There need to be changes, but I am not convinced that this will have the desired effects. Its quite possible this leads to a net conversion of farmland to residential or commercial property rather than nature.
The industry might be accustomed to profiting from the subsidy, but that doesn't make them entitled to it! And certainly the industry has had plenty of time to anticipate and adjust to the problems of carbon emissions.
Farming is not a profitable endeavor. There would be a lot less financial advisors in the world otherwise. A carbon tax will either drive up prices or reduce suppliers, increasing prices. Reducing farmland will require more efficient methods which will also drive up prices
The result will be the public pays more for food, not the agriculture industry makes any more or less money. It will require more imports which will come from countries with less regulation and more exploitable resources.
We've seen the story of disruptions to the food supply play out before. The reality is this is a more dangerous gamble than most people realize.
Food prices declined earlier this year for two consecutive months, though that will be a minor consolation after the significant food price inflation in 2022 and persisting, though at a slower pace, through 2023.
All of that to say, "let them eat cake" mentality is unlikely in a country where they have consistently ranked at the top of a world happiness index. Additionally, while I'm not well versed in Danish politics, I am under the impression that the Social Democrats have responded much better to the mass immigration that has been an ongoing issue for many parties throughout Europe. I think this is indicative of a party that adapts rather more quickly to the consequences of their previous policies and is less ideologically stubborn - at least on some issues.
Individuals, by contrast look at the cumulative effect of inflation. If inflation runs hot for several years and then comes back to a moderate level, prices don’t go down regardless of what economists would have you believe. The effect of inflation has memory.
Economists that make monetary policy decisions look at recent inflation trends + projected inflation because they are tasked with price stability, which requires them to often respond to shocks well outside their control (war in Ukraine, massive government spending, tax cuts, covid-19 pandemic, etc.)
I was trading and researching fixed income and inflation markets (and implementing in multi-billion dollar portfolios) years ago when you had inflationistas claiming the Fed was going to cause double digit runaway inflation. At the same time, you had people claiming the Fed was not doing enough to support markets.
No matter what monetary policy makers do, it will be pretty much universally mocked by pundits and especially anyone that wants to talk their own book.
Academic economists don't really focus much on any particular reading of inflation, unless perhaps they have their own axe to grind about how it is measured or responded to.
Monetary policy can't change the past, which is why they evaluate current and expected inflation, not what happened in two years ago. Just because prices increased dramatically in 2022 does not mean the Fed or any other central bank should aim for deflation.
it creates a national dependency on imported food from countries that do not bankrupt their farmers, and suddenly (shocked!) the entire Danish food supply crosses the borders to arrive and is then subject to federal management. this latter case is of course the purpose, and climate change is merely a pretext. I hope european farmers are able to organize a revolt.
Governance is needed, where progress does not occur naturally.
reality is, governments want smallholding farmers out of the business and to replace them with agribusinesses because it's a process of de-kulakizing their subjects. it has nothing to do with science or environment at all. I think maybe a war over this stuff will give us the reset we need.
Similarly, the solar systems on most farms, was a government research project. The satellite recon to analyse the farm - provided by the government to all farmers, including the tiniest hobby farm, is 100% government researched, deployed, and maintained.
Governments do a lot more science than you are giving them credit for.
This is similar in some ways, but not at all the same.
The history of solar, EVs, batteries etc. show these work hand in hand.
Why invent a way to capture methane from slurry, or form a business to sell that idea to farmers if they're allowed to pollute for free?
if you have a problem with farmers, maybe you should just eat less?
Farms, at least in Europe, are in the majority family owned. Same for those working in them, mostly those that are part of the family [1].
It's difficult being a farmer. You are much more at the will of nature than any other industry. Your effort takes a long time to bear fruit (think olives, for example, you do not have fruit for 4~years if you're lucky, and you don't want the oil from a younger tree (lesser phenols, etc...). You have to wait YEARS before you get anything to market. And, there have been many fires in southern Europe...).
All in all, it's indeed difficult to invest in machinery, new technology, etc...
[1] https://ec.europa.eu/eurostat/web/products-eurostat-news/w/d...
