The Danish Climate Policy Plan Towards a low carbon society

The Danish Climate Policy Plan Towards a low carbon society
kebmin.dk
The Danish
Climate Policy Plan
Towards a low
carbon society
August 2013
The Danish Government
The Danish
Climate Policy Plan
Towards a low
carbon society
4
The Danish Climate Policy Plan
The Danish Climate Policy Plan
5
TA B L E O F C O N T E N T S
Foreword ............................................................................................................................................................................................................................................................................................................ 7
1. Denmark’s long-term climate challenge ................................................................................................................................................................ 13
2. Changes in Danish emissions – an overview ................................................................................................................................................... 19
3. Status in relation to the 40% target for 2020 ..................................................................................................................................................... 25
4. Strong Danish efforts for an ambitious European climate policy ................................................................... 31
5. Foundation for an ambitious national climate policy ............................................................................................................... 35
6. Reduction potentials and costs in Denmark ................................................................................................................................................... 49
7. Principles of Danish climate policy ..................................................................................................................................................................................... 55
8. The next steps .......................................................................................................................................................................................................................................................................... 61
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The Danish Climate Policy Plan
The Danish Climate Policy Plan
7
Fo re w o rd
Anthropogenic climate change is real, it is happening and
must be taken seriously. The political rhetoric has to be followed up by real action if we are to reverse the current trend
of increasing global greenhouse gas emissions. The Danish
government wants Denmark to contribute actively to
meeting the calls from scientists that significant reductions
in greenhouse gas emissions are necessary. We also want
Denmark to be the showcase to the rest of the world that the
green transition can be reconciled with economic growth.
Science recommends that developed countries reduce
their total greenhouse gas emissions by 80%-95% by 2050
compared with 1990, as part of an overall 50% reduction in
global greenhouse gas emissions. The EU has adopted this
target. And Denmark must make its contribution to reach
this target. This means that we will have to significantly
reorganise our economy.
Progress in global efforts to combat climate change has
so far been far too modest. Setting a good example shall
be Denmark´s way to encourage the rest of the world to
join global efforts to combat climate change. Denmark is a
wealthy country and therefore can afford to take the lead.
The effort needed is ambitious. Hence, it has to be carried
out in a way that it does not pose unreasonable burdens on
Danish citizens and businesses in case international efforts
remain timid. Furthermore, the rate of transition must be
tailored so that it does not become too costly.
The Danish government’s strategy to put Denmark on
track for the 2050 target includes an interim target of a 40%
reduction by 2020 in all Danish greenhouse gas emissions.
Opting for this target means that Denmark will live up to
the scientist recommendations for wealthy countries with
high emissions of greenhouse gases and that the transition necessary will be initiated in all relevant sectors. The
Climate Policy Plan calls for a broad dialogue with all relevant players on future action. In addition to starting this
dialogue, the Danish government will present a Climate
Change Act in the forthcoming parliamentary year. This
Climate Change Act will establish a framework for the work
on the green transition and it will secure progress in reduction efforts so that Denmark can meet the emission reduction targets.
There are two basic elements to the Danish government’s
strategy: national efforts and European efforts. An ambitious Danish climate policy is highly dependent on developments in the EU, and therefore the Danish government will
work actively for more ambitious climate policies at European level. It is crucial that the EU takes the lead in international climate negotiations and thereby puts pressure on
other countries to set ambitious emission reduction targets.
At the same time almost half of Danish emissions are covered by the EU’s common emissions trading system. In this
context the price of allowances is a vital incentive for reduction initiatives in the enterprises affected. Common EU
policies could also make important contributions to reducing emissions from cars, industrial gases and agriculture.
In addition, more intense climate efforts in the other EU
countries could entail more uniform conditions for Danish
and other European businesses.
The energy sector is crucial to realising climate targets. The
Danish government’s ambitious energy policy is a good
foundation for climate policy. The broad energy agreement
in spring 2012 is a significant step forward to meeting both
the energy policy goals and the target to reduce greenhouse
gas emissions by 40% by 2020. In the future too, energy
policy will provide a vital contribution to climate policy. The
Danish government’s goal is that already by 2035 Danish
electricity and heating supply will be completely based on
renewable energy. The goal for 2050 is that all energy consumption, including the transport sector, will be based on
renewables.
However, an ambitious energy policy cannot stand on its
own. There is a need for an active climate policy that secures greenhouse gas emission reductions in all relevant
areas. In addition to the energy sector, this is primarily
within the transport, agriculture, waste and environment
sectors. There are reduction potentials in all of these sectors
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to reduce greenhouse gas emissions considerably. In a number of areas there can be socio-economic benefits in reducing emissions, as other positive environmental side-effects
will often come into play.
The Danish government will be following a sensible, pragmatic climate policy. This means that climate change issues
will be integrated into other sector policies. In so doing, climate change will be a natural part of transport policy, agricultural policy etc. Policy integration and synergy effects
will be crucial to meet both the 2020 target, and the longterm green and structural transition towards 2050.
Climate mitigation efforts must be designed cost efficiently so that they do not entail unnecessary costs for society.
However, when choosing between different reduction options other factors must be taken into account: The distribution of the burden between sectors of society, the need for
economic growth, competitiveness, employment and environmental side-effects. Furthermore, it is also important
that the initiatives launched before 2020 support the longterm transition. Another vital factor is to draw up specific
proposals for financing the initiatives to realise the target
of a 40% greenhouse gas reduction. In this context, there
must be room for prudent changes to the tax system. Still,
the Danish government will not impose new general tax
increases on the business community.
The Danish Climate Policy Plan
The Danish government intends to demonstrate that
an ambitious climate policy can be reconciled with
economic growth and good framework conditions for
the business community. This is the only way that our
ambitious reduction commitment will inspire others.
It is also the reason that the Danish government will
not impose new general tax increases on the business
community.
The Climate Policy Plan is not a cure-all-now solution for
how reduction efforts are to be organised or what specific
measures are to be initiated and when. There is considerable uncertainty regarding the size of the shortfall to the 40%
target, including the extent to which common EU measures
will contribute. Thus the scope of the additional national
efforts needed is so far unknown, and specific measures are
best decided for in on-going dialogue with both the business community and players in civil society. The Climate
Policy Plan can inform and inspire this dialogue.
In publishing this Climate Policy Plan, the Danish government engages in a dialogue with the business community
and the civil society on climate mitigation efforts. This dialogue also builds on a large number of useful contributions
already made by the business community and the civil society during the preparation of the Climate Policy Plan. With
this plan the Danish government intends to continue the
existing successful and broad collaboration on Danish climate policy.
Danish government, August 2013
The Danish Climate Policy Plan
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The Danish Climate Policy Plan
The Danish government’s Climate Policy Plan in brief
What is the target?
–– The Danish government’s target is to reduce total
Danish greenhouse gas emissions by 40% by 2020
compared with the 1990 level.
–– This is ambitious, but necessary in order to put
developments on track towards the long-term EU
target of a 80%-95% reduction by 2050 in line with
recommendations from climate scientists.
How useful is this target, given that
there is no international agreement
on global reduction efforts?
–– The ambitious Danish efforts will demonstrate to
other countries that it is possible to reduce emissions
significantly.
–– Furthermore Denmark will show that this can be
reconciled with continued growth and welfare.
Can Denmark achieve this target?
–– Projections indicate that without new initiatives
Denmark will emit about 4 mill tonnes more than the
40% reduction target in 2020. This is a lot, but it is not
insurmountable.
–– Calculations also show that developments in prices in
the European emission trading system, as well as economic growth, are decisive for Danish emissions. All else
being equal, a higher allowance price could significantly
reduce the shortfall.
–– There are reduction potentials in all sectors, but current
estimates indicate that realising the 40% target in 2020
will not be without cost.
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The Danish Climate Policy Plan
How can we achieve the reduction
target most efficiently?
–– Some mitigation initiatives can be implemented with
subsequent economic benefits, while others can only be
implemented at considerable socio-economic costs.
–– Generally, the most socio-economically beneficial
reductions can be achieved with mitigation measures
that have synergy effects with other policy goals and
priorities. Therefore, it is generally most cost effective to
integrate climate change mitigation across other policy
areas.
–– The world is not static. Technologies, the economic
framework, and knowledge about mitigation opportunities are developing all the time. Consequently, constant
follow-up on efforts to reduce emissions and assessment
of the specific measures are crucial in reaching the 40%
target.
–– A well-functioning European emission trading system,
and consequential higher allowances prices, could contribute considerably to meeting the national target. And,
just as importantly, it could ensure reduces emissions in
the rest of Europe. Tightening the EU CO2 requirements
for cars and the reform of the EU Common Agricultural
Policy could also entail important reductions.
–– The Danish government’s climate policy therefore has
two strings; national and international.
What is the next step?
–– The Danish government will ensure that the necessary initiatives are taken in the future by integrating
climate change mitigation measures into different
sector policies.
–– For example, there will be follow up in agriculture,
amongst other things on the basis of recommendations from the Nature and Agriculture Commission,
which has carried out an extensive review of the
agricultural sector and proposed recommendations
on nature, environment and climate related policies in
the agricultural sector.
–– The Danish government will also present a Climate
Change Act at the next session of the Danish Parliament (the Folketing). The Act will form the framework
for the future climate policy.
–– In the EU the Danish government will strive for agreement on initiatives for structural improvements of the
European emission trading system and thus a better
and more effective climate policy at EU level. Similarly,
the Danish government will work for tighter EU CO2
requirements for cars and vans and for a greening of
the EU Common Agricultural Policy.
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The Danish Climate Policy Plan
The Danish Climate Policy Plan
1
D e n m a rk ’ s l o n g - te r m
climate challenge
Climate change is a global challenge to be taken seriously.
Science has said that global emissions of greenhouse gases
must peak as soon as possible, and by no later than 2020,
if temperatures are not to rise by more than two degrees
compared with pre-industrial levels. By 2050, emissions
from the developed countries must be reduced by 80%-95%
compared with 1990: a target the EU has adopted as part of
a joint global climate change mitigation efforts.
The 2050 target is ambitious and realising it will also
demand considerable efforts in Denmark. With its ambitious energy policy, Denmark has laid an important stepping
stone to securing this transition. With the highest greenhouse gas emissions of all sectors, the energy sector is pivotal for climate policy in both the short and long term. The
broad energy policy agreement in 2012 gave real impetus
to the transition towards a long-term sustainable and low
carbon energy sector. However, despite significant results
and goals for energy, there is a need for additional mitigation efforts in all sectors.
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The Danish Climate Policy Plan
The Danish government’s climate and energy policy goals
–– The overall climate target set in the Danish government platform is a total reduction in Danish greenhouse gas emissions of 40% by 2020, compared to the
1990 level.
–– The Danish government wants all sectors, including
non-ETS sectors, to contribute with concrete and
documented reductions up to 2020 and beyond.
–– The long-term benchmark is that Denmark is to
contribute to the EU target to reduce greenhouse gas
emissions by 80%-95% up to 2050, compared with
1990, as part of joint global mitigation efforts.
–– W
ithin the EU, Denmark has an obligation to reduce
non-ETS emissions in the period 2013-2020, increasing to a total reduction of 20% in 2020 compared with
2005.
–– All of Denmark’s energy supply, including transport
energy consumption, shall be based on renewable
energy by 2050.
–– As part of this, oil for heating purposes and coal are to
be phased out by 2030, and electricity and heating
supply is to be 100% covered by renewable energy by
2035.
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The Danish Climate Policy Plan
Having all of Denmark’s energy supply from renewables
by 2050 will result in fossil fuels being phased out. This also
implies that energy consumption by the entire transport
sector will be covered by renewable energy by 2050. Emissions from agriculture and other sectors must be reduced
gradually up to 2050, if Denmark is to be able to contribute
to the EU target of an 80%-95% greenhouse gas reduction
compared with 1990. If reductions are to approach the
upper level of this span, i.e. 95%, significant reductions in
agriculture and other sectors will be required.
