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How much could Danish agriculture CO2 tax affect food prices?

A new model for CO2 emissions tax on agriculture could mean customers pay more for a packet of beef, according to the expert committee which recommended the model.

How much could Danish agriculture CO2 tax affect food prices?
A tax on agricultural CO2 emissions could raise the prices of food items like beef and milk. Photo: Liselotte Sabroe/Ritzau Scanpix

An expert committee on Wednesday presented its proposals for a carbon emissions tax on agriculture, including calculations of how the carbon tax will affect the price of products like meat and milk for consumers in Denmark.

The committee proposed a starting level of 750 kroner per ton emitted, along with two other options: 325 kroner and 125 kroner per ton emitted.

The highest rate, 750 kroner, would result in the price of 500 gram packed of beef increasing by 4.5 kroner, the head of the committee, Michael Svarer, said at a briefing.

For the 325-kroner rate, this would fall to 2.3 kroner. If the tax was 125 kroner per ton emitted, the price of 500g of beef would go up by 1.4 kroner.

For a litre of milk which currently costs 13 kroner, the price increases at each increment of the emissions tax would be 0.6 kroner, 0.3 kroner and 0.2 kroner respectively.

READ ALSO: Danish expert committee proposes CO2 emissions tax for agriculture

On average, the price of dairy and meat products would go up by just under 4 percent by 2030 if the model was imposed.

However, this is not expected to have an impact on inequality once factors like wage increases are taken into account, the committee found.

Any final decision on a CO2 emissions tax on agriculture must be made by parliament in the form of majority support for a bill. The government is not obliged to follow Tuesday’s recommendations.

The numbers should also be treated as a guide rather than hard fact, Svarer noted during the briefing.

“There are many steps you must go through and there’s naturally a lot of uncertainty,” he said.

Prime Minister Mette Frederiksen has previously stated she did not want a green tax to push up food prices.

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COST OF LIVING

Number of ’financially vulnerable’ up in Denmark in 2023

The proportion of people in Denmark who can be considered ‘financially vulnerable’ has risen from 7 percent to 10 percent in one year.

Number of ’financially vulnerable’ up in Denmark in 2023

National agency Statistics Denmark’s annual analysis of living standards in the Nordic country, published Tuesday, shows a notable increase in the proportion of people struggling to make ends meet.

The analysis shows that some 10 percent of the population can be categorised as ‘financially vulnerable’, three percent points more than last year’s 7 percent.

Financial vulnerability is an EU term based on five criteria including whether individuals can afford to pay bills, own a car, go on holiday or pay unforeseen bills for amounts equivalent to around 10,000 kroner.

If three of the five criteria are met, the person is considered financially vulnerable.

The Danish figures reflect the impact on disposable amounts available to people in Denmark from outside circumstances beginning in 2022, according to Anne-Louise Lindkvist, head of marketing and customer services with pensions fund Sampension.

“We have also seen high, albeit falling, inflation this year, which in combination with challenges presented by rising interest and more, has made it hard for many people to get financial ends to meet,” she told news wire Ritzau.

Wage increases – many secured through collective bargaining agreements in early 2023 – have largely protected people in employment from the effects of high prices, according to the data agency. Similarly, most retired people have managed due to solid pensions savings.

But single parents with children living at home are among those most likely to be impacted, the agency found.

All EU countries produce similar reports on the financial health of their citizens annually. Denmark has one of the lowest proportions of financially vulnerable citizens in the union.

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