Worried About High Energy Bills and Green Taxes? Danes Are Not
Worried About High Energy Bills and Green Taxes? Danes Are Not
(Bloomberg) -- While many European governments are afraid of green taxes after the “Yellow Vest” protests shook up France’s government, Denmark is not.
The Danish government is confident that most of the country’s population will be actually happy about new policies to push along the transition to a less-polluting economy -- even if it means a new burden for citizens who already pay some of the highest taxes and energy bills in Europe.
“Most Danes agree that the green transition that we have already done so far hasn’t made people poorer, hasn’t hurt our development or our economic growth. It has done the opposite,” Dan Joergensen, Denmark’s minister of climate, energy and utilities, said in an interview in Copenhagen. “In the long run, it will be a good deal for our population.”
Mette Frederiksen, Denmark’s youngest prime minister, formed her government in June based on higher taxes and one of the most ambitious climate policies in the world. The new government wants to reduce greenhouse gas emissions by 70% by 2030 from 1990 levels, a target which critics have described as overambitious.
The European Union currently has a much looser target, mandating a reduction of 40% by 2030. And finding a compromise to reach that goal has been harder than policy makers anticipated, sparking protests against the cost of green rules.
Denmark’s government believes its population is not so likely to follow the example of Yellow Vests demonstrators in France.
Danish citizens put the climate at the top of the political agenda and lead the EU in levels of concern on the issue, according to a survey conducted for the European Parliament in June. The poll done after parliament elections showed 70% of Danes saying protecting the environment was their key driver to vote.
Joergensen says Denmark’s policies will avoid the contoversy that happened in France.
“We don’t want to make reforms in which the financial burden has to be carried by the poorest part of the society,” he said.
By Christmas
Denmark is now working to turn the target into a new law named Climate Act, which Joergensen must get approved by Christmas. Changes will impact mainly the energy, transportation and agriculture industries.
“This is a huge challenge. We have already done a lot in Denmark, but this would mean we need to fundamentally change our entire society,” he said.
The nation is home to the world’s biggest maker of wind turbines, Vestas Wind Systems A/S, and also the largest operator of offshore wind farms, Orsted A/S. On Sunday, for the first time ever, renewables in Denmark generated more electricity than the country could consume.
Joergensen sees more room to increase the share of wind power feeding into the grid. The government wants to create a “green island” -- a 40 billion-euro project in the middle of the ocean combining wind plants with power-to-fuel facilities. The objective is converting wind electricity into clean fuels, such as hydrogen through electrolysis -- a zero-emission but still expensive process.
“We want to be part of an integrated European energy system where we can deliver to renewable energy for other countries,” Joergensen said.
The country seeks to double the goal for state spending on research into renewable sources of energy by 2022. Much of the focus will be on studies exploring ways to reduce the carbon footprint in the transport and agriculture sectors.
The nation is considering tax changes and electric vehicle incentives to curb transport emissions. It targets to ban the registration of new diesel and petrol-fueled cars by 2030, also a challenging move, as it would be dependent on changing the European Union legislation.
Denmark also is studying compensation for farmers to turn part of their less profitable land into forests.
“We hope to get as many parties as possible to support this very ambitious target,” said Joergensen. “We are doing something extremely difficult, and exactly because has side effects, we will be able to create new technologies and have goods we can sell all over the planet. We will have a better, richer and cleaner society, not the opposite. And the Danish population want us to do it.”
--With assistance from Morten Buttler and Nick Rigillo.
To contact the reporter on this story: Vanessa Dezem in Frankfurt at vdezem@bloomberg.net
To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Rob Verdonck
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