Figur 1
70
CO2 emissions with the
Danish government´s
2035 target for renewables
60
Mill. Tonnes CO2 equivalents
50
40
Mill. Tonnes CO2 equivalents
Realising the Danish government’s energy policy goal of
full conversion of electricity and heating supply to renewable energy means that emissions from the energy sector will have to be further reduced up to 2035, see figure 3.
This requires new initiatives for the period after 2020. If this
energy policy goal is realised, total Danish greenhouse gas
emissions in 2035 will have been reduced by around 50%
compared with 1990. In this case transport and agriculture
will account for almost 70% of the remaining emissions in
2035, unless further policies are implemented to underpin
the structural reorganisation
of these sectors to lower the
40
emissions. Up to 2050, realisation of the goal of full conFigur 3
35
version from fossil fuels to renewable energy will remove
almost all emissions from
30 transport and energy.1 However,
reducing emissions with around 80%-95%, as stated in the
25
EU reduction target, will require further mitigation efforts,
including efforts in the 20
agricultural sector.
30
20
10
0
15
The Danish government’s target to reduce Danish greenhouse gas emissions by1040% by 2020 compared with 1990 is
ambitious, but not too ambitious.
1990
2000
2010
2020
2035
Transport
Oil and gas
Agriculture
Energy
2050
5
A 40% reduction in 20200is a natural stepping stone towards
1990
a long-term reduction in greenhouse gas emissions in
accordance with the EU’s 2050
target of Transport
80%-95%, see
Energy
figure 1.
2000
Agriculture
Environment
Emissions for 100% renewables
in transport and energy
Figur 8
80
60
Note: It is assumed that new policies will be implemented to reach the
Danish government’s 2035 goals for renewables.
50
70
Mill. Tonnes CO2 equivalents
40
Mill. Tonnes CO2 equivalents
Figur 2
Figure 1. Historical and projected Danish greenhouse gas
emissions without policy changes up to 2020 (Source: Danish
70 for Environment and Energy and the Danish Energy
Centre
Agency)
30
20
10
60
50
40
0
1. However, 1990
there may be
methane/nitrous
oxide
of biogas and, depending on how they1990
are accounted
also emissions
1992 for,1994
1996 from
1998
2000
2010
2020emissions from utilisation
2050
biofuels. So emissions from energy and transport will not entirely disappear by 2050.
Historical emissions
80% reduction
40% reduction target
90% reduction
Reduction pathway
Historical emissions
2000 2002
Projected emissio
40% target, includ
Mill. To
Mill. Tonne
16
10
0
1990
2000
2010
2020
2035
Transport
Oil and gas
Agriculture
Energy
2050
5
0
The Danish Climate Policy Plan
1990
Energy
Transport
2000
Agricultu
Environment
Emissions for 100% renewables
in transport and energy
Figur 8
Early efforts may promote development of new reduction
80
technologies and make these cheaper. This may help convince people in wealthy as well as poorer countries that the
climate can be saved without inhibiting economic growth.
70
Efforts should also be balanced so that they are not unnecessarily costly for people and businesses. Popular support
may wane, if it is not possible to reconcile the green transi60
tion with a healthy economy.
70
Figur 2
60
50
Mill. Tonnes CO2 equivalents
Mill. Tonnes CO2 equivalents
40
30
20
10
0
1990
2000
2010
2020
2050
Historical emissions
80% reduction
40% reduction target
90% reduction
Reduction pathway
Figur 4
Figure 2. Historical greenhouse gas emissions as well as future
targets (Source: Danish Centre for Environment and Energy
40
and the Danish Energy Agency)
35
Mill. Tonnes CO2 equivalents
Prompt and well organised mitigation efforts could turn
out30to be the cheapest in the long run. A large proportion
of future greenhouse gas emissions will be determined by
25
the technologies we choose today, because many technologies20often have long lifetimes. So, in order for climate policy
to be cost effective climate mitigation measures should be
15 into consideration, when infrastructure with a very
taken
long lifetime is to be replaced, updated or renovated. This
will10avoid unnecessary scrapping of capital stock. However,
it should also be taken into consideration that later efforts
5
may turn out to be cheaper, as technological developments
may0bring down prices in some areas.
1990
2000
Supply
Figur 5
2010
2020
Businesses
Finally, the Danish government’s 40% target is in line with
50
the EU ambition to take the lead in combating climate
change: Together with other ambitious Member States,
Denmark is showing that
40 an ambitious target in the short
term will lead towards the1990
long-term
up to1998
2050. 2000 200
1992 transition
1994 1996
However, as national efforts and EU efforts are inextricably
Historical emissions
Projected emi
entwined, the Danish government is working to stabilise
40% target, in
the EU emission trading system in the short term and to
tighten the EU’s 2020 climate target. Furthermore, the
Danish government considers it necessary to set subsequent and more ambitious post-2020 EU targets for energy
efficiency and renewable energy. This may in part pave the
way for a new international climate change agreement,
Figur
9 get the entire EU to contribute to ambitious mitiand in
part
gation efforts. The more ambitious EU countries, including
Denmark, cannot meet the 2050 target without concerted
action from the entire EU. It is a matter of fact that the rate of
climate change depends on the accumulated concentration
of greenhouse gases in the atmosphere. Emissions accumulate in the atmosphere year after year. Consequently, early
and permanent international mitigation efforts will have a
greater effect than later efforts.
se selvstændig fig
2035
Households
16
14
12
10
s CO2 equivalents
8
6
4
Figur
The Danish Climate Policy Plan
A world-class target
The Danish greenhouse gas reduction target for 2020 is
one of the most ambitious in the world. However, this
does not mean that Denmark stands alone. Other progressive countries are moving in the same direction
and have taken on national greenhouse gas reduction
targets that go beyond their international obligations.
Examples include:
–– Germany is aiming to reduce greenhouse gas emissions by 40% by 2020 compared with 1990 and at
the same time Germany is starting to phase out
nuclear power.
–– Norway is aiming to become greenhouse gas neutral by 2050 (partly by buying climate credits from
abroad). This target will be brought forward to 2030,
if there is an international agreement.
–– Sweden is aiming to reduce greenhouse gas emissions in the non-ETS sector by 40% by 2020 compared with 1990.
–– The UK is aiming to reduce greenhouse gas emissions by 34% by 2020 nationally, without buying
climate credits from abroad. In 2008 the UK adopted
a Climate Change Act under which national reduction targets in terms of carbon budgets are adopted.
Under the Climate Change Act the UK has adopted
a conditional target to reduce emissions by around
50% by 2027 on the condition that the EU adopts
common reduction targets post 2020.
However, the countries all have different points of
departure, requirements and strongholds, and they
have chosen different strategies to achieve their national climate and energy targets, making it difficult to
directly compare the targets. For example, Norway and
Sweden already have a high share of renewable energy
and for Sweden also nuclear power. Both countries are
also focusing on climate projects in developing countries and use of climate credits from high carbon uptake
in soil and forests. The UK and Germany are focusing on
converting their energy systems and on reducing national emissions. Finally, there are differences in the scale
of reductions countries have already achieved from
1990 onwards, as the countries had different reduction
targets under the Kyoto Protocol.
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18
The Danish Climate Policy Plan
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The Danish Climate Policy Plan
2.
Tr e n d s i n D a n i s h
emissions
– an overview
Danish emissions arise from use of fossil fuels by the energy
sector and the transport sector, emissions from agriculture, as well as the environment. The latter category in
this context includes emissions from industrial processes,
industrial gases, wastewater and waste. Figure 3 illustrates
how these sectors are expected to contribute to emissions
in 2020, including only agreed initiatives from the energy
agreement. The energy agreement will lead to a significant
fall in emissions in the energy sector and thus a fall in total
Danish emissions. In 2020 the energy sector is expected to
account for more than 40% of total emissions, while transport will account for almost 30% and agriculture almost
20% (see projections from the Danish Centre for Environment and Energy and the Danish Energy Agency). However,
with regard to both transport and agriculture, only moderate reductions are likely up to 2020, unless new policies are
implemented.
40
Figur 3
35
30
Mill. Tonnes CO2 equivalents
25
20
15
10
5
0
1990
Energy
2000
Transport
Agriculture
2010
Environment
2020
Oil and gas
Figure 3. Historical and projected Danish greenhouse gas emissions for 1990 to 2020 (Source: Danish Centre for Environment and
Energy and the Danish Energy Agency)
Note: In addition to emissions from the five sectors, there are about 0.5 mill. tonnes CO2 equivalents in 1990, falling to 0.3 mill. tonnes CO2 equivalents in 2020
arising from other sources than transport, agriculture, the environment and energy. This is not included in this figure, but is included in the total emissions.
Figur 8
80
20
The Danish Climate Policy Plan
Update of greenhouse-gas projections from the Danish Energy Agency
The projection of future greenhouse gas emissions was
updated in connection with this Climate Policy Plan
taking into consideration a number of developments
that have taken place since the last baseline projection
in September 2012. These developments include the
change in the electric heating tariff in the 2013 Finance
Act, the solar panel agreement in autumn 2012, as well
as the effects of the Growth Plan DK. The projection has
also been adjusted for a significant drop in the price of
CO2 allowances on the European emission trading market. The significant drop in the price of allowances has
led to adjustment of the allowance price estimate from
EUR 22/allowance , as assumed in the baseline projection,
down to EUR 9.6 in 2020.2,3 All else being equal, this will
increase emissions from Danish electricity production.
The basis for projections of greenhouse gas emissions are
existing regulations and policies already adopted. It has
also been assumed that there will be no changes in behaviour. These elements are collectively called ”businessas-usual”.
The projection includes the effect of agreed political initiatives such as agreements on new offshore wind farms.
On the other hand, political agreements and initiatives
where the implementing instruments have not been
decided on are not included.
The projection is based on a number of overall economic
assumptions about economic growth, private consumption, business production, fuel prices, emissions prices,
tax rates, subsidies etc. and a number of technology-specific assumptions regarding the price of different types of
installation, their efficiency etc. Finally, there are assumptions regarding energy-market player behaviour under
pure market conditions.
The results of the projections are very dependent on
these assumptions. The assessment of the effect of specific political initiatives also influences the result. For
example: Planning aspects regarding expansion of wind
power or biogas or assessments of the impact of energy
savings initiatives.
The projection goes up to 2035, and its findings are
obviously very uncertain.
New emission factors from the UN Inter
governmental Panel on Climate Change (IPCC)
In preparation of this Climate Policy Plan, historical and
future emissions have been recalculated in accordance
with the new IPCC guidelines for calculating greenhouse
gas emissions. The new guidelines mean that methane
and nitrous oxide emissions from agriculture in 2010 are
calculated to be lower compared to calculations with old
guidelines; 8.9 mill. tonnes CO2 equivalents compared
with the previous 9.5 mill. tonnes CO2 equivalents. In
accordance with normal practice under the Climate Convention, the historical emissions have been recalculated
using the new guidelines. Total emissions of methane
and nitrous oxide in the 1990 baseline year have been
calculated using the new guidelines at about 10.4 mill.
tonnes CO2 equivalents, against the previous 12.5 mill.
tonnes CO2 equivalents. With regard to total Danish emissions, the new IPCC guidelines mean that total emissions
in the 1990/95 baseline year are now estimated at 67.2
mill. tonnes CO2 equivalents against the 69.3 mill. tonnes CO2 equivalents previously recognised as Denmark’s
baseline-year emissions.
