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 expressionâ€¦pay me now or pay me later?