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A carbon tax for agriculture?

Denmark prepares to implement groundbreaking law

July 3, 2024


One of the most eye-catching selling points of Controlled Environment Agriculture (CEA) is the fact that it is far more sustainable than traditional soil agriculture. It uses 90% less water, less fertilizer, and can allow pesticide-free food to be grown closer to the point of sale, reducing emissions from transportation.

These are crucial differences that not only create a feel-good sense of satisfaction for growers, but play an important role in preparing food systems to meet the realities of climate change as we feed a hungry planet. But what good is it to grow more sustainably if it’s still more economical to grow produce using less planet-friendly methods?

The tragedy of the carbon commons

Feeding growing populations while stewarding the planet effectively is a massive challenge with many moving parts. Food production is crucial and can be enormously profitable. But the potential profits have driven a trend toward monopolization that makes it harder for smaller growers to compete. A pure focus on the bottom line can discourage investment in food production methods like community-based farming and CEA that are ultimately better for the planet.

Maintaining a balance between responsibility and abundance requires complex negotiations and interventions from communities alongside both the public and private sector. People often speak of the differences between a “carrot” and a “stick” approach. There have been all sorts of “carrots” handed out to traditional food producers, from farmers to ranchers, in the forms of grants and subsidies.  But as scientists warn of impending climate catastrophes, there is more and more agreement that reducing carbon emissions will require more “sticks.” Thankfully, even big producers are accepting the need for regulation in order to preserve their businesses and the planet – as we see in Denmark.

Denmark tries a new approach

A lot of critical climate-related focus is reasonably on livestock. The massive amounts of methane coming from large herds is a significant source of carbon emissions.

That’s what the Danish government is tackling – becoming the first country in Europe to introduce a carbon tax on agriculture, as Politico reports.

Denmark is also committing to reforest vast swaths of land currently used for agriculture, and even to buy out farms in order to cut back on emissions. It’s a significant step in the fight to limit the rise of global temperatures to unlivable levels. And it should be no surprise that it’s taking place in the same country that in 2020 saw the opening of some of the largest vertical farms in Europe.

What does this mean for CEA farmers?

This legislation may not have a direct impact on growing CEA produce, but it is the latest example of a society that is choosing to dis-incentivize the most ecologically harmful food growing practices in order to incentivize sustainability.

Denmark is focused on reducing livestock emissions, but traditional produce production is not without its excesses either. Some agricultural communities, like super producer California, have dealt with drought scares in recent decades which were compounded by the intense water demands of cash crops like almonds. Elsewhere, like in the Gulf of Mexico, we see excess fertilizer runoff creating a “dead zone.” We need to curb overconsumption and pollution that can occur with traditional agriculture, and CEA can continue to play a key role in offering an alternative.

Consumer awareness continues to drive interest in sustainably-grown food, but awareness is not always enough. We at AmHydro, our customers, and many other growers in the industry are focused on growing in a way that is both ecologically and economically sustainable. We know we can’t sit around waiting for governments to hand a blank check to the CEA sector, however, we want to be clear that we welcome interventions that would encourage more people to grow clean food for their communities.

CEA doesn’t need to entirely replace soil-based agriculture – just as Denmark is not attempting to eradicate livestock production. But it’s important to use all the social tools at our disposal to ensure that the future of food is sustainable.

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