2. The prices have been converted from DKK. The exchange rate used is EUR 1 = DKK 7.5.
3. The market price for allowances is currently even less than the 2020 estimate.
30
1990
2000
2010
2020
2035
2050
Oil and gas
The following gives a brief overview by sector of how emissiAgriculture
Energy
ons have developed historically, and how they are expected
Environment
to develop in the future on the basis of already agreed poliEmissions for 100% renewables
cies.
in transport and energy
70
Energy sector emissions
Figur 4
60
Mill. Tonnes CO2 equivalents
Historically, traditional energy consumption (households,
50
businesses
as well as electricity and heat production) has
accounted for most of the Danish greenhouse gas emis40
sions. In 1990, emissions from these sources totalled more
than30half of all Danish emissions, and this has basically
continued ever since. The supply sector, i.e. electricity and
20 heating production, accounts for most of the emisdistrict
sions, followed by individual use of fossil fuels for industrial
10
processing
and heating buildings.
0
Around 70%
from the
(excl.
1990 of emissions
2000
2010
2020energy sector2050
transport) are subject to the EU emission trading scheme
Historical emissions
80% reduction
(ETS), while about 30% are not subject to the scheme (non40% reduction target
90% reduction
ETS). Non-ETS emissions from the energy sector arise pripathway
marily fromReduction
individual
use of gas and oil in businesses and
households as well as small district heating plants.
Figur 4
40
20
8
2000
Supply
2010
2020
Businesses
2035
Transport
2010
2020
2050
Businesses
Households
se selvstændig figu
Figur
UDG
2
0
1990
2000
2010
2020
2035
Passenger cars
Lorries and vans
Busses
Other transport
Other road transport
Figure 5. Transport sector emissions Note: “Other transport emissions” include railways, and domestic shipping
and aviation.
12
Figur 6
Figur
60
4
Households
Figure
14 4. Energy sector emissions
Agriculture
6
16
10
2000
16
10
1990
1990
2000
Supply
25
0
0
20 energy consumption by the transport sector
Today,
accounts for 1/3 of the
50final energy consumption, and it
15
is based
almost exclusively on fossil fuels. This is directly
reflected in the CO2 emissions from the transport sector.
10
Road transport is responsible
for by far the largest com40
1990
1992 1994Passenger
1996 1998
ponent
consumption.
cars 2000 2002
5 of transport energy
today account for about 57% of CO2 emissions from road
Historical emissions
Projected emissio
0
transport,
while vans and lorries account for around 37%
1990
2000
2010
2020
2035
40% target, inclu
and buses and motorcycles the final 6% (see fig. 5).
30
5
5
Energy
14
Figur 9
12
10
10
Carbon emissions
the transport 80%
sector
rose up to
Historicalfrom
emissions
reduction
2007, after 40%
which
they fell until 2010. So 90%
far, developments
reduction target
reduction
after 2010 look more or less stable. The drop was due to
Reduction pathway
8
manyFigur
factors,
for example the economic crisis which has
depressed growth in transportation, as well as a number of
80
40
initiatives
to reduce CO2 emissions per km. driven. These
initiatives include i.a. reform of car taxation to favour more
35
environmentally
friendly and energy-efficient cars, mini70
mum requirements for biofuels, and the technological
30
development of cars to comply with stricter CO2-EU regulations.
25
Figur 5
15
21
15
10
1990
Mill. Tonnes CO2 equivalents
Mill. Tonnes CO2 equivalents
20
20
Transport
sector emissions
0
35
Figur 5
30
Mill. Tonnes CO2 equivalents
10
Mill. Tonnes CO2 equivalents
40
20
Transport
Figur 2
Mill. Tonnes CO2 equivalents
50
Mill. Tonnes CO2 equivalents
Mill. Tonnes CO2 equivalents
40
The Danish Climate Policy Plan
0
25
60
12
0
22
1990
2000
2010
2020
2035
Passenger cars
Lorries
and vans
The Danish
Climate Policy Plan
Busses
Other transport
Other road transport
Figur 6
From 2012 energy consumption for transport is expected to
increase, despite ongoing energy-efficiency improvements
in vehicles. This is primarily attributable to an increasing
transport activity on the roads. Similarly, increasing air traffic will contribute to higher transport energy consumption.
The increases in energy consumption will not be fully
reflected in carbon emissions. In the 2012 energy agreement it was agreed to mandate 10% biofuels in 2020 in order
to meet the EU renewable energy target for transport. This
means that transport sector emissions in 2020 are expected
to be around 13 mill. tonnes CO2 equivalents, corresponding
to an increase of about 20% compared with the 1990 baseline year.
10
8
Mill. Tonnes CO2 equivalents
In 2010 the transport sector emitted about 13.2 mill. tonnes
CO2 equivalents, which are included in Denmark’s carbon
inventory. Of this figure, road transport was responsible
for about 12.2 mill. tonnes CO2 equivalents, while railways,
domestic shipping and domestic aviation accounted for the
rest.
12
Methane and nitrous oxide emissions from agriculture
are about 9 mill. tonnes CO2 equivalents per year, or about
15% of total Danish emissions. In addition more than 3 mill.
tonnes CO2 equivalents are emitted from soil and pastures.
According to the Kyoto Protocol rules the latter emissions
are included in a separate inventory covering the carbon
balance in soils and forestry. Consequently, the 3 mill. tonnes are not included in figure 6. For more details on inventory rules: See the box page 29: “Carbon storage and emisFigur 10
sions from soils and forestry – LULUCF”.
2
0
1990
2000
2010
2020
2035
Methane – Livestock manure
Nitrous oxide – Livestock
Nitrous oxide – Commercial fertilizer
Nitrous oxide – N runoff
Other
Figure 6. Non-energy-related emissions of methane and
nitrous oxide from agriculture
Note: Calculated with new global warming potential (GWP), see the Catalogue of Climate Change Mitigation Measures.
5
Emissions from agriculture account for a relatively large
4
proportion of total emissions in Denmark compared with
other3 EU countries. This is primarily due to the large and
intensive farming sector in Denmark.
Mill. Tonnes CO2 equivalents
Agricultural sector emissions
4
Methane – enteric fermentation in ruminants
Figur 7
A projection of emissions from the transport sector towards
2020 and 2035 shows an increase in the sector’s relative
share of total Danish emissions. This is due to growth in
transport activity4 and mitigation policies adopted in other
sectors.
6
2
On the basis of the current mitigation efforts within agri1 the projection indicates only a modest decrease
culture,
in emissions up to 2035. As total Danish emissions will be
0
reduced in
the same
in line2020
with reductions
in the
1990
2000period
2010
2035
energy sector, for example, emissions from agriculture will
Landfills, methane
account for an increasing percentage of emissions of greenhouse gases –Wastewater
unless new initiatives are implemented.
Other waste-related
CO2 fromarise
cement,
tile and chalk
Methane emissions
in particular
fromproduction
enteric fermentation in ruminant
livestock
and,
accounting
for 3.6 mill.
Fluorinated gasses
tonnes CO2 equivalents,
thisprocesses
is the largest single source of
Other industrial
methane emissions in Denmark. Another important source
of methane is livestock manure. Since 1990, methane emissions have been almost static.
5
ll. Tonnes CO2 equivalents
4
4. In this context, transport activity is measured in person-km for passenger transport and tonne-km for freight transport, but it does not necessarily imply
3
a growth in transportation measured in terms of number of km covered by vehicles, if the number of people in vehicles is increased.
2
1
F
Mill
0
1990
2000
2010
The Danish Climate Policy Plan
2020
2035
Passenger cars
Lorries and vans
Busses
Other transport
23
55
Other road transport
Figur 6
12
Mill. Tonnes CO2 equivalents
Nitrous
10 oxide (N2O) mostly arises from the use of commercial fertilizers and livestock manure. In the period 1990
-20108 the Danish government have implemented three
action plans for the aquatic environment that have resulted in6 reducing the amount of nitrogen used in agriculture
with 40%-50%, thus contributing to reducing emissions of
4
nitrous oxide from fields by 30% in the same period. This
has so
2 far been the largest contribution from agriculture in
reducing emissions of greenhouse gases.
0
1990
2000
2010
2020
2035
Carbon emissions from soil arise from the conversion of
Methanein– agricultural
enteric fermentation
in ruminants
organic substances
soil, especially
in connection withMethane
intensive–cultivation
of
organogenic
soils.
Net
Livestock manure
carbon emissions
fluctuate
from year to year, depending
Nitrous
oxide – Livestock
on temperature,
precipitation,
size of harvest
etc. There has
Nitrous oxide – Commercial
fertilizer
been a drop in emissions from 1990 onwards because of a
Nitrous oxide – N runoff
number of concrete initiatives, including a ban on straw
Other
burning, catch-crop requirements, abandonment of lowlying farmland, legislation on cultivation-free buffer zones,
EU requirements for areas with permanent pasture etc.
Figur 7
Mio. ton CO2-ækvivalent
50
45
40
2010
2011
2012
2013
2014
Fremskrevne udledninger med højere kv
Emissions from industrial
Fremskrevne udledninger med lavere kvo
processes and waste
Fremskrevne udledninger (centralt kvote
In addition to emissions from large sectors such as energy,
transport and agriculture, there are a number of minor
sources; all with relatively small contributions to the total
emissions of greenhouse gases. These include landfills,
wastewater, industrial processes and F gases (fluorinated
greenhouse gases).
Emissions from landfills are primarily methane arising from
Figur 11
fermentation of organic40material at old waste sites.
Wastewater emits methane from fermentation of organic
material, while the nitrogen, which is also found in wastewater, is converted to nitrous
oxide.
35
5
In addition to carbon emissions from energy consumption,
manufacture of cement, tiles and chalk burning also causes greenhouse gas emissions.
When heating chalk in raw
30
materials it releases CO2.
3
2
1
0
1990
2000
2010
2020
2035
Landfills, methane
Wastewater
Other waste-related
CO2 from cement, tile and chalk production
Fluorinated gasses
Other industrial processes
Figure 7. Emissions from waste, F gases, cement etc. and other
industrial processes
Note: Emissions
from the ”other industrial processes” category arose from
5
one particular chemicals production plant that was closed down between
2000 and 2010.
4
onnes CO2 equivalents
Figur 10
3
2
1
Mill. Tonnes CO2 equivalents
Mill. Tonnes CO2 equivalents
4
Fluorinated gases have previously been used for many purposes, but they are now mostly used in cooling plants and
25
appliances, as well as in electrical connection installations.
2006
2008
2010
Use of fluorinated gases increased significantly after 1990
Reductions
commitment
because they were utilised to replace
CFC gases.
The CFC
Non-ETS
emissions
gases were phased out under the Montreal Protocol because
they were depleting the ozone layer. Fluorinated gases are
all relatively powerful greenhouse gases, although there are
large differences between them.
In 1990 there were considerable emissions of nitrous oxide,
corresponding to almost 1 mill. tonnes CO2 equivalents,
from production of chemical fertilisers, but this production
has now ceased in Denmark.
20
24
The Danish Climate Policy Plan
40
3.
S t a t u s i n re l a t i o n t o t h e
4 0 % t a rg e t f o r 2 0 2 0
35
30
25
Mill. Tonnes CO2 equivalents
Figur 3
20
15
10
5
0
1990
2000
Energy
Agriculture
The Energy Agreement
hasTransport
brought Denmark
a long way
towards realising the target of a 40% reduction by 2020
compared with 1990. This is illustrated in figure 8. However,
significant additional efforts will be needed to reach the target. Furthermore the target should preferably contribute
towards structural changes in 2035 and 2050.
Figur 8
Figur 9
25
The Danish Climate Policy Plan
2010
2020
Environment
Oil andgreenhouse
gas
The projection of total
gas emissions shows
that, without further climate mitigation measures, emissions in 2020 are expected to be around 46.4 mill. tonnes CO2
equivalents. Based on the central estimate for emissions in
2020, a reduction in the region of 4 mill. tonnes CO2 equivalents annually will remain in 2020. However, the projection
is sensitive to a number of parameters.
