Danes Show the Way to Our Energy Future?

DanishEnergy.jpgIn today’s Wall Street Journal, there was an article about Denmark’s road to energy independence.

Denmark began to pursue energy-saving after the Arab Oil Embargo of 1973. The country was heavily dependent on imported oil in the early 1970s. The crisis convinced the country’s leaders that it could no longer rely on foreign oil. The government initiated a number of plans, including developing renewable energy from wind turbines, identifying new sources of oil, and conserving energy. Denmark is now self-sufficient in energy and actually exports oil, gas and electricity.

As a comparison, the U. S. economy requires three times the amount of oil to produce a unit of Gross National Product as required by the economy of Denmark. To put it in other terms, the average Dane uses 6,600 kilowatt hours of electricity annaully compared to 13,300 kilowatt hours for the average American.

The lessons may not be applicable for us, however. Denmark dramatically reduced energy consumption while maintaining solid growth and low unemployment, but it came at the cost of higher taxes and expenses for businesses and consumers.

The population of Denmark, according to the article, “puts a higher priority on things like generous health care, free schools and guaranteed pensions than on profits, low taxes and individualism”. In addition, in an opinion poll by the European Union last year, “more people in Denmark than in any other country said they would be willing to pay higher prices for energy derived from clean sources”.

Danish businesses are less enthusiastic. The energy initiatives have been “good for the country, but not good for companies” says John Tang, a manager at Dalum Papir A/S, a 133-year old paper company. Tang notes that several paper companies went out of business over the past 15 years.

However, Tang believes that the companies that did survive have a competitive advantage over European rivals that are just now starting to become energy efficient.

What’s the expression…pay me now or pay me later?

10 thoughts on “Danes Show the Way to Our Energy Future?”

  1. great post Ross,

    Bill McKibben talks extensively about this in his latest book Deep Economy. McKibben also mentions EU nations spend less on health care per capita than the US and they are healthier. They are also happier.

    EU nations have committed to using 50% less energy while the US plans to use 25% more. Seems were moving in the wrong direction and the economic implications can’t be good.

  2. Economists usually talk about the high initial costs of conversion to renewables (among the topics of discussion for global warming mitigation). They often overlook the bonus for local economies: Think of all the money Minnesotans pay for gas, from oil, and for natural gas, usually from other parts of the world. Think of all we spend on electricity, at least 40% of which comes from coal, from out of state. If we could generate the electricity locally, you’d think there’d be a bonus in it to local economies. (Maybe Bruce Anderson has already calulated such savings).

  3. Great post, Ross. I think that a major commitment to clean energy development has to be part of smart growth in Northfield.

    By the way, I just blogged on a trip to Boulder, CO where they have implemented a carbon tax to pay for an aggressive Climate Action Plan. This is just one of a number of steps being taken in Boulder to guide more sustainable development. In the blog I offered to set up a Planning Commission tour of Boulder as part of the Comp Plan and Land Use Regulation revision process. I really do think it would be beneficial, as they are doing a lot of things right in Boulder (which has grown from a Northfield-sized population of 19,999 in 1950 to about 100,000 today).

    Paul is right that we’re shipping money out of Northfield by the bushel load while importing dirty energy. For electricity alone, Northfielders spent over $20 million last year, essentially all of which left the local economy…

  4. Bruce:

    I’m sure that Alice, Greg, Jim, Joe, Ron, Tracy and I are ready to go…

    …is there a Planning Commission Sustainability Field Trip Grant Fund out there?

    Thanks much,


Leave a Reply