Uproar over new climate strategy -- Denmark bets on CO2 quota trade

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Denmark will no longer rely on wind power or other renewable sources of energy to bring down its carbon dioxide emissions. Instead it will primarily buy-up unused CO2 quotas from countries like Russia and the Ukraine, which because of the ailing state of their heavy industries are not using up all their emissions allowances. The Danish government plans to use the purchased allowances to generate extra power from its coal plant for export to the rest of Scandinavia, currently suffering a power deficit due to water shortages in hydro reservoirs.

The government's strategy is all part of a new climate policy for Denmark. Ironically, it was published by the Conservative government in the same week that Britain announced its new green energy policy -- which includes a major role for wind power to meet its climate change goals. Under the Kyoto climate change agreement, Denmark is committed to reducing its CO2 emissions by 20-25 million tonnes. By the end of this year, wind power will be contributing six million tonnes to this goal, a proportion the present government does not want to increase.

The Danish climate plan fails to outline solutions to bringing down CO2 emissions and breaks with a cross-party agreement from 1990 which gave wind power a leading role in long term environmental policy. From now on, coal power plant may increase their energy and coal consumption -- increasing the actual emissions of CO2 -- as long as they buy an equivalent amount of emissions allowances from abroad.

Criticism of the new "hot air" policy has been fierce and widespread. In response, environment minister Hans Christian Schmidt says it is "time to act." It will cost DKK 4.5 billion (EUR 605.8 million) a year to reduce CO2 emissions at home through a permanent reorganisation of the power supply system, compared with DKK 1-2 billion (EUR 134.6-269.2 million) a year if CO2 quotas can be imported at DKK 40/tonne (EUR 5.4/tonne).

Any future contribution from wind power to reducing CO2 is not part of the government's plan. It argues that the country's coal plant will continue to generate the same amount of power, no matter how much the country's wind plant are also feeding into the system. In other words, the pollution-free production from wind turbines will not reduce CO2 emissions from coal plant, the government points out.

For wind power to give an environmental return, fines for exceeding CO2 emissions allowances must be greater than potential earnings from exporting electricity. During the winter, paying fines and exporting power has been good business for Denmark's coal plant. The government can rule that coal plant are not allowed to continue generating power purely for export in periods when wind power is meeting domestic demand. If that rule were applied, ten of the 25 million tonnes of CO2 emissions Denmark must save to meet its Kyoto commitment would be in the bag.

kyoto protest

Such restrictions are not part of Denmark's climate strategy, which looks forward to a "considerable future export" of electricity from coal-fired plant to Norway and Sweden, in the expectation that power stations overseas will buy the necessary CO2 quotas to cover the extra CO2 emissions. Denmark's wind turbine owners association is among the many politicians and organisations who are protesting Denmark's aim to meet its Kyoto commitments primarily through financial engineering. "It's reminiscent of the church in the 15th century, which sold indulgences to absolve people from sins they had not committed," comments the wind association's Asbjørn Bjerre.

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