biogas, cow manure, waste diversion, Pixley, Calgren, Regensis, Tulare County, DVO, California Energy Commission, dairy industry, San Joaquin Valley

This biorefinery in Pixley, California can produce up to 58 million gallons of ethanol from cow manure annually.

The report shows that it will cost $40 per 1 ton CO2e (equivalents) reduction in the agricultural sector compared to $500 per 1 ton CO2 further reduction in the transportation sector.

With the agriculture, transport, and building sectors responsible for approximately one-third of all emissions each, it would perhaps make sense to tax the agricultural sector more. However, the government is not keen to implement this kind of taxation on the agricultural sector, with the argument that too many in the industry would go bankrupt, which in turn would spur heavy costs in government compensation.

According to DR Newsthe president of the organization Agriculture & Food, Martin Merrild, rejects the proposal more bluntly, calling it: “completely insane!”

Ingeniøren reports that CEO Lars Aagaard of the organization Danish Energy criticizes the lack of considering electric cars:

“If the council had chosen to analyze a more targeted promotion of electric cars, they would have found far lower costs of making the shift in the transportation sector … in the longer term through a general reorganization of car taxation”

Well, at least this report shows very clearly that we should be careful to not only talk about electric cars saving the world, but to take in all available information and compare all the bits and pieces. Not an easy task, but necessary nonetheless. 


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About the Author

Jesper had his perspective on the world expanded vastly after having attended primary school in rural Africa in the early 1980s. And while educated a computer programmer and laboratory technician, working with computers and lab-robots at the institute of forensic medicine in Aarhus, Denmark, he never forgets what life is like having nothing. Thus it became obvious for him that technological advancement is necessary for the prosperity of all humankind, sharing this one vessel we call planet earth. However, technology has to be smart, clean, sustainable, widely accessible, and democratic in order to change the world for the better. Writing about clean energy, electric transportation, energy poverty, and related issues, he gets the message through to anyone who wants to know better. Jesper is founder of Lifelike.dk and a long-term investor in Tesla, Ørsted, and Vestas.

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