80
Mill. Tonnes CO2 equivalents
70
60
50
40
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Historical emissions
Projected emissions (estimated central allowances price)
40% target, including contribution from improvements in carbon balance
Figure 8. developments in emissions, 1990-2020 in relation to the 40% reduction target
se selvstændig figur 9
26
The Danish Climate Policy Plan
The EU emission trading system
The EU Emission Trading System (ETS) commenced in
2005 and includes all large CO2 emitters in the EU such as
power plants, large industrial installations and platforms
for oil and gas production. This means that almost one
half of the total EU greenhouse gas emissions are covered
by the system. The main principle in the system is that
enterprises are to deliver allowances for every tonne of
CO2 they emit. These allowances have been allocated or
can be purchased within an overall allowances cap. The
allowances can be traded on a free market.
The overall allowances cap for the first two trading periods 2005-07 and 2008-12 was determined by each Member State preparing an allocation plan with proposals for a
total number of allowances for the country’s enterprises.
The European Commission had to approve these plans
and the sum of the allowances in the approved plans then
made up the total emissions allowed. The idea has been
to reduce emissions by setting a total number of allowances corresponding to the EU’s climate targets, i.e. lower
than the previous and expected emissions. If there is a
shortage of allowances, there will be a price on them.
30
25
20
15
EUR per CO2 equivalent
Figur 9
From the very start, the emission trading system has
seen significant price fluctuations, see the graph below.
This is because, on several occasions, emissions from
ETS companies have been below the emissions caps. If
there is no shortage of allowances, the price will fall. For
the 2005-07 period, the allowances cap was significantly
above the actual emissions, partly because of a lack of
knowledge about the actual emissions in the ETS sector
when the first national allocation plans were drawn up.
When this surplus became clear, the price of allowances
fell to almost zero. For the period 2008-2012, the allowances cap was set at slightly less than the total 2005
emissions in the ETS sector, but the economic crisis since
2007 has led to a very significant drop in production by
the ETS companies and therefore their carbon emissions.
Amongst other things, this means that the price has fallen to less than EUR 4 per allowance. The fall in price is
also because the ETS companies got access to use large
amounts of cheap climate credits, subsidies for renewable
energy, and energy savings have reduced carbon emissions and therefore demand for allowances.
10
5
0
01.01.2005
16.05.2006
EUA 2005-2007
28.09.2007
EUA 2008-2012
09.02.2009
24.06.2010
06.11.2011
EUA 2013-2020
Figure 9. Developments in the price of allowances in the EU ETS
EUA 2005-2007
EUA 2008-2012
EUA 2013-2020
01.08.2013
0
1990
2000
2010
2020
2035
Landfills, methane
The Danish Climate Policy Plan
27
Wastewater
Other waste-related
CO2 from cement, tile and chalk production
Fluorinated gasses
Other industrial processes
On the other hand a further drop in the price cannot be
ruled out, if the problems with the emission trading system
Figur 13
are not resolved. Therefore, a sensitivity calculation with an
allowances price of EUR 0 per tonne has been made. This
calculation shows that emissions could increase by about
0.2 mill tonnes compared with the central estimate.5
The calculations show that a higher allowance price will
reduce Danish emissions significantly, while a lower alloEmissions in
baseline year
19901
Target for
emissions in
2020 with 40%
reduction
Expected contribution from
CO2 uptake
in soil and
forests2
Mill. tonnes CO2 Mill. tonnes CO2 Mill. tonnes CO2
equivalents
equivalents
equivalents
5
Mill. Tonnes CO2 equivalents
4
3
2
1
0
Shortfall
Shortfall
Shortfall
(low allowances price) (central estimate) (high allowances price)
Figure 10. Shortfall to the 40% target with different assumed
allowances prices
wance
price will only increase emissions slightly.6 This is
2,000
illustrated in figure 10 that shows the historical emissions
from1,500
1990 and expected emissions in 2020 with three different assumed allowances prices, and figure 11 that shows
1,000
the shortfall to the 40% reduction target on the basis of
three 500
different assumed allowances prices.
‘000 tonnes CO2 equivalents
The energy area is particularly sensitive to changes inFigur
pri-10
ces of allowances. The central estimate for emissions in
2020 has therefore been calculated assuming an allowances price of EUR 9.6 per tonne. Sensitivity analysis of the
allowances price indicate that if the allowances price doubles in 2020 to EUR 19.2 per tonne, Danish emissions will
fall about 1.2 mill. tonnes. An allowances price of EUR 19.2
per tonne or more is not unrealistic, provided it is possible
to gather support for a tightening of the European emission
trading system. For example, the allowances price in 2008
was EUR 30 per tonne.
0
Maximum
Expected
emissions in 20202
Shortfall inclu1990
2000
2010
emis-sions in
for low, middle and high
ding contribu1
Agricultural
emissions
of greenhouse
gases
allowances
price
tion
from CO2
2020 inclufrom mineral fertiliser
uptake in soil
ding expected
Allowances
Emissions
and forests for
uptake in soil
price 2020
low, middle &
and
Figurforests
14
14.000
high allowan12.000
ces price3
Mill. tonnes CO2 Mill. tonnes CO2
Mill. tonnes CO2 EUR
10.000
equivalents
equivalents
equivalents
8.000
40.3
about 1.9
about 42.2 6.000
Waste p.a. (tonnes)
67.2
4.000
0
46.4
4.2
9.6
46.2
4.0
19.2
45.0
2.8
2.000
Table 1. Shortfall to meeting the Danish government’s target of a 40% reduction by 2020 compared with 1990
Note 1: Historical and future emissions have been updated for this Climate Policy Plan,
0
see box ”Update of the greenhouse-gas projections from the Danish Energy Agency” on page 20. 1990
2000
Note 2: Uptake in soil and forests, assuming no new initiatives. See box on CO2 uptake from soil and forests (LULUCF) page 29.
Waste
landfilled
Note 3. When calculating whether the 40% target has been met, emissions will be adjusted for
electricity
trading.
Waste volume incinerated or reused
2010
5. This asymmetric effect of changes in allowances prices is because the assumed price of EUR 9.6 per tonne in 2020 is so low that use of biomass in electricity and district heating production can more or less only be expected if this gives tax advantages for heating production, although there may still be some
biomass use for electricity production. Note that the sensitivity assumes otherwise unchanged fuel prices and that it will be possible to observe similar
effects for variations in fuel prices, especially in the relative prices between coal and biomass.
6. Within the EU ETS area, carbon emissions are determined by the total allowance allocation. A higher or lower allowance price will therefore not affect
the total carbon emissions at EU level.
Figur 1
28
The Danish Climate Policy Plan
29
The Danish Climate Policy Plan
In addition to the great uncertainty regarding the size of the
shortfall, especially in relation to the allowances price and
general economic trends, there is also uncertainty regarding future energy prices, technological developments,
changes in the carbon balance in the soil and forests, future
consumer behaviour, the effect of initiatives or targets
already decided, as well as the effect of submitted but not
yet adopted proposals in the EU etc. The overall effect of
these uncertainties could pull both towards and away from
meeting the target. Thus it is uncertain in which direction
some of the parameters will develop.
Carbon sequestration or emissions from soil and forests – LULUCF
In Denmark there is continuous sequestration and emission of greenhouse gases, including CO2, methane and
nitrous oxide, from the soil and forests. Part of the sequestration and emissions is a result of working agricultural
soils. Another part is from forestry when new forests are
planted and in environmentally friendly forest management.
As stated in table 1, not only emissions of greenhouse
gases are important for the overall greenhouse gas inventory. Large amounts of CO2 are stored in the soil, biomass
and forests. Sequestration or emissions of CO2 from these
stores are extremely significant for global greenhouse gas
emissions (described under the UNFCCC as the LULUCF
sector (Land Use, Land-Use Change and Forestry). Therefore it has been decided to set off changes in the Danish
carbon balance against emissions from other sectors
when calculating overall fulfilment of the 2020 40% reduction target. This complies with guidelines from the UN.
Set-off calculation will follow the LULUCF regulations
under the Kyoto Protocol. There is especially high uncertainty regarding changes in the carbon balance (before
new initiatives), which can fluctuate considerably from
year to year. The expected contribution from improvements in the carbon balance (before new initiatives) is 1.9
mill. tonnes, corresponding to the average for the current
projection of changes in the carbon balance for 2013-19.
The LULUCF accounting is very uncertain because of the
dependence on meteorological data and a significant
degree of data and methodological uncertainty. Hence
there may be large fluctuations in the annual inventories
– from large uptakes in a specific category in the one year
to large emissions in the next. Inventories and projections
of carbon sequestration and emissions from the LULUCF
sector are based on models and statistical calculations.
Therefore they are quality-assured by international
experts, who are also responsible for final approval.
30
The Danish Climate Policy Plan
31
The Danish Climate Policy Plan
4.
S t ro n g D a n i s h e f f o r t s
for an ambitious
E u ro p e a n c l i m a t e p o l i c y
Danish climate policy is based on two pillars – the European
and the national. As a small country with an open economy,
it is clear that the more Denmark can implement climate
policy with common European solutions, the better the
total effect of climate policy and the easier it will be to maintain Danish competitiveness in relation to trading partners
in the EU.
The EU is also a crucial player in international climate negotiations. An ambitious international climate agreement
requires an ambitious common EU approach for the period
after 2020. The need for a common EU approach was highlighted by the European Council in May 2013.
The European Council has asked the European Commission
to draw up specific proposals for a framework for EU climate
and energy policy in 2030. In light of this, the Commission is
currently considering new and more ambitious climate and
energy targets for the period after 2020. This will follow up
on the EU’s 2008 Climate and Energy Package that established EU targets for 2020 of a 20% reduction in greenhouse
gases compared with 1990, 20% renewable energy and 20%
energy-efficiency improvements.
The Danish government’s ambition is before 2015 to have a
decision on new and more ambitious EU climate and energy
targets for 2020 and beyond. The EU should move towards
the target adopted by the European Council for a reduction
in EU greenhouse gas emissions by 2050 of 80%-95% compared with 1990 levels. Long-term targets are particularly
important for the energy sector due to its long investment
horizons.
In light of this, the Danish government welcomes the indicative targets in the Commission’s 2030 green paper for a
reduction in the EU’s internal greenhouse gas emissions
of 40% by 2030 compared with 1990 as well as a target for
renewable energy of 30% by 2030. Furthermore, the Danish
government supports a binding energy efficiency target for
2030, the size of which is to be assessed on the basis of the
evaluation of the Energy Efficiency Directive in 2014. The
final Danish government position will be set once economic
impact assessments for Denmark have been completed.
Amongst other things, the Danish government calls for the
Commission to examine the advantages and disadvantages of changing the basis of allocation and/or the architecture for EU climate regulation. This includes the possibility
of transferring all the current non-ETS energy consumption
(e.g. energy consumption by transport and to heat individual buildings) into the EU emission trading scheme (ETS).
In a new commitment period, fair burden sharing must be
ensured taking into account countries which, like Denmark,
undertakes massive expansion of renewable energy.
32
The transition will come at a cost. More ambitious EU targets will increase costs for European citizens and companies. At the same time, higher targets will also lead to greater demand for new renewable technologies. This may in
turn lead to these technologies becoming cheaper and
thus make it easier to realise the Danish government’s goal
of a fossil-fuel-free energy supply by 2050. Tightening the
EU’s climate and energy policy may generally contribute to
enhancing the EU’s green growth potential in areas where
Danish companies have strongholds, e.g. energy technology. The majority of Danish exports of climate and energy
technologies go to EU countries.
The Danish government will continue actively to support
and promote an ambitious green climate and energy policy
in the EU as a crucial component of Danish climate policy.
Not only because this will mean the EU can play a positive
role at the global level, but also because the EU’s climate
and energy policy is vital to being able to realise domestic
targets. At the same time, greater climate efforts by the
other EU countries entail European and Danish enterprises being subject to uniform conditions, and this will favour
growth and competition conditions for Danish enterprises.
