The Danish Model of Low-carbon Cities

Q: According to a survey by a Chinese newspaper last year, among 20 Chinese mayors, about two-thirds, think “the Danish Example” illustrates the best way to pursue low-carbon urban development. Could you briefly describe “the Danish Example” and the experiences Denmark has accumulated in low-carbon urban development?

A: Sure, with pleasure. We have constructed a model where most Danish cities are heated by central heating, which brings the fossil fuel, if you want, away from the individual household and brings it into a central power station, which is then able to produce much cleaner energy. Still, somehow coal fired but also with biomass and we also use the waste. So we have a combination of waste, and heat and power that also brings heating back to the houses. And then when it’s burnt, we have filters, and we have a very efficient process, whereby the emissions that come from this process are also reduced. That combined with general very high rules on energy efficiency in houses has meant that our carbon emissions have stayed at the same level for the past many years, where as our economic growth has continued to go up. And especially in the city of Copenhagen, we’ve had very good results from this.

Q: Can you tell us how can urban residents in Denmark benefit from low-carbon urban development? And how can business and the economy benefit?

A: Well, we think that the fact that we set high standards and have a strong regulatory system also means that businesses pushed to develop new technologies and develop new business models. And through our standard setting, a new sector has been created in the Danish economy that is focused on producing buildings, materials and finding solutions that are also economically viable. And the largest growing sector of Danish exports is actually within green technologies, and efficiencies, and power stations and everything that is connected with green production – especially for the city and urban environment. So it’s a good solution both for the citizens, for the consumers and for the business community. So it’s a win-win situation.

Q: When and how did Denmark decide to develop this kind of economy in an eco-friendly manner?

A: Well, it was actually a decision that was made more out of a distress and because we were forced to – rather than a choice. I think when we look back it was a very fortunate situation we were in. But it was after the oil crisis in late 1970s and early 1980s. Denmark was, at that time, not an oil producing country. So we suffered a lot because oil prices went up and our economy had a really hard time. And because of that, the government introduced very strict rules and regulations, and that forced the industry to develop and that slowly over the years then led to this becoming a major industrial sector and for the benefit, as I said, both for the industry, and for the citizens, and for the city. In a way it seems I’ve only been to China for a few days, but the way your industrial development is growing combined with the climate problems and the pollution problems you have in your cities, it also seems that the Chinese government is trying to set very high standards and thereby in a way also set targets for Chinese industry that will be beneficial for hopefully Chinese citizens, but also for your business environment, I mean, both for the production in China but also for exports. It seems as we are thinking in the same direction

Q: Could you tell us how did Denmark develop its low-carbon approach, especially in the cities? Can you give us some examples?

A: Obviously, in Denmark, we don’t have very large companies. We have a lot of small companies, so one element is that we have brought all the various stake holders to one table and ask them to find solutions together. Whether it’s the power companies, or the ones that producing the pipes, or the ones producing the furnaces, or the various electronic components that go in, they have been asked to cooperate on this. And through this process, in a way, we have enabled a lot of different companies to develop the skills that we needed to go in this direction. And, as I said, it started in early 1980s, so it’s also taken for a few years to actually build up the competences and focus of all the different participants. Now it’s a very thriving sector.

Q: Except for setting the high standards, what did the government do to encourage the citizens and the companies to participate in the development of low-carbon economy?

A: Another component in the package has been our tax structure and the incentives that have been given by the government for developing these technologies and these competences. It’s clear that for any government, you also need revenue, and one major source of revenue in Denmark is revenue on oil and on coal. I assume in China there’s also major revenue for the government from those sources. So when you transform your revenue base, you still have to make sure that the way you get revenue on energy is solid and then predictable. So that has been one other component. And also by having very clear long-term targets that the industry has been able to adapt to…And in fact we are just in the process now of developing new targets. In China you have your five-year plans, and in Denmark we will very soon have a little bit longer plan. The government is about to adopt a plan taking us to 2050 with the aim of becoming free of fossil fuels by 2050, so eliminating totally fossil fuels from our energy that makes an old country. And there, for example, renewable energy, wind energy will play a major part, bio, mass and bio energy will be another component and finally we also again rely on electric cars and electric buses to get away from emissions from the transportation sector. So it will be a very ambitious plan, but we will work towards achieving that.

