Jeff Rubin has an interesting piece on the Globe and Mail website about Denmark’s greenhouse gas emissions and energy prices. Famously, Denmark gets about 20% of its electricity from wind power. Less famously, the remainder comes from coal. Rubin explains that: “coalâ€™s share of power generation in Denmarkâ€™s power grid is basically the same as it is in China”.
Why, then, have Denmark’s greenhouse gas (GHG) emissions actually fallen during the last two decades, while those in North America have risen by about 30%?
The answer lies not with the source of power, but with the price of power. At 30 cents per kilowatt hour, electricity costs anywhere from three to five times what the average North American would pay. And, not surprisingly, Danish households consume a fraction of the power that we do.
Certainly, conservation is an important part of dealing with climate change, and price signals are one way to encourage it. Danish cars are also heavily taxed: an extra 100 to 180% of the sticker price, depending on horsepower.
In addition to the high price of power, I suspect that at least some of Denmark’s success in reducing GHG emissions is the result of exporting pollution-intensive industries to places with less regulation. Almost certainly, Denmark imports at least some emissions intensive products, like Chinese steel. In the long run, preventing domestic production from being displaced by imports from countries with few climate regulations is an important part of effective climate change policy-making. One key instrument for achieving that could be carbon tariffs. That said, China is actually doing more than most people think when it comes to fighting climate change.