These are some of the reasons why the Danish government
has also decided to support a number of proposals from the
European Commission, which can contribute to limiting
Danish emissions. The Commission has presented proposals to tighten the CO2 requirements for cars and vans, and
it has been assessed that this will limit emissions from the
Danish transport sector. Similarly, the Danish government
has been striving to make EU agricultural policy greener,
and this may lead to a small, but as yet unquantified, reduction in greenhouse gas emissions from agriculture. The
Danish government is also supporting proposals to revise
the Energy Tax Directive to improve cohesion between the
ETS and non-ETS areas and to increase minimum tax levels.
Finally, there is ongoing support for new proposed energy
efficiency standards under the Eco-Design Directive.
The Danish Climate Policy Plan
Allowances prices are decisive in promoting climate-friendly investments in the EU, including in Denmark. Therefore, allowances prices are also linked to reaching the national 40% target by 2020. The current low allowances price
makes it more difficult to initiate the necessary transition
and green investments.
Developments in allowances prices have particular significance for Danish emissions and they affect the need to
initiate other, new mitigation initiatives. The low allowances price makes the situation relatively more expensive for
countries like Denmark, who want to take the lead. Therefore, efforts to increase the level of ambition in EU climate
policy are key in the Danish government’s climate change
policy to achieve the national target.
Since 2010, the European Commission has published several ideas for structural changes, which could correct the
emission trading system. For example a reduction in the
number of allowances may push the allowances price to a
level which will improve the support for investments in lowemissions technologies. Denmark supports tightening EU
reduction targets in 2020 from 20% to 30% compared with
1990, with the associated considerable reduction in total
emissions rights.
Most recently, the Danish government has decided to support a specific proposal from the European Commission to
amend the ETS Directive by postponing auctions of allowances in order to stabilise the allowances price through
temporary ”back loading”. The Danish support is contingent on a timetable for a structural reform of the EU ETS.
In July 2013 the European Parliament voted to support the
proposal, which is now to be negotiated between the Council and the European Parliament.
Fremskrevne udledninger med lavere kvotepris
Fremskrevne udledninger (centralt kvoteprisskøn)
Figur 11
Figur 15
33
The Danish Climate Policy Plan
40
Mill. Tonnes CO2 equivalents
35
30
25
2006
2008
2010
2012
2014
2016
2018
2020
Reductions commitment
Non-ETS emissions
Figure 11. Non-ETS emissions and EU reduction commitment
Note: Because of limitations in the data, the figure is based on the IPCC 1996 calculation guidelines, while other figures in this Climate Policy Plan are based
on the IPCC 2006 and 2007 calculation guidelines.
Meeting Danish reduction targets
regarding the non-ETS sectors
According to the EU Climate and Energy Package, Denmark
is obliged to reduce emissions of greenhouse gases from
the non-ETS sectors by 20% in 2020 compared with the
2005 level. As an effect of the Energy Agreement Denmark
expects to fulfil the EU target for 2013-2020 for non-ETS
emissions, see figure 12. The EU commitment for the period
2013-2020 is annual, and surpluses/deficits can be transferred between years. The implication is that emissions in
2020 do not necessarily have to be 20% less than the 2005
level to fulfil the obligation. Overall, Denmark expects to
exceed the EU commitment for the non-ETS sectors.
5.000
4.000
Setting a national target for the non-ETS sector has been
considered. However, it has been deemed important that
the policy decisions made for 2020 are cost-effective and
pave the way to initiating reductions in all sectors. Therefore the Danish government wants all sectors to deliver
reductions before 2020, even though realising the 40% target for 2020 will come at a cost. Economically sound climate
mitigation efforts in the different sectors up to 2020 must
underpin and contribute to the long-term structural conversion moving forward to the 2050 target.
34
The Danish Climate Policy Plan
35
The Danish Climate Policy Plan
5.
Fo u n d a t i o n
for an ambitious
national climate policy
Prudent climate policy is not limited to pursue an ambitious
European climate policy. It also involves pursuing a national
policy in which climate change concerns are integrated
into the actions and initiatives implemented in all sectors
emitting greenhouse gases, i.e. energy, transport, agriculture and the environment.
It is about organising climate policy so that climate change
mitigation concerns are integrated in solutions to achieve
other high priority goals such as growth, private job creation, resource efficiency, natural values, or security of
energy supply. This entails integrating climate change
mitigation measures into policies implemented for nature,
agricultural revenues, mobility, etc. Fortunately there is
great synergy in a large number of areas between what is
required to reduce greenhouse gases and what is required
to realise sector goals. For example, exploitation of biogas
can reduce odour nuisances from spreading slurry on fields,
reduce nitrogen loads on nature, increase the production of
renewable energy, improve security of supply, and reduce
greenhouse gas emissions from agriculture.
Figure 12 illustrates a number of these synergies. The following section describes in more detail the possibilities to
achieve reductions and pursue synergies in the energy,
transport, agriculture and environment sectors, respectively.
36
The Danish Climate Policy Plan
Agriculture
Environment
Nitrogen
Climate adaptation
Nature / Biodiversity
Energy production
Recreation
Odour nuisance
Resource efficiency
Odour nuisance
Energy production
Greenhouse
gas emissions
Transport
Energy
Congestion
Particle pollution
Noise
NOx
Renewables targets
Security of supply
Energy efficiency
Comfort
Figure 12. Synergies in climate policy
Integration of climate change
mitigation in energy policies
The energy sector is subject to extensive regulation both
nationally and in the EU. All Danish internal energy consumption is subject to energy and CO2 taxes or covered by
the EU ETS , which sets a price on CO2 emissions. Significant
energy and CO2 taxes as well as the ETS have contributed
to reducing energy consumption and thus reducing carbon
emissions. In addition, standards have been set for maximum energy consumption in buildings and a number of
appliances. In energy supply, a number of subsidy schemes
to promote renewable energy and heating supply is subject
to municipal heat-planning.
The 2012 energy agreement contains specific measures,
which are expected to reduce emissions from the energy
sector considerably up to 2020. In 2020 energy use (excl.
transport) is expected to account for about 40% of total
Danish emissions.
37
The Danish Climate Policy Plan
The Danish government has ambitious goals to phase out
fossil fuels. In 2030 the Danish government’s goal is that all
use of coal will have been phased out, while electricity and
heat production is to be 100% covered by renewables by
2035. Fulfilling these goals will also eliminate CO2 emissions
from this part of the energy sector.
The energy agreement contains a number of steps to stimulate the conversion to renewable energy, including massive
expansion of wind power and intensified energy-efficiency
improvements. The energy agreement also focus on conversion to renewables of industrial energy consumption.
This is achieved through a large subsidy scheme for investments in renewable energy in industry and possibilities for
support to use biogas in production processes.
Even after full phasing in of the initiatives in the energy
agreement, significant challenges will remain before the
long-term transformation of the energy system can be
completed. Without new initiatives, in 2035 there will still
be a significant consumption of fossil fuels for electricity
and heat production, including individual heat production
in households.
The energy agreement of 22 March 2012 in brief
The Energy Agreement secured broad political commitment to an ambitious green transition plan that focuses
on energy savings throughout society, and promotion of
renewable energy through more wind turbines, more biogas and more biomass. Thus the agreement is an important milestone on the road to converting Denmark’s
entire energy supply to renewable energy in 2050. The
agreement includes a series of energy policy initiatives
for the period 2012-2020, and the political parties involved will take stock of the developments regularly. Before
the end of 2018, further initiatives for the period following
2020 will be discussed.
Energy efficiency improvements are crucial to increasing
the share of renewable energy in total energy consumption. The agreement includes that the energy saving
obligations on energy companies are to be intensified significantly, and that an overall strategy for energy renovation of Danish buildings is to be prepared. The minimum
requirements for building elements in the building regulations will reflect future challenges and future energy
prices.
The agreement is expected to ensure a wind-power share
of around 50 % of electricity consumption by 2020. This
will be secured through a significant expansion of wind
power up to 2020, with plans for 1000 MW offshore wind
turbines, 500 MW near-shore wind turbines and additional 500 MW net onshore wind turbines, after accounting
for decommissioning old wind turbines.
The energy agreement has earmarked a total of EUR 13.3
mill. over the next four years to support development and
use of new renewable energy technologies for electricity
production (solar, wave etc.). EUR 3.3 mill. will be used for
wave power as well as a pool of EUR 4.7 mill. to promote
new renewable technologies for heating, e.g. geothermal energy and large heat pumps. In 2012-2015 a pool of
EUR 5.6 mill. has been earmarked to bolster the conversion from oil- and gas-fired boilers in existing buildings
to renewable energy. Businesses must also be involved
in the conversion to a greener energy system. As a consequence the agreement includes subsidies to promote
energy-efficient use of renewable energy in industrial
production processes.
The 2013 pool of EUR 33.3 million will be increased to
EUR 66.7 mill. in 2014 and continue at EUR 60 mill. per
year from 2015 to 2020. Ambitious biogas expansion will
also be completed. This will be through financial support
– including new ways to use biogas in the natural gas grid,
in industrial processes and in the transport sector.
The existing subsidies and tariffs system will be reviewed
with a view to assessing the need for adjustments so that
in a socio-economic context it provides appropriate incentives to convert to a green and flexible energy system.
38
The Danish Climate Policy Plan
By converting the remaining parts of the electricity and
heating supply system by 2035, the remaining emissions
from energy supply in 2035 ( excl. transport) will be limited
to emissions from fossil energy consumption by industry,
corresponding to less than 10% of total Danish emissions in
2035.
Conversion of energy supply to renewables will entail
costs. To a large extent the cheapest method of limiting
fossil energy use is to limit the total energy service needs
through efficiency improvements in all parts of the energy
system. In the consumption phase, the quantities of energy
required to satisfy a given energy service can be reduced
through better insulated thermal envelopes in buildings
or energy-efficient appliances and lighting, for example.
In other cases the transfer to new technology in itself will
minimise the need for primary energy.
When setting priorities for short-term efforts, it is important
to note that due to long life-times much energy equipment
will only be put in place or replaced once before 2050. As
a general rule there will be considerable additional costs
in changing technologies before they are obsolete. Hence,
conversion to low emission technologies should preferably be undertaken, when there is to be investment in the
energy system in any case (e.g. new electricity production
technology, building renovation etc.).
Transforming the current energy system to a system without fossil fuels remains a great challenge. But the energy
system is expected to undergo extensive changes at all
events in the decades to come. It will be possible to convert
the energy system within a time horizon of 40 years without premature scrapping of the energy system.
If the goal of electricity and heat production based on 100%
renewables in 2035 is to be met without premature scrapping, no more electricity generation installations based on
fossil fuels should be established in Denmark.
Another example is reducing the need for heating in buildings. Different analyses indicate that major energy retrofits are only profitable when carried out in connection with
renovation projects undertaken for other reasons (e.g. replacing a roof). This means that the savings potential, which is
not realised along with other renovations today, will retain
high electricity or district heating consumption in 2050.
Use of fossil fuels and thereby greenhouse gas emissions
can be reduced considerably through energy-efficiency
improvements. However, in order to phase out fossil fuel
use entirely it is necessary to replace technologies which
use fossil fuels with technologies using renewable energy
resources.
Conversion of the energy sector to 100% renewables
through intensive energy savings and conversion to renewable sources will both contribute to climate change mitigation and improve security of energy supply.
Improvements in the energy efficiency of the existing building stock
–– Major renovations of building components are usually
only made at intervals of 30-40 years. As a result there
is usually only one chance to make energy improvements along with renovation projects, which are to be
completed in any case.
–– Stand-alone energy retrofits will be expensive. If
energy improvements are not made in connection
with other building renovation, costs will increase
significantly.
–– The potential not realised today along with other
renovations will lead to high electricity and dis-trict
heating consumption continuing to 2035, where the
goal is that both electricity and heating should be
based on renewable energy. All else being equal, it
seems as if this will increase the overall cost of conversion to an energy system without fossil fuels.
The Danish Climate Policy Plan
Integration of climate change
mitigation in transport policies
The transport sector is generally characterised by significant energy taxes on fuels as well as NOx and CO2 taxes
and car taxes. High taxes have helped stem the increase in
emissions from the transport sector. Furthermore there are
continuous investments in infrastructure as well as diverse
demonstration and test schemes to promote new technology. These initiatives are being promoted through earlier
political agreements.
