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FRAM-seminar: The effects of risk based pesticide taxation in Denmark

Research profile seminar

FRAM seminar March 4, 2019, 12.00-13.00. Anders Branth Pedersen, Aarhus university, Title: The effects of risk based pesticide taxation in Denmark. Venue: School of Business. Economics and law, Vasagatan 1, Gothenburg.

In 2013, Denmark's comparatively high, but not very effective tax on pesticides was overhauled and reintroduced with a new design. In line with environmental tax theory, the redesigned tax targeted the harmful effects of the products, differentiating the tax rate on pesticides according to their score on an environmental and health load index. The objective was to incentivize farmers to substitute less harmful products for more harmful ones. Additionally, the average tax rate was increased by 125 pct. (Hansen 2017) in order to encourage a general reduction in pesticide usage.

We examine how Danish farmers have responded to the redesigned tax. Due to a regulatory requirement that farmers register detailed information on pesticide use in an electronic journal, it is possible to track pesticide use before and after introduction of the tax , including changes in crops. But in addition to ascertaining the general level of response to the tax, it is important to understand underlying patterns in farmer responses that may contribute to explaining why the tax did or did not work and whether it works well enough. We therefore combine the general evaluation of the tax effect with survey data of 600 farmers to examine whether farmer responses to the tax differ across different types of farmers. Studies of the previous tax, which was a simple value tax, suggested that its failure to achieve policy objectives was due partly to unrealistic assumptions about farmer responses to the economic incentives of the tax (Pedersen et. al 2012).

This survey-based study found that only half of the farmers paid much attention to prices in their decisions on pesticide use (Pedersen et al. 2012). Many farmers were more motivated by producing a large crop, with significantly less consideration of costs. However, since the new tax offers stronger and differentiated price incentives, and since Danish farmers are under greater financial pressure now, more farmers might respond to the economic incentives of the new tax. The survey, collected in the winter of 2016-2017, asked farmers questions about decision-making in relation to pesticides as well their knowledge about and attitude towards the redesigned tax.

Lecturer: Anders Branth Pedersen, Department of Environmental Science, Aarhus University Anders Branth Pedersen has a MSc and a PhD in political science. He is now a Senior Researcher in environmental policy analysis. His research is primarily centered on environmental policy analyses and environmental governance. E.g. through analyses of the effectiveness of environmental policies and policy instruments, analyses of implementation barriers and analyses of multi-level environmental governance. He is an experienced PI - e.g. through several projects for the Danish EPA. He has also a broad network of research and professional contacts nationally and internationally which primarily builds upon participation in >30 national and international (primarily EU) research and advisory projects.

Date: 3/4/2019

Time: 12:00 PM - 1:00 PM

Categories: Sustainable development

Location: School of Business. Economics and law, Vasagatan 1, Room F45, Gothenburg.

Contact person: Daniel Slunge

Page Manager: Kasper Holgers|Last update: 9/11/2018
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