Denmark has no ability to impact global CO2 emissions at all. In fact nobody does except ironically the Chinese and their industrial-growth-at-any-cost coal based approach from the 90s and 00s.
Farming is very carbon emission intensive if the farmland is reclaimed wetland. Converting the farmland to forest and stopping draining (making it more wet again) can definitely reduce carbon emissions significantly.
> Denmark has no ability to impact global CO2 emissions
This is such a tiresome and logically hollow argument. Denmark has the ability to reduce a fraction of the worlds emissions. The size of the fraction is proportional to the size of their emissions. Every country has a responsibility to reduce it's per capita emissions to sustainable levels. China has lower per capita emissions than most richer countries.
Let’s split China population in k Denmark-sized groups, plus one smaller-than-Denmark reminder.
None of the k groups has any ability to impact global CO2 emissions (same as Denmark).
We can reasonably assume that a smaller group has even less ability to impact global CO2 emissions than a bigger group. Hence the smaller-than-Denmark reminder has no ability to impact global CO2 emissions either.
Thus China is made of groups that have no ability to impact global CO2 emissions either. And therefore China as a whole has no ability to impact global CO2 emissions. (Otherwise at least one group within China would have to impact global emissions and we just saw that it isn’t possible).
This is known as the CO2 impossibility theorem, loosely based on Arrow’s concept of “(in)decisive” set.
We certainly need international coordination or actors with a minimal set of morals to achieve it.
I'm afraid most people are smaller-than-Denmark groups, and thus unable whatsoever to impact global emissions. It's just math.
That's what your math sounds like to me.
f = lambda x: (1/x) * x
f(1e309)
(So I guess Denmark is at least 1e309-sized in some metric).
The starting point is just wrong that Denmark can't play a role when it comes to climate change. Denmark can make a change. It is like saying that when voting that no individual vote or county matters, when the opposite is true: every vote matters in the same way.
Every kg CO2 saved is good... (obviously we should strive for the most economic way to save CO2).
The reason Denmark can't do anything isn't because there are few of them, it is because Denmark isn't a significant industrial cluster for energy technology and innovation. For example, India has more people than China and they aren't in a position to do much unless there is some sort of tech breakthrough that hasn't made it to my notice.
A lot of those vegetables are produced yet in Almeria. A lot of milk that goes to Italy is produced in France. EU has this issue checked from the first minute and created a supranational agriculture system based on quotes.
One can even argue that the reduction in environmental and climate impact will create room for other industries that already are carbon-taxed.
2. All produce is not of same quality, 15 million people’s produce will probably only produce 11-12 million produce that is marketable in stores after transporting it
3. Economies of scale matters, going from 15 million people’s produce to a 10 or 8 million produce doesnt just means a linear cost reduction, the price per unit for crops also rises, which can potentially make it hard to compete with other agro hubs in the Eurozone, dwindling Denmark’s independent source of food supply over time.
Edit: Genuinely curious what I'm missing..
High carbon farms balance would be: "high carbon" profit + subsidy - high carbon tax
If ["low carbon" profit - small carbon tax] > ["high carbon" profit - high carbon tax] (e.g. if the carbon tax is high enough), farms have an incentive to lower their carbon emissions.
The subsidy is here to make sure ["low carbon" profit + subsidy - small carbon tax] > 0
This gives an economic incentive to use the lower carbon method, funded by those who use more carbon, while not changing the end price or output.
There will be no food subsidy, however, and a rough estimate of the increase of food cost is something like 1.5%, with beef having the highest increase. Take this estimate with a grain of salt though, as it's difficult to estimate. An increase in food cost is expected though.
Of if there is an equivalent subsidy (i.e. the tax is basically redistributed) it would encourage to produce less carbon/methane intensive production
> Governments pay to keep food cheap > A carbon tax will either drive up prices or [drive up prices]
So, this is just number rearranging. The public pays either way. Ok. The comment you replied to says
> Currently the public subsidizes the agriculture industry by paying for the consequences of the industry's carbon emissions.
So the public pays in this case too. More number rearranging. Not at all clear why this makes prices increase.
So why do you think this implies prices increase? Do you think the price of carbon determined by the government is too high? Or do you just want to ignore this externality until we pay it all at once?