39
In 2009 ”A Green Transport Policy” agreement was put in
place agreeing on a number of specific initiatives, including the ”Drive Green” campaign, energy labelling of vans,
certification for municipal and corporate green transport,
recommendations for green procurement, green taxies,
continuation of tests on module trains, trials for energyefficient transport solutions etc. The agreement also includes significant investment in expanding the railway system.
This will provide greater capacity and make public transport
more attractive, along with other initiatives to enhance bus
and cycle conditions. Initiatives like these generate synergies by reducing congestion and climate impacts at the
same time as maintaining mobility.
40
The Danish Climate Policy Plan
Initiatives adopted for transport
The Danish government has in its government platform and subsequent political agreements made decisions that will
contribute to the green transition of the transport sector up to 2020 and beyond.
Tax exemptions for electric and hydrogen cars: The Danish government has extended the tax-exemption period for
electric and hydrogen cars to the end of 2015.
Promotion of cycling: An important priority for the Danish government is to promote cycling. Between 2009 and 2014,
EUR 133.3 mill. has been earmarked to enhance cycling and make it a more attractive, safe and widespread mode of
transport.
Transport initiatives in the energy agreement:
–– Strategy for energy-efficient vehicles with a pool of EUR 9.3 mill. for infrastructure for electric, hydrogen and gas for
heavy transport. The strategy has provided infrastructure funding through partnerships in which players contribute
the necessary knowledge and resources.
–– Electric car pilot scheme continued with EUR 2 mill. in total for 2013 to 2015. The pool is an extension of the pilot
scheme in operation from 2008 to 2012, which has contributed with concrete experience with electric cars.
–– The Biofuel Act is to be amended in order to secure mixes with 10% biofuels by 2020. Implementation is awaiting an
analysis of alternative methods of meeting the renewable energy target for transport, see the energy agreement.
–– In the period 2013 to 2015 a total of EUR 1.25 mill. has been earmarked to analyse the climate and energy aspects of
using alternative fuels. This analysis will at teh same time develop the Danish Energy Agency’s model for alternative fuels, which indicates future technology paths for transport.
Electrification of railways: In February 2012, the political parties behind the ”A Green Transport Policy” agreement
agreed on electrification of the track between Esbjerg and Lunderskov. This will make it possible to go from Copenhagen
to Esbjerg by electric train in 2015. The parties behind the June 2012 ”Better and Cheaper Public Transport” agreement
decided on procurement of 15 new electric trains for inter-regional transport. A total of EUR 86.7 mill. was earmarked in
the agreement on the 2013 budget for electrification of the track between Køge and Næstved.
Train Fund DK: The Danish government has launched a proposal, which reserves EUR 3.7 bn. from a newly established oil
revenue fund for an historic improvement of the Danish railway system. Train Fund DK will be utilised to realise the ”hour
model” so that travelling time between Copenhagen and Odense, Odense and Aarhus as well as Aarhus and Aalborg is
reduced by one hour for each stretch. It has also been proposed that all mainline routes in Denmark be electrified.
Cheaper public transport : In June 2012, the parties behind the ”Better and Cheaper Public Transport” agreement established an agreement on a number of initiatives to secure better and cheaper public transport. The agreement implements annual fare reductions of DKK 662 mill. from 2013 and a total of EUR 347 mill. will be invested in better public
transport.
The Danish Climate Policy Plan
The Danish government coalition agreement states that
it is necessary to bring down pollution from the transport
sector. In this context it is also important that lower carbon
emissions from the sector contribute significantly to meeting climate objectives.
The Danish government’s goal that all energy supply for
transport is to come from renewables by 2050 means that
the transport sector will have to undergo a sweeping green
transition in future decades. This must be reconciled with
other transport policy goals such as ensuring mobility and
reducing congestion.
Conversion to renewable energy in the transport sector is
a special challenge, partly because the transition in Denmark depends on international technology development.
A number of energy-efficiency options, for example for conventional vehicles, will probably involve no or very slight
additional costs, while other green technologies in the near
future may carry significant additional costs. In this context
it is vital that the rate of conversion is tempered so that it
does not become too expensive.
41
Opportunities to reduce emissions from transport can
roughly be divided into four categories:
–– Efforts to reduce carbon emissions by using fuels with
low carbon emissions per energy unit. E.g. electric cars,
biogas or biofuels.
–– Efforts which decouple growth in demand for transport
from economic growth. This aspect can be influenced
through taxes on buying, owning and using cars, as well
as through spatial planning.
–– Efforts which make transport systems more efficient so
that more is transported per km covered by a vehicle.
E.g. transferring passenger transport from cars to public
transport or increasing the amount of goods on an
individual vehicle.
–– Efforts which reduce energy consumption per km
covered. E.g. technology improvements or changes in
behaviour.
Primarily it is important to ensure continued improvement
in energy efficiency in the transport sector in a cost-effectively way. This generates fuel savings and in the long term
reduces the need for renewable energy resources for the
transport sector.
42
The Danish Climate Policy Plan
Improvements in the energy efficiency of cars
In addition to the initiatives already adopted and
the possible new initiatives, two other initiatives will
in general contribute to promoting energy efficient
vehicles, with a derived climate effect.
CO2 regulations for cars and vans
In 2009, the EU introduced performance standards for
cars, such that new cars sold from 2015 may not emit
more than 130 gram CO2/km on average. There is also
a goal for average CO2 emissions from new cars to be
95 gram CO2/km from 2020. Denmark already met the
2015 requirement in 2011.
In 2011 a corresponding regulation for vans was introduced so that on average vans may not emit more than
175 gram CO2/km from 2017. In addition there is a preliminary objective for average CO2 emissions from vans
to be at 147 gram CO2/km from 2020.
In June 2012 the European Commission tabled a proposal to change the two regulations. The proposed
amendments establish the necessary mechanisms
and initiatives to ensure an average emission ceiling
of 95 gram CO2/km for cars and 147 gram CO2/km for
vans in 2020.
Assessments show that if the proposal is implemented,
it will in a Danish context provide CO2 reductions of
210,000-350,000 tonnes in 2020. The proposals follow
the normal Union legislation procedure.
Revenue-neutral reform for taxes on cars
Furthermore the Danish government will implement
a revenue-neutral reform of taxes on cars which promotes environment-friendly and climate-friendly cars.
This underpins the goal in this Climate Policy Plan for
a more energy-efficient transport sector. The reduction
potential depends on the actual reform, and the reform
will also underpin the EU regulations for carbon emissions from cars and vans.
Other
43
The Danish Climate Policy Plan
Figur 7
Figur
5
A number of initiatives have already been planned and
adopted to reduce emissions from the transport sector
Figur 13
through energy-efficiency improvements and conversion
to renewable energy. In the future, decisions will be necessary on other contributions to green conversion of the
transport sector. At the same time, climate change mitigation concerns must be incorporated in transport policy so
that carbon emissions are reduced and mobility increased,
while congestion and air pollution are kept to a minimum.
It is also clear that, in addition to considering the climate
issue, proposals must always be assessed in the context of
the current economic situation, the need for mobility, the
flexible labour market, etc.
Moreover, in recent years the Congestion Committee has
presented proposals for how congestion and pollution can
Figur 14
be reduced in the Copenhagen area.
1
Environment, nature and climate impacts from agriculture
0
are primarily
1990 regulated
2000 through
2010 national
2020 implementation
2035
of EU directives and through subsidy schemes as part of
Landfills, methane
i.a. the European Agricultural Fund for Rural Development.
Wastewater
The agricultural sector is not subject to the ETS or taxation
Other waste-related
based on methane
and nitrous oxide emissions from agriCO
from
cement,
and chalk
production
culture. These 2emissions
aretile
however
affected
by other
Fluorinated
gasses
regulation, e.g.
nitrogen standards
for agriculture.
Other industrial processes
In general, experience shows that agricultural and forestry policies can simultaneously contribute to meeting
nature, environment and greenhouse reduction goals. For
5
example,
afforestation contributes to greenhouse gas emissions reductions, nature creation and groundwater pro4
tection, while efforts to improve the aquatic environment
and nature
have led to a dramatic reduction in greenhouse
3
gas emissions from agriculture since the 1990s. Therefore,
2
reduction
efforts in agriculture should largely be considered in the context of opportunities to meet goals for both
1
the aquatic
environment and nature. This will achieve the
largest possible synergy effects, and it will provide Danish
0
agricultureShortfall
with opportunities
to prosper. There
is also a
Shortfall
Shortfall
(low
allowances
price)
(central
estimate)
(high
allowances
price)
potential to develop new sustainable agricultural methods
and technologies that reduce environmental and climate
impacts while also improving productivity and competitiveness and opening for new export opportunities.
Mill. Tonnes CO2 equivalents
In order to achieve a transport sector supplied 100% from
renewables, taking into account the requirement for mobility and the growing transport services needed, it will be
necessary to reduce drastically energy consumption by the
transport sector. This will require technological developments. There is also potential to increase the rate of capacity utilisation for freight and passenger transport and to
promote more energy-efficient means of transport.
3
2
Integration
of climate change
mitigation in agriculture policies
2,000
‘000 tonnes CO2 equivalents
In the long-term transition, electric transport is expected
to play an important role, especially for passenger transport. In the short term, biogas and biofuels may contribute
to meeting the goal to increase use of renewable energy in
the transport sector. Where 1st generation biofuels contribute to this, it is important to secure sustainability. In the
longer term, 2nd generation biofuels based on waste and
residues could play an important role, especially for heavy
transport such as transport of goods and aviation, for which
electric power will probably not be possible. However, this
requires cheaper production of 2nd generation biofuels
than at present. In order to promote sustainable 2nd generation biofuels, the Danish government is working in the
EU to enhance the Commission’s proposal to change the
regulations for biofuels in the Fuel Quality Directive and the
Figur 10
Renewables Directive. New regulations will help bolster the
sustainability of biofuels used in the transport sector.
Mill. Tonnes CO2 equivalents
4
1,500
1,000
500
0
Figur
1990
2000
2010
Figure 13.Agricultural
Agriculturalemissions
emissions
greenhouse
gases from
of of
greenhouse
gases
mineral fertiliser
from mineral fertiliser
14.000
12.000
10.000
8.000
44
The Danish Climate Policy Plan
The Danish Climate Policy Plan
45
Regulations on the aquatic environment in particular have
had positive effects on greenhouse gas emissions from agriculture. From 1990 to 2010 the consumption of commercial fertilisers has been reduced by around 50%, and this
has resulted in a corresponding reduction in emissions of
nitrous oxide from commercial fertiliser, which is no longer
applied to fields. Therefore there is a synergy here between
reducing impacts on the aquatic environment, nature and
the climate.
Emissions of methane were relatively constant from 1990 to
2010. However there has been a shift in the sources of emissions, for example the stock of milking cows fell over the
period. At the same time there was a significant increase in
productivity within milk production. Methane emissions
from cows express a loss of feed energy, and they should
be limited as much as possible in order to save feed costs as
well as spare the climate. Emissions could possibly be reduced by changing the feed given to cattle and by developing
low-emission cows, which emit less methane. Methane
from livestock manure can be reduced by treatment in a
biogas plant, cooling slurry in sheds, and covering slurry
tanks. A side-effect of biogas production is that more plantaccessible nitrogen is formed in the slurry, which benefits
farmers. Secondly, the biogas produced can be used in combined heat and power production, thereby displacing use of
fossil fuels.
