1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Towards net zero emissions in Denmark

Denmark has been a frontrunner in policies that reduce greenhouse gas emissions and now plans to cut emissions by 70% by 2030 from 1990 levels and to achieve carbon neutrality by 2050. Such ambition induces halving emissions from 2019 levels and making the same emission abatement effort in ten years than the past thirty years. Cutting emissions at such fast pace will be challenging with substantial disruptions and macroeconomic consequences. A balanced mix of pricing policies, public investment, regulation and enabling policies should allow smoothing the potential economic and social shocks and accompanying the reallocation of resources.

This paper investigates further sectoral climate strategies in Denmark. In the energy sector (electricity and district heating), past progress made to ramp up clean technologies provides a good blueprint to achieve further decarbonisation, but the focus will need to be put soon on lowering reliance on woody biomass. In the transport sector, emissions have continued to increase despite the shift to more fuel-efficient vehicles, highlighting the need for more transformative policies to expand alternatives to individual car uses. In agriculture, little has been done so far to cut emissions, especially from livestock. The sector is subject to leakage risks, but nonetheless should be encouraged to transform its practices. Helping farmers to monitor their GHG emissions should be combined with more stringent regulation.

English

Keywords: Agriculture, Climate change mitigation, Energy, Climate strategy, Environmental taxation, Transport, Denmark, Climate change adaptation, Public policy
JEL: Q52: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Pollution Control Adoption and Costs; Distributional Effects; Employment Effects; R48: Urban, Rural, Regional, Real Estate, and Transportation Economics / Transportation Economics / Transportation Economics: Government Pricing and Policy; H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies; Q56: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth; H50: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Related Policies: General; Q43: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy and the Macroeconomy; Q53: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling; Q15: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Agriculture / Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment; Q55: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Technological Innovation; H21: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Efficiency; Optimal Taxation; Q48: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy: Government Policy; Q42: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Alternative Energy Sources; H54: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock; Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming
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