Either the subsidies take into account the carbon tax or they don't. If they do then it's number rearranging. Government gives dollars and then immediately takes some of them back, it's a convoluted appropriations bill. If they don't then food prices go up which is contrary to the government's goal of keeping food cheap at the point of sale.
If you want to reward reducing carbon emissions by giving additional dollars or paying for more expensive but better for the environment equipment then that could potentially be effective.
I’m personally of the opinion we should be doing far more tying together of revenue neutral taxes and subsidies within an industry. When you want to reduce a negative externality you tax that and then redistribute the proceeds equitably back across relevant actors. When you want to increase a positive externality, you equally tax actors and then distribute it asymmetrically according to the behavior you want to encourage. Or combine the two approaches to address both negative and positive externalities in one go.
These approaches allow you to be more targeted, while minimizing overall market distortions.
Whether this plays out as intended remains to be seen. I think externalities need to be priced in somehow, the issue is determining the appropriate cost. If you want the market to decide the cost efficiently there needs to be some mechanism to tie the two measures together (increased environmental quality => lower carbon tax rate). I agree however that manipulating the economics of food production is dangerous and needs to be done slowly and carefully.
"The public" isn't one person. Denmark has progressive taxes; getting rid of subsidies so prices of food increases changes who among the public pays.
> Or do you just want to ignore this externality until we pay it all at once?
> So, this is just number rearranging. The public pays either way.
"The public" isn't one person. Denmark has progressive taxes; getting rid of subsidies so prices of food increases changes who among the public pays.
> Or do you just want to ignore this externality until we pay it all at once?
I'm in favor of the carbon tax. I also think that it has complicated side effects and we should try to understand those effects, and see if we need to change something else to compensate for them.
The industry isn't "choosing carbon" but rather it's responding to the immense challenge of feeding billions affordably while dealing with slim margins and unpredictable conditions. Adjustments require viable, scalable alternatives, not just finger-wagging.
I think we focus on supporting innovation rather than vilifying an essential industry.
If the externalities of that carbon generation are priced in I end up paying more for the polluting tractor so I choose the less polluting tractor and make more money.
I can only speak to small and medium farms, but if we're talking large horsepower cultivators / row farming, It's really a choice between keep my old pre-emissions diesel/buy a pre-2006 used tractor from auctions/marketplace for 50k, or double down and lease a 250k-400k new mid-size tractor.
You make it seem like many farmers have choices, but old "dirty" tractors are the only financial options for many without signing up for indentured servitude to JD/Case/etc
Otherwise, you’re right. We’re upsetting the balance of a very complex, very important system and causing a regressive tax in the form of price increases.
I think inevitably, there will be price increases. The questions is just how bad and how many farms survive the transition.
But I'm doubtful that implementing them only for one industry in one small country is very helpful.
That is of course impossible, so there is some tension there :)
Will it or will farmland value take a dump but remain unchanged in use?
I always thought of farmland these days as a use of last resort and if it could be marketable for buildings, it’s already not economically worth it as a farm except speculatively
The value in the land isn’t in its use (which is getting 1% ROI), but in speculation it may be granted permission to be converted to housing, or because of tax loopholes.
Land at the edge of cities and towns where there is a reasonable chance of development happening costs orders of magnitude more than the average.
The person renting that land then farms it (presumably for a profit) for additional ROI.
Many farmers will receive a one-time payment on land sales and some will use this windfall to subsidise their transition from growing livestock to more environmentally-friendly food.
This assumes that the land is equally usable for both activities. Many times, it isn't: a lot of land that's good enough for grazing cows doesn't have enough water available for growing plants that people want to (or can) eat. People can't eat grass.
This probably isn't an issue in Denmark, but in many other places it is.
Just because plastic bags are ubiquitous doesn't mean it's the only nor best way to carry items around, nor that we'd lose the ability to transport goods if they were phased out, nor that they don't come at a cost despite perceiving them as free.
Crop soil needs fertilizer somehow
What is your alternative to manure?
Bonus points if it uses less energy to produce than animals, produces less CO2 than animals, takes up less space than animals, or also produces food at the same time
Cows are so inefficient that we don't need to use marginal land at all to grow food. The majority of arable land is already used for cows yet they produce a disproportionately small amount of food. Weening off cows is a good thing.