There are good examples of synergies between good farming practices and increased carbon sequestration in the
soil. For example, the ban on burning straw on fields has
reduced the loss of carbon from agricultural soil. There
are also farms which apply conservation tillage practices
to ensure better soil fertility and to increase the carbon
content. The loss of carbon from the soil can be curbed in
many ways, or reversed to an overall net carbon uptake, if
cultivation and tillage is optimised and if there is more use
of perennial crops. There are a number of measures, which
increase carbon sequestration e.g. pastures suitable for carbon storage and perennial energy crops, such as energy willow. Afforestation can also contribute to increased carbon
sequestration. Restoration of wetlands in low-lying areas
is also an effective way of increasing carbon sequestration
with positive derived effects for nature and the aquatic environment. Several of these tools are already well known from
46
The Danish Climate Policy Plan
Recommendations from the
Nature and Agriculture Commission
In spring 2013, the Nature and Agriculture Commission
established by the Danish government in 2012 presented its recommendations for how to create growth
and development in agriculture, and for how the agricultural industry can contribute to climate mitigation
efforts and to improve nature and the environment.
The Commission recommends significant changes in
the way in which agriculture is regulated in the future.
Furthermore, it highlights that agriculture can contribute to reducing Denmark’s climate impact.
The Commission points out that agricultural mitigation efforts could benefit from being coupled with
future nature and environment efforts, so that climate
change mitigation concerns are included in the decisions on initiatives in the aquatic and nature areas. The
Commission recommends several initiatives to reduce
climate impacts from agriculture, e.g. set-aside of farmland for nature, adoption of a new emissions-based
environmental regulation, subsidies for establishing
new biogas plant and subsidies for climate projects at
the farm level.
The Commission also points out that sustainable use
of agricultural biomass resources will both underpin
growth and employment in the industry as well as
benefit nature, the environment and the climate.
subsidy schemes under the Danish part of the European
Agricultural Fund for Rural Development and other EU environment support schemes such as the LIFE schemes.
Moving forward there are also possibilities for synergy between protection of the aquatic environment through lower
nitrogen emissions and reductions in greenhouse gas emissions. Emissions of nitrous oxide arise from losses of nitrogen applied to fertilise fields. Nitrous oxide emissions can be
reduced by continuing to increase the efficiency of livestock
manure application so that a larger proportion of the nutrients are exploited to promote crop growth. This could be
achieved either by biogasification or acidification of the
livestock manure.
In following up on the recommendations from the Nature
and Agriculture Commission (See box) the Danish government has initiated a number of studies. These studies will
form the basis of the formulation of new aquatic and nature
policies from 2016 to 2021 and at the same time integrate
climate change mitigation concerns as was recommended
by the Nature and Agriculture Commission.
Figur 10
47
The Danish
5 Climate Policy Plan
Mill. Tonnes CO2 equivalents
4
3
2
1
Integration
of climate change
0
Shortfall
Shortfall
Shortfall
mitigation
in environment
policies
(low allowances price) (central estimate) (high allowances price)
Figur 13
There are a number of significant emission sources within
industrial processes and waste. These are waste landfills,
wastewater and emissions from certain industrial processes.
‘000 tonnes CO2 equivalents
2,000
Landfills are regulated by both national and EU regulations.
The1,500
EU Waste Framework Directive has led to requirements
regarding recycling of paper, for example, and mandatory
1,000
recovery of methane from landfills. Furthermore, in 1997
a national
ban was introduced on landfilling waste suita500
ble for incineration. The ban includes most organic waste.
These regulations
have led to an estimated halving of emis0
1990
2000
sions from landfills from 1990 to
the present day. 2010
Therefore,
of greenhouse
gases
in generalAgricultural
only older emissions
landfills today
contribute
to methane
from
fertiliser
emissions,
andmineral
these are
gradually being phased out.
12.000
10.000
8.000
6.000
4.000
2.000
0
In addition to the climate mitigation effect from the landfill
ban, other synergies with environment policies are seen,
e.g. Denmark has not had to establish new landfills with the
consequential environmental problems caused by these.
Despite considerable reductions in methane emissions
from landfills since 1990, it is still possible to technically
Figur
15
reduce
emissions
further.5.000
This may be achieved by establishing bio-covers at landfills that convert the remaining
4.000 to CO . Moreover, emissilow levels of methane emissions
2
ons of fossil CO2 from incinerating waste can be reduced, if
3.000
plastic is separated before incineration. How waste is used
and exploited will be part of the Danish government’s forthcoming resources strategy2.000
for waste management.
DKK per tonnes CO2 equivalents
14.000
Waste p.a. (tonnes)
Figur 14
and fossil fuels for electricity and heat production. Plastic is
manufactured on the basis of mineral oil and incineration
of plastic causes emissions of fossil CO2. Still, waste incineration as a strategy has led to significant net reductions in
greenhouse gas emissions compared with continued landfilling.
1990
2000
2010
Waste landfilled
Waste volume incinerated or reused
Figure 14. Waste volumes for incineration and landfill
The ban on landfilling waste suitable for incineration has
led to the current situation where more or less all combustible waste is incinerated at waste incineration plants.
Waste incineration plants transform considerable amounts
of waste, composed of organic waste and plastics, to electricity and heating. This displaces the use of both biomass
1.000
Methane emissions from waste water will become a less
significant issue as emissions mainly come from septic
0
tanks, which are currently being demolished and repla1.000
2.000
ced with sewerage systems and other modern treatment
-1.000
solutions due to implementation of plans for the aquatic
environment (the Water Framework Directive). Emissions
-2.000
of nitrous oxide primarily come from larger wastewater treatment plants and in general
-3.000they amount to a very small
percentage of total emissions of greenhouse gases. The
potential for reductions in emissions of nitrous oxide from
-4.000
wastewater is somewhat uncertain. Specific initiatives will
require further research and studies of calculation methods
-5.000
as well as knowledge about specific reduction technologies.
Industrial emissions from cement, lime and tile production
is inextricably linked to use of lime as a raw material. Since
2005, almost all energy and process-related carbon emissions from cement production etc. have been subject to the
EU Emission Trading System and allowances have to be
returned for all CO2 emitted. This puts a price on the emissions and provides an incentive for manufacturers to reduce
emissions and consumers to limit use.
3.000
48
The Danish Climate Policy Plan
49
The Danish Climate Policy Plan
6.
Reduction potentials
a n d co st s i n D e n m a rk
In spring 2012, the Danish government set up an interministerial working group in order to provide a very wide
range of potential climate change mitigation measures and
associated costs, which may contribute to achieving the
Danish government’s 40% reductions target in 2020. This
inter-ministerial working group has drawn up a catalogue
of mitigation measures, and the catalogue is being published in parallel with this Climate Policy Plan. The working
group has made quantitative analyses of 54 measures, and
furthermore it has performed qualitative analyses of 31
initiatives, since there is not sufficient quantitative data
available for quantitative analysis of these initiatives. The
measures analysed quantitatively cover the sectors that
are relevant for reducing greenhouse gas emissions further,
moving forward to 2020. The inter-ministerial working
group has focussed on the non-ETS sectors and on making
calculations on a number of measures in the energy area as
a supplement to the 2012 energy agreement.
The inter-ministerial working group was asked to analyse
possible mitigation measures in a wide context within a
given time horizon. The list of measures addressed by the
working group is not exhaustive. Yet, they are examples of
a range of possible mitigation measures, which can inspire
policy decisions on climate efforts up to 2020. Not all the
measures in the catalogue reconcile with Danish government policy in general, see part 7. Still, the analyses were
carried out to give an overview of the reduction potentials.
The CO2 shadow price is an important concept in the catalogue drawn up by the inter-ministerial working group. The
main assumptions made by the working group to calculate
shadow prices, impacts and economic aspects, as well as
conclusions, are described in the catalogue.
50
The Danish Climate Policy Plan
CO2 shadow prices in brief
The CO2 shadow price is an expression of the socio-economic cost for a reduction in greenhouse gas emissions of
one tonne CO2 equivalents for a specific mitigation measure. The socio-economic cost is calculated by totalling all
the benefits and costs for society, which have proven possible to quantify. The benefits of the CO2 reduction are not
set off, though, as otherwise they would be included in
the calculation twice. These costs and benefits for society,
e.g. the costs of a wind turbine, the benefits of electricity
production and reduced air pollution are added together,
and the result is divided by the CO2 reduction in tonnes.
This provides a measure of the costs to society in DKK per
tonne of CO2 equivalents, i.e. the CO2 shadow price.
Comparing shadow prices for the specific mitigation
measures provides an oversight of which measures are
the most cost-effective in a socio-economic context. If the
shadow price is negative, there will be a socio-economic
gain in implementing the initiative. This may be the case,
if the socio-economic value of fuel savings or the value
of side-effects such as improved aquatic environment
exceeds the costs of the initiative. The catalogue of mitigation measures also includes the shadow price without
side-effects.
51
The Danish Climate Policy Plan
The graph below shows the marginal reduction cost per
tonne CO2 equivalents for all the mitigation measures analysed quantitatively by the inter-ministerial working group.
The measures have been included with their respective
reduction potential in 2020 and the socio-economic shadow price. The measures have been ranked according to
the size of the shadow price. Not surprisingly therefore, the
Figur 15
graph illustrates that the greater the reductions, the more
expensive the initiatives required. The shadow prices of the
calculated measures range over a very large interval: From
shadow prices of less than zero, which generally also have
very low potential, up to several thousand DKK per tonne
of CO2 equivalents.
5.000
4.000
DKK per tonnes CO2 equivalents
3.000
2.000
1.000
0
1.000
2.000
3.000
4.000
-1.000
5.000
6.000
7.000
8.000
9.000
1.000 ton CO2-ækvivalent
-2.000
-3.000
-4.000
-5.000
Figure 15. Potential curve with marginal reduction costs
Note: The graph shows the reduction potentials on the x axis and the associated socio-economic costs on the y axis. The graph only includes measures,
which can be realised technically and will have an impact before 2020. Measures analysed qualitatively by the inter-ministerial working group have also
been excluded from the graph. These include certain EU initiatives decided independently of national climate policy. The graph takes account of the overlap between different mitigation measures , as the effect of various energy savings measures aimed at the same energy consumption, for example, cannot
be aggregated.
The shadow prices in the graph contain the socio-economic
value of the nitrogen reductions until a reduction of 22,700
tonnes has been achieved (measured at the root zone).
Beyond this level the shadow prices are stated without a
value of nitrogen reductions. This is a technical calculation
assumption based on nitrogen reduction targets adopted
by the previous Danish government. The present Danish
government has not taken a position on new targets for
nitrogen-reduction. This will be outlined in inter-ministerial work on follow-up to the recommendations from the
Nature and Agriculture Commission and future aquatic
environment and nature efforts.
The graph is purely illustrative. This is because the calculations are based on an incomplete list of mitigation measures.
Secondly, not all the measures included in the catalogue
are in accordance with the Danish government’s policies in
general. And thirdly, in practice other considerations come
into play which are not reflected in the shadow prices.
52
Three important conclusions can be drawn from the calculations presented in the working group’s catalogue of mitigation measures:
–– It is possible to reduce Denmark’s emissions of greenhouse gases significantly, and it is technically and physically possible to meet the target of a 40% reduction by
2020 compared with 1990. In principle, the initiatives in
the catalogue could reduce emissions by an estimated
8.5 mill. tonnes CO2 equivalents in 2020. With a total
reduction potential which exceeds by far the shortfall in
2020, it is possible to make a carefully considered selection of the most appropriate measures. The catalogue
also shows that costs rise with increases in the size of
efforts required.
–– A number of mitigation measures in agriculture, transport and the environmental area could lead to reductions in greenhouse gas emissions. A significant part of
the challenge in meeting the 2020 reduction target of
40% could therefore be resolved in line with implementation of measures in these areas. Thus it is possible to
create synergy between climate policy and other policy
areas.
–– The catalogue of mitigation measures indicates that
there are possible mitigation measures in all sectors,
which can contribute to the long-term structural transition towards the 2050 objective. This is in line with the
Danish government’s wish that all sectors are to deliver
reductions before 2020 in order to underpin the longterm transition.
