The Commission’s terms of reference ” The Danish Commission on Climate Change Policy is to examine how Denmark can reduce and ultimately eliminate dependency on fossil fuels in the long term. The Climate Commission shall describe how to implement this long-term vision.” The Climate Commission’s deliberations should take the following criteria into consideration: 1. Reducing the emission of greenhouse gases 2. Increasing energy efficiency 3. Maintaining the high security of energy supply 4. Ensuring macroeconomic cost-effectiveness by using market-based solutions 5. Continuing a high level of economic growth 6. Ensuring positive business development and promoting international competitiveness of business in Denmark 7. Ensuring environmentally sustainable development. Composition of the Commission • • • • • • • • • • Katherine Richardson (chairperson), Professor and Vice-Dean at the University of Copenhagen Dorthe Dahl-Jensen, Professor at the University of Copenhagen Jørgen Elmeskov, Director of the Policy Studies Branch of the OECD Economics Department Cathrine Hagem, Senior Researcher with Statistics Norway Jørgen Henningsen, Previously Director in the European Commission John A. Korstgård, Professor and Head of Department at Aarhus University Niels Buus Kristensen, Head of Department for DTU Transport at the Technical University of Denmark Poul Erik Morthorst, Research Specialist at Risø DTU, the National Laboratory for Sustainable Energy at the Technical University of Denmark Jørgen E. Olesen, Research Professor at University of Aarhus Mette Wier, Executive Director of AKF, Danish Institute of Governmental Research 21 meetings. Scientific analyses. Documentation can be found on: www.klimakommissionen.dk mb/d Challenge: Great pressure on ressources of oil and natural gas 120 Natural gas liquids Non-conventional oil 100 80 Crude oil - yet to be developed (inc. EOR) or found 60 Crude oil - currently producing fields 40 20 0 1990 2000 2010 2020 2030 Half of the world’s demand for oil in 2030 is yet to be developed or found. • Rising prices • Great uncertainty • Oil and natural gas limited to few sources Challenge: Fossil fuels make up the bulk of carbon emissions. An effort is necessary here in order to achieve the goal Current emissions 70,00 50,00 40,00 30,00 EU target Fossil fuels GHG-emissions, Mio. t/y 60,00 Emissions from fossil fuels in the energy sector Other emissions 20,00 80 % reduction 10,00 0,00 2008 80% reduction TWO GOALS FOR THE COMMISSION Independence from oil, coal and natural gas Ambitious climate goal Renewable energy can cover Denmark’s energy needs. Derived from EU’s target of 80-95 % reduction of emissions by 2050 THE COMMISSION’S PRINCIPLES Economic growth will continue ”Denmark is not an island” Independence should be obtained with the lowest possible societal cost There are no chosen technologies. ”Market choice rather than command and control” Biomass gives opportunities and challenges The Commission’s Results • Denmark can become independent of fossil fuels by 2050. • Even as our energy demand doubles. • The technology is available today, but more will become available. • Small additional cost as continued dependence on fossil fuels will become an expensive habit. Our energy needs will rise, but there are ample renewable ressources 300 Pct. of total energy needs covered in 2050 Wind can cover energy needs 2 ½ times. 250 200 150 100 50 0 Total energy need Potential wind power Potential solar power Potential from biomass and waste STRATEGY WITH TWO ELEMENTS 1. We need to use energy more effectively. Technological solutions and investments have a large potential More effective energy use by 2050 relative to today 120 100 80 60 40 20 0 Heating Appliances Transport Industry and agriculture We can halve the amount of energy that we use on household appliances relative to today STRATEGY WITH TWO ELEMENTS 2. The energy of the future will come from renewable sources THE ENERGY SYSTEM OF THE FUTURE The remaining emissions derive primarily from the agricultural sector THE COMMISSION’S 40 RECOMMENDATIONS GENERAL • That a new tax be introduced on fossil fuels, which will ensure that market mechanisms become the drivers of change. A clear message on the gradual, projected increase of the tax provides a secure environment for investment decisions • Funding for research and development to be maintained at current years level. With stable funding over 5-10 yr. intervals. THE COMMISSION’S 40 RECOMMENDATIONS ENERGY EFFICIENCY • A new ”energy savings account” introduced for all buildings. The account is linked to the individual building. The lower the building’s energy efficiency the higher will be its required saving. The savings are available for projects, which improve the building’s energy efficiency. • Higher incentives for the use of heat pumps. • No new oil heaters after 2015. THE COMMISSION’S 40 RECOMMENDATIONS TRANSPORT • Duty reductions on electric cars extended after 2015 until a critical mass of 100,000 cars is reached. Duty reductions to encompass plug-in hybrids. • A single plan for an infrastructure to allow charging of electric cars. • Demonstration of the use of biogas in heavy load transport THE COMMISSION’S 40 RECOMMENDATIONS THE TOTAL ENERGY SYSTEM • A complete plan for an intelligent electrical grid in Danmark (smartgrid) • Extension of offshore wind turbine capacity with 200 MW/yr. from 2015 to 2025. THE COMMISSION’S 40 RECOMMENDATIONS OTHER • Strengthened international effort for continued energy efficiency improvements. • Effort in relation to other sources of greenhouse gases (primarily from agriculture) • A statutory framework for the vision of Denmark becoming independent of fossil fuels complemented with regular reviews of progress towards the ultimate goal. The extra price tag for independence is small 250 GNP in 2050 – with and without fossil fuels (index 2008=100) 200 2050 without fossil fuels 150 100 50 0 2008 2050 with fossil fuels Consumers will pay about the same Difference in price of electricity with and without wind power (Dkr. per. kWh in 2050) Despite our energy needs doubling by 2050 the total cost for heating, transport and energy will remain the same as today. 3 2 1 Primarily due to gains from energy efficiency. 0 Consumer price with wind power Consumer price without wind power Conversion can create growth • Denmark is in a position of strength within the fields of green energy and energy efficiency. But the world is on the move. • Rising investment can increase growth. • Enery costs make up on average 4 pct. of the cost of doing business in Denmark (more for some companies) • Total energy costs are expected to fall as a share of the total costs of doing business by 2050 THE ROAD TO INDEPENDENCE MUST START NOW • The conversion represents a revolution of our energy system. • It takes time to reshape our energy system. • If we wait the cost may well rise.