50 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 41 | 2023 source. In addition to being environmentally friendly, biogas can drastically lower GHG emissions. Danish pig farms have been shown to exhibit financial benefits through biogas production efforts and are environmentally beneficial through CO2 reduction techniques. Biogas production can be profitable thanks to subsidies under renewable energy schemes, with achievable payoffs based on farm size and biogas infrastructure investments made per farmer. Decentralized biogas production can reduce GHG emissions and create jobs across different sectors, including installation engineers, farmers and farm workers, input suppliers, and technology partners (Jacobsen et al., 2014). This makes biogas generation a more impactful solution than larger-scale industrial projects. Denmark’s pig farming sector has opened doors toward a more sustainable approach within GHG emission reduction targets set nationally while offering economic gains via innovative solutions developed here. Carbon taxation One of the most effective, yet controversial, measures to reduce GHG emissions in Denmark is a form of tax known as carbon taxation. Carbon taxation is based on the idea that those who create carbon pollution must pay for the damage that it causes. This taxation incentivizes households and businesses to reduce their GHG emissions to avoid having to pay the tax. The current landscape of carbon taxation in Denmark entails the green CO2 tax act of 1992, which ensures that emissions from energy generation, the combustion of waste, and the usage of coal, gas, and oil are taxed. The tax is 167kr (approximately $24) per ton of CO2 released as of 2021. Industries that make up 35% of the total Danish GHG emissions, including those involved in energy production and transportation, are subject to the levy (Ghazouani et al., 2020). Although Danish farmers who use fossil fuel–powered farming equipment must pay the carbon tax, there are no explicit policies imposed on the agricultural sector, which accounts for 20% of the total GHG emissions in Denmark. To reach carbon neutrality in the Danish agricultural sector, it is critical to have a carbon tax policy in place for agricultural emissions (Batini et al., 2020). By introducing an agriculture-specific carbon tariff, the Danish agricultural sector can benefit from the reduction of emissions and adoption of more sustainable practices. Although the current carbon tax on fossil fuels does not specifically target the agricultural industry, it does have an impact on farmers whose equipment is heavily reliant on fossil fuels. Farmers therefore have a financial incentive to invest in renewable energy sources or implement low-emission farming practices to avoid paying the costs related to the usage of fossil fuels. To further incentivize farmers, the government can provide them with tax rebates if they adopt sustainable practices. For example, farmers who use renewable energy sources can receive a tax rebate for their investment. The tax rebate for investment in renewable energy sources can be a percentage of the total investment, such as a 30% tax rebate for investments in solar panels. Similarly, the Danish government can also create a carbon credit market where farmers and agricultural businesses can earn credits for reducing their emissions. These credits can then be sold to other businesses that need to offset their emissions. For example, a farmer who adopts low-emission farming practices can earn carbon credits and sell them to a company that needs to offset their emissions (Batini et al., 2020). These measures can ensure that in the long run, emissions from fossil fuels are heavily reduced from the agricultural sector. Furthermore, carbon taxation in the Danish agricultural sector can encourage the new technologies that can reduce GHG emissions. Such new technologies require significant investments in research and development. Carbon taxation can provide the necessary financial incentives to encourage farmers and agricultural businesses to invest in these technologies, leading to a more sustainable and environmentally friendly agricultural industry. For instance, research can be conducted to improve the efficiency of livestock production, such as reducing methane emissions from cattle through changes in feed or breeding practices. Also, precision agriculture technologies can be improved to optimize the use of fertilizers and reduce nitrous oxide emissions. These new technologies could not only reduce GHG emissions but also improve the efficiency and productivity of the agricultural sector. Ultimately, by promoting the adoption of new technologies, paid for through increased carbon taxation, the Danish agricultural sector can reduce its carbon footprint, improve its efficiency, and maintain a competitive edge in the global market. The introduction of carbon taxation in Danish agriculture can have several drawbacks. It can put farmers at a disadvantage compared to producers in countries with no or lower carbon taxes, particularly affecting small farmers who may struggle to pass on increased costs to consumers or invest in emissions reduction technologies. This may lead to a decline in competitiveness and market share, especially in the export market. Additionally, implementing a carbon tax on agriculture is challenging due to the diffi-
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