Furthermore, the catalogue of mitigation measures outlines some trends with respect to the measures at sector
level. In the agricultural sector, a number of measures have
been identified with low reduction costs and a considerable reduction potential. The challenge for these measures,
however, is that they entail costs for the farmer and/or the
state. The trend in the transport sector is that the initiatives
with significant reductions have higher shadow prices. This
should be considered in light of the limited technological
options currently available, the high level of taxes on cars,
as well as the energy consumption and CO2 emissions in
this sector. Furthermore, the high societal value of mobility
The Danish Climate Policy Plan
also comes into play. Also in the transport sector, a number
of initiatives to promote technological solutions have been
analysed, which will not be able to deliver large reductions
before 2020, but which could point towards structural changes for the sector with respect to the long-term transition.
For the energy sector, the catalogue indicates that, despite
the ambitious energy policy, there are still reduction potentials, which could come into play moving forward to 2020.
Finally, there are also possible measures in the waste area to
reduce greenhouse gas emissions.
The inter-ministerial working group’s report is an important contribution to organising a sound greenhouse gas
reduction policy, which will be implemented in the years
to come. However, the catalogue does not cover all possible
measures and therefore it is in no way an indication of the
maximum reduction potential in society. In practice the
potentials are considerably greater, but the socio-economic
costs are most likely to increase for larger reductions to be
retained.
The green transition will come at a cost. Implementation of
specific measures will typically lead to budgetary costs for
either the Danish government, the business community or
households – even if the measures have negative socio-economic reduction costs. Both the size and distribution of the
budgetary costs vary according to assumptions regarding
which policy instrument to be used to implement the measure. For example, whether a mitigation measure is implemented through Danish government subsidies or statutory
requirements will make a large budgetary difference for the
Danish government and the agricultural sector, respectively. It is generally presupposed that it will not be possible
for agriculture to pass on any cost increases in product prices, because agricultural products are sold on a very competitive market. These considerations must be taken into
account in overall climate policy. The catalogue of mitigation measures include, for each measure, the policy instrument assumed in the calculations as well as the budgetary
effect for the individual parties. These are preliminary calculations and will have to be developed further, before the
Danish government can decide, whether to implement a
given measure.
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The Danish Climate Policy Plan
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The Danish Climate Policy Plan
7.
Principles in
Danish climate policy
Integration of climate change
mitigation in other policy areas
Integration of climate change mitigation in other policy
areas is a fundamental principle in the Danish government’s climate policy. In the energy area, considerations
for greenhouse gas emission reductions are combined with
security of supply issues etc. Integration of climate change
mitigation is also apparent in other policy areas. A considerable number of the mitigation measures included in the
working group’s calculations could satisfy several different
objectives at the same time. Specifically, this means that the
value of the side-effects for some of the initiatives analysed
result in considerable societal advantages. For example, the
calculations show that a number of soil-related initiatives
in agriculture also lead to reductions of nitrogen, making
the initiatives advantageous in a socio-economic context.
If a political decision is made to implement these measures,
the primary considerations will be other than greenhouse
gas mitigation. However, the climate mitigation impacts
from the initiatives will be a benefit and therefore they also
demonstrate integration of climate change mitigation into
other policy areas.
The catalogue of mitigation measures prepared by the
inter-ministerial working group exemplifies a range of possible measures, which can inspire political decisions within
climate policy up to 2020. In order to meet the 40% target by
2020, the Danish government will seek to integrate specific
climate change mitigation concerns in policy discussions
and negotiations in the relevant policy areas such as agriculture, transport, and the environment. Up to 2020, and
on the basis of this Climate Policy Plan and the upcoming
Climate Change Act, the Danish government will work to
integrate the right cost-effective climate change mitigation
measures into decisions on policies in the relevant sectors.
In addition to the principle on integrating climate change
mitigation into other policy areas, there are a number of
other principles for Danish climate policy.
56
Combining an ambitious climate policy
with growth and employment
The catalogue of mitigation measures from the working
group describes a large number of measures to reduce
greenhouse gas emissions. This is not an exhaustive list, but
it is comprehensive, and it contains many different measures and specific instruments which, from a purely technical
perspective, could be brought into use. Many of the specific instruments in the calculations are amendments to
existing taxes and new taxes. There must be room for appropriate reorganisation of taxes and duties, but the Danish
government will not impose new general tax increases on
the business community.
The working group’s catalogue also includes a number of
measures, which are not deemed to be in harmony with
the Danish government’s policy to create jobs and growth.
These include excise duties, withdrawal of transport to work
related tax deductions, etc. However, in order to give a complete picture, these analyses have been prepared in order to
illustrate the full reduction potential.
Other principles in
Danish climate policy
Besides the principles described above, there are a number
of other principles which will apply when the Danish government has to choose initiatives and expand the current calculations in the catalogue. These principles are:
Cost effectiveness
Both achievement of the 40% target and the long-term
transition to a low-emissions society requires significant
reductions in greenhouse gas emissions. In the long term
this will entail a comprehensive reorganisation of society.
Therefore, efforts must be organised cost-effectively, i.e.
with as low socio-economic costs as possible. Determining
the cost-effective options entails calculating the relevant
side-effects and supporting objectives within the environment, agriculture and transport etc.
The Danish Climate Policy Plan
Timing and action under uncertainty
At a given time, the right timing for implementation of a
measure must be weighed against the current knowledge
about costs of reductions, technological possibilities, the
investment horizon for capital stock etc.
Although on the current basis a measure is cost-effective,
expectations of significant technological advances may
mean that implementation should be postponed. On the
other hand, other measures could come into consideration
if implementation is significantly cheaper in connection
with investments in replacement of obsolete capital stock
or in connection with building renovation. Such considerations are particularly relevant for investment-intensive
measures such as changes to buildings, choice of types of
heating, and corporate investment in production equipment.
With this backdrop, it will not be possible and it will not make
sense to organise the climate change mitigation efforts in
detail right up to 2050. Instead, measures should be chosen observing the newest and most up-to-date knowledge
about emissions, new technologies and other possible
measures. This will increase the probability that the overall mitigation efforts will prove to be cost-effective, including in the longer term. An ongoing overview of possible
measures is therefore necessary, so that the probability
that objectives can be met is rendered a reasonable degree
of certainty. Otherwise there will be a risk that towards the
end of the period it may be necessary to implement initiatives, which have a rapid effect but which are less cost-effective than measures with more gradual effects.
Effective and cost-effective mitigation efforts can therefore
not be assessed on the basis of a static perspective. Rather,
they must be perceived as a dynamic planning process to be
implemented under a considerable degree of uncertainty.
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The Danish Climate Policy Plan
Competitiveness
Deciding on cost-effective climate change mitigation measures raises the issue of Danish competitiveness for enterprises exposed to competition and possible relocation of
production. This will mean loss of Danish investment and
jobs. There is also the issue of ”CO2 leakage”, in which greenhouse gas emissions occur abroad instead of in Denmark.
It is important to assess, whether the potential measures
entail moving production and thereby lead to unintentional
corresponding, or even larger, emissions in other countries.
of the pollution, it causes. On the basis of this principle, and
cost effectiveness, there should be endeavours for uniform
pricing of all greenhouse gas emissions in all sectors. Pricing must be adjusted for externalities. A uniform price
signal across all sectors will ensure that the cheapest reductions are implemented first. Furthermore, the price signal
provides an important incentive to develop new emissionslimiting methodologies and products.
Initiatives entailing a risk of CO2 leakage cannot be avoided
entirely. However, the effect on Danish competitiveness
should be included in specific choices between measures,
with particular focus on the impact on enterprises exposed
to competition. Moreover, as mentioned above, the Danish
government is working to establish an international climate agreement, which will attenuate the issue of CO2 leakage.
As mentioned above, the 40% target is a stepping stone
towards a broader green transition and achievement of
the EU’s long-term climate policy target of a 80%-95%
reduction by 2050. Therefore it is crucial that meeting the
40% target supports the long-term structural conversion.
It is also vital that the decisions made up to 2020 are costeffective, point forwards and pave the way for initiating
reductions within all sectors. Of course this should take into
account the technology options available and the possibilities to stimulate technological development within the
individual sectors.
Limited possibility for public financing
Danish climate change mitigation efforts are to be implemented within the framework of a sustainable economic
policy. In the years to come possibilities for public financing
will be extremely limited in light of the need to consolidate
the public budget. The Danish government will examine
and draw up specific proposals to finance the measures to
realise the 40% target for reductions in greenhouse gases.
In this context the Danish government will focus on the
need to finance expected losses in tax revenues as a result of
phasing out coal, oil and gas, reduced energy consumption
etc.
The polluter pays
Reduction efforts must be based on the fundamental principle that the polluter pays. That is: As a general rule the
individual player, citizen or company must pay the costs
Support for a long-term transition
Consumer-related emissions
Targets, efforts and shortfalls are calculated as emissions
emanating from Denmark, i.e. from fuel consumption,
livestock, etc. This means that carbon emissions related to
the production of goods in Denmark that are exported, are
included in the Danish emissions inventory. On the other
hand, Danish imports of goods and services produced
abroad – and which may cause emissions in other countries
– are not included. This method of calculation is in accordance with international guidelines, including that the
individual country is responsible for the production, which
takes place within its borders. The individual consumer can
contribute to reducing climate impacts by making decisions which include the effect on emissions abroad.
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The Danish Climate Policy Plan
8.
The next steps
The publication of this Climate Policy Plan is the first step in
an ongoing, forward moving process which in the years to
come will establish the regulatory and political framework
for meeting the 40% reduction target in 2020.
A central component in the follow-up of this Climate Policy
Plan will be adoption of a Climate Change Act aiming at
ensuring long-term monitoring and follow-up of reduction
efforts across sectors. The Climate Act will secure monitoring of greenhouse gas emissions and regular status reports
on climate change mitigation efforts to create transparency in climate policy. The Danish government will draw
up a draft climate change law for submission in the 2013-14
parliamentary session.
In the years to come a number of political decisions will
be made, which may be significant for reaching the target.
These include political follow-up to the recommendations
from the Nature and Agriculture Commission. Other work
which may also prove to relate to climate change mitigation efforts includes the recommendations from the Transportation Congestion Committee as well as the resources
strategy for waste management and prevention.
In parallel with this, the Danish government will continue
work to implement relevant EU initiatives, which make up
a crucial element in climate mitigation efforts, and which
may help reduce Danish emissions and thereby limit the
need for national mitigation measures.
In addition to work at EU level and state level, the Danish
government will also work to secure better coordination
and a structured interplay between municipal, regional
and government efforts. Regional and municipal climate
change mitigation plans and efforts can often be in their
own interests. But they are also a good and necessary supplement to national efforts in the climate area, if planning
and implementation are to be completed optimally. Therefore the Danish government will endeavour to establish
a good foundation for regional and municipal planning
through analyses, knowledge-sharing and specific tools. In
addition, a process has been initiated to update the municipal CO2 calculator. This in order to offer to municipalities a
tool that can give a correct and fair statement and calculation of their greenhouse gas emissions. I.e. statements and
calculation which ensure that the climate change mitigation measures have contributed to real improvements and
reductions in CO2 emissions. Finally, in collaboration with
various municipalities the Danish government has prepared a catalogue with a number of examples of municipal
efforts related to climate and energy-policy objectives; the
municipal climate change mitigation guide.
Not only the public sector can take action and provide a
good example; Danish consumers also play a crucial role in
both national and international greenhouse gas emissions.
Through their demands and choices, consumers can make
an enormous difference to benefit the climate. Therefore
the Danish government will focus on possible action by
consumers through increased communication and advice
for the public.
The Danish Climate Policy Plan
Towards a low carbon society
2012/2013 : 8
Inquiries concerning the publication can be directed to
The Ministry of Climate, Energy and Building
Stormgade 12, DK-1220 Copenhagen K
Phone: (+45) 33 92 28 00
E-mail: [email protected]
Electronic publication ISBN
978-87-93071-29-2
Web
This publication is available at www.kebmin.dk
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