Denmark leading charge against climate change, to cut CO2 by 40% Special

Posted Oct 6, 2011 by Bradley Axmith
Denmark’s new government has committed itself to the industrial world’s most ambitious energy reform strategy to reduce reliance on fossil fuels and drastically cut its emissions of greenhouse gases that contribute to climate change.
A wind farm off Copenhagen s coast
A wind farm off Copenhagen's coast
Mads Eskesen
According to the government's policy book, 'A Denmark That Stands Together,' the small Scandinavian nation of 5.6 million will reduce by 40% its greenhouse gas emissions by 2020 compared to 1990 levels by investing heavily in windmills and reforming transport.
The new Minister for Climate and Energy, Martin Lidegaard, declared his desire to pass legislation before year’s end setting the agenda and establishing the long-term parameters for public and private investment to fuel a new industrial green revolution.
“My first job and foremost priority the first 100 days is give Danes a Christmas present this year by getting passed [into law] a broadly agreed upon, long-term energy bill that will take the first step toward achieving our standing commitments,” Lidegaard proclaimed.
European Commissioner for Climate Action, Connie Hedegaard, applauded her homeland’s initiative, which adds a 10% reduction on top European targets set earlier in the year.
“It can only happen if there is a full fundamental transition,” said Hedegaard, whose tenure as Climate Minister in Denmark under the outgoing government failed to achieve its Kyoto targets.
In need of a framework
In order to fulfill the government’s plan, Prime Minister Helle Thorning-Schmidt will need to convince all Danes to incur short-term costs as well business leaders to integrate green solutions into their operations, investing millions with the expectation of seeing some payoff.
Having a clear plan and getting the EU and the UN to follow Denmark’s lead is decisive for the strategy to work, Tine Roed, the director of the Confederation of Danish Industry said.
According to DI research, one fourth of Danish export earnings to the US is generated by green technologies, a market that has tripled in the last 15 years.
Dong, a private energy company, is also anxious for a clear strategy with the right fundamentals put in place.
“If the will is there, it can be done,” Dong’s administrative director, Anders Eldrup told Information, a daily.
Business leaders and conservatives are typically skeptical of the green revolution, noting how the financial downturn and the ongoing relocation of jobs to China presents an inopportune moment to exacerbate an economy’s competitive advantage by punishing the literal engines of industry.
But Denmark might be special in that it does not have very many energy intensive industries, and what sectors of the economy stand to feel the brunt of the government’s future disincentives may get relief in the form of tax write-offs in the first few years, according Tarjei Haaland, an energy specialist with Greenpeace.
“Having worked with some of the members of the new government while they were in opposition, I know they don’t want to punish companies dependent on the global market,” he said.
Mr. Haaland is optimistic that the energy companies in particular are eager for a clear framework so they can invest and plan accordingly.
Furthermore it is possible. “It involves upgrading to a smart grid, including hydroelectricity from Sweden, wave power from Norway, charging cars at night and using heat pumps to transform renewable electricity into heat, which can be more easily stored.
“What’s the alternative?” he ventured. “Upfront investment by energy companies will be less than the cost of fossil fuels in the future.”
The long war
Security of supply is an important component of Minister Lidegaard’s drive to include the energy companies in Denmark’s strategy to phase out coal by 2030 and growing domestic renewables to provide 100% of supply by 2050.
“Climate and energy is an area where ad hoc solutions are untenable. It’s fatal for the private sector when one changes policies every four years,” Lidegaard explained when he assumed the post Monday.
A comprehensive energy strategy is first on the legislative agenda. A round of negotiations with all parties in the parliament will take place based on a government proposal to be published in the next few months. That will result in legislation both palatable to the opposition and private industry, Jesper Zølck Felbo, press secretary for Mr. Lidegaard explained.
Passing a climate law is not planned until sometime in 2012 and will not be on the legislative agenda until after the United Nations Convention on Climate Change to be held in Durban, South Africa in January.
Prior to his appointment, Mr. Lidegaard led the green think tank, Concito, studying sustainable strategies and lobbying industries and public administrations to change policies accordingly, making him a heavyweight on policies but less proven in the political arena.
The opposition Liberals, Denmark’s biggest party by mandates, have already signaled their intent to challenge his political savvy, threatening to hinder the nascent government’s plan at every step.
The prime minister and Mr. Lidegaard will have to convince parliament of the fruits of financing the green revolution without hamstringing the country’s competitiveness and productivity.
According to estimates from Concito, 40 billion kroner ($8 billion US) in investment will be needed to produce 50% of electricity generation from wind power by 2020. That envisions production-sharing agreements like the wind farm project between Anholt island and Djursland penninsula, in the Kattegat sea, able to power 400,000.
Dong, who got the rights to operate the massive 400MV project, could not attract enough investment to build the park until a pension fund jumped on board.
Given the investment climate today, investing green for a better climate tomorrow does not seem so half-baked.