Encouraging Environmentally Sustainable Growth In Denmark
Paul O'Brien and Jens Høj, OECD|December 25, 2001
This paper analyses aspects of environmental policy in Denmark, including, among others, policy on surface water quality, clean air and support for renewable energy, waste disposal and transport policy. Environmental policies are an important priority in Denmark, with implementation often highly decentralised, but in some cases environmental objectives have been pursued at what seems a high price, perhaps through a wish to support the development of a domestic industry or to protect existing industry from loss of competitiveness. The paper criticises some of the arguments used in favour of this high cost approach in a number of contexts, including wind power subsidies, the carbon tax and the treatment of nutrient discharges from agriculture. The paper also discusses a number of innovative and efficient policies introduced or planned, for example the new approach to promoting renewable energy (including wind power) through tradable “green certificates” and a CO2 trading scheme in electricity production. In some areas, such as policy for non-hazardous waste, apparent expansion of the role of economic instruments (through a series of differentiated taxes on disposal) seems to be dominated in practice by quantitative targets which may not provide the best outcomes.
This paper analyses aspects of environmental policy in Denmark, including, among others, policy on surface water quality, clean air and support for renewable energy, waste disposal and transport policy. Environmental policies are an important priority in Denmark, with implementation often highly decentralised, but in some cases environmental objectives have been pursued at what seems a high price, perhaps through a wish to support the development of a domestic industry or to protect existing industry from loss of competitiveness. The paper criticises some of the arguments used in favour of this high cost approach in a number of contexts, including wind power subsidies, the carbon tax and the treatment of nutrient discharges from agriculture. The paper also discusses a number of innovative and efficient policies introduced or planned, for example the new approach to promoting renewable energy (including wind power) through tradable “green certificates” and a CO2 trading scheme in electricity production. In some areas, such as policy for non-hazardous waste, apparent expansion of the role of economic instruments (through a series of differentiated taxes on disposal) seems to be dominated in practice by quantitative targets which may not provide the best outcomes.