It's never that easy as "Meat is great".
Spending two minutes reading about the biogenic carbon cycle destroys this misconception.
"As a by-product of consuming cellulose, cattle belch out methane, there-by returning that carbon sequestered by plants back into the atmosphere. After about ten years, that methane is broken down and converted back to CO2. Once converted to CO2, plants can again perform photosynthesis and fix that carbon back into cellulose. From here, cattle can eat the plants and the cycle begins once again. In essence, the methane belched from cattle is not adding new carbon to the atmosphere. Rather it is part of the natural cycling of carbon through the biogenic carbon cycle."
According to that logic, burning fossil fuels also is not harmful for the environment, because the CO2 eventually gets consumed by plants.
1) Even if cows would only eat the grass that was there (and we would not have converted any forest or other vegetation into grazing lands), the methane and CO2 stays in the atmosphere for a long time before being used by plants again, contributing to the greenhouse effect in that time. The reality is, we can only cover a very small percentage of the demand with this "3 happy cows on a vast pasture" phantasy. Most cow feed is planted additionally, often in countries like Brazil, and then fed to the cows.
2) The carbon impact is not the only negative impact of the scale of livestock agriculture we run these days. As it says in the article, another big impact is eutrophication of water bodies.
3) Just basic physics: Livestock agriculture, especially beef, is a very inefficient way of producing protein and calories. Have a look at this data: https://ourworldindata.org/grapher/ghg-per-protein-poore
So, please don't come at me with your cute comments. The reality is that we have too much livestock agriculture. It's not sustainable to feed 8 billion people like this. The scientific consesus is clear on this.
Unrelated but since you brought the topic up, it would of course make sense that releasing vast amounts of CO2 into the atmosphere that took millions of years to bind into the earth in mere decades might be a bad idea. Then again, we're only guessing there as well. We have no clue if the world will be better or worse for us to live in 50 years, and how much of it will be attributable to CO2.
But I digress -- this comment thread was about cow farts and the utter silliness of grasping at such straws when speaking about an otherwise serious subject like the futures of our children.
Umm, no, we are not guessing. But I see where this will end, so let's stop this discussion right here.
No, the difference in logic is based on the source of the CO2. Fossile fuels are burried in the ground and are not part of the carbon cycle. By removing them from the ground, we are adding new carbon to the carbon cycle rather. Coversely, if you burn wood, that carbon was (mostly) going to end back up in the carbon cycle and you've just sped up it's cycle and increased the portion of the cycling carbon that is in the atmosphere.
There are changes we can make to the cycle that do affect global warming (cutting down all the forests and killing all the kelp would greatly decrease the capacity of the cycle). Conversely, we can expand the carbon cycle by planting trees (that actually survive and form forests.)
However, you can't fix global warming by expanding the carbon cycle because you can't scale the natural cycle to match all the new carbon that is being added to it by buring fossile fuels. There are only two solutions, adding less carbon to the cycle by burning fewer fossile fuels and finding ways to remove carbon from the cycle by sequeresting it in long term ways.
Carbon taxes can fail to actually cause change if they allow fossil fuel burning to be offset by temporary bumps to the carbons cycle capacity because this doesn't really solve the problem and at best slightly delay it.
Cow "farts" (actually burps) are kinda the opposite, the methane is already part of the carbon cycle. However methane is a way more potent greenhouse gas than CO2 so by increasing amount of carbon cycle that is amospheric methane you are accelerating global warming until the methane decays into CO2.
https://openknowledge.fao.org/server/api/core/bitstreams/492...
"Total GHG emissions from livestock supply chains are estimated at 7.1 gigatonnes CO2 -eq per annum for the 2005 reference period. They repre- sent 14.5 percent of all human-induced emissions using the most recent IPCC estimates for total an- thropogenic emissions (49 gigatonnes CO 2 -eq for the year 2004; IPCC, 2007)"
Surprisingly there are fewer cows than people, but there's still a billion cows, and a billion of anything adds up quickly.
That's not to say that the other things aren't important as well. Gas flaring from refineries is a pure waste that should be drastically curtailed.