Q: What difficulties and challenges did Denmark meet in low-carbon urban development?

A: As you can imagine, setting ambitious targets is one thing, but then actually bringing the various actors to the table and getting them to develop the right solutions, especially when it comes to the emissions from power plans, which have to install, gets very technical, special filters and so on. That is a constant challenge because it also has to do with a cost-related to investing in these technologies. So the mix of cost and incentives is always very sensitive for both the producer and the consumer.

Q: China has committed itself to reducing energy consumption per unit of GDP by 40 to 50 percent by 2020 and the Chinese central government is also working very hard to include low-carbon plans in the 12th Five-Year Plan (2011-2015), which shows China’s determination to develop low-carbon economy. So do you think what can China learn from “the Danish Example”? Do you have any low-carbon technology ideas you’d like to introduce to China?

A: Well, I think my talks today with Chinese officials have shown that China really is very capable itself of developing the thinking and setting its targets. We have a long traditional already for cooperation with China on these issues, and a number of Chinese-Danish corporations with businesses, and scientists and universities is already ongoing. So I would just urge China to continue on the path that is already set and keep up the good work. It’s very encouraging what China is setting up to do. And especially also in the field of renewable energy – the way that China has also willing to invest, and wind power and solar power and hydro power is really a very good example that China is setting also for other developing countries. So it’s very good.

Q: What do you think is China’s biggest challenge in building low-carbon cities?

A: Well, as I also mentioned with Denmark: One thing is setting the target, another thing is the implementation. It’s actually getting the work done and to get all the actors that have to realize that they are doing this not only for some far way political goal, but they are actually doing it because it’s in their own interests of doing so. I think, if I see it from the Danish perspective, one big challenge is the sector of transportation, and it is really to bring down the emissions from cars and buses – that’s one. And the other that China seems to be working on but a lot can be done is energy efficiency in buildings. Buildings, according to all calculations that have done by international agencies, can be up to 50 percent more efficient in terms of the energy that they use, the heat they let out, or the cool they let out. And therefore, if you set good standards for buildings, you can actually save a lot of money by just making sure that they are constructed in a way that saves energy. And I think China is able to move very far, especially in the urban setting.

Q: China has also made significant investments in renewable energy. What suggestion and experiences can Denmark provide in developing renewable energy?

A: I think the focus that China has already on wind power and solar power is very good, and I think while the rest of the world is also looking to China, because China, because of its size and the scale can also bring down the cost of producing wind mills and solar panels. I think that’s the biggest challenge that we have globally right now, is that the cost of producing wind energy is still much higher than the cost of producing energy through coal. And the cost of wind energy has to be reduced for it to be good business for consumers and energy consumers, so I think the scale of investment that is now taking place in China is very encouraging.

Q: How can China and Denmark cooperate in low-carbon urban development?

A: I think we can develop more concepts; we can develop more energy efficient buildings; we can look at how to find solutions that will enable electric cars and the urban environment. There are still many questions as how to do it, how to have electric grade, how to make sure that cars are loaded with electricity when the electricity demand otherwise is low. There’s a lot of also computer software that goes into that, and there are many technical solutions that have to be found. So I think also the testing of, say, electric cars or buses in China and in Denmark in different types of settings is a very good example of cooperation that can lead to good results.

Q: This time, what do you want to accomplish on your visit to China?

A: Well, I’ve come in order to learn more about what China is doing but also to talk to Chinese businesses – some of the leaders in the green sector and Chinese government – about an initiative that the Danish government is launching on green growth, because we think that we have to collect, if you want good examples from all over the world, to show how green investments can lead to job creations and production that is still low-carbon in an urban environment and for the benefit of citizens and businesses alike. And we think there are some very good cases and lessons to be learned in China that we would like to include in this initiative. So I had very good talks, and it’s been very encouraging.

Q: How can the Global Green Growth initiative help China and other countries promote a low-carbon economy?

A: We think that if we bring together businesses that are committed to the green growth and get them to talk to each other – businesses from around the world –and then talk to also regulators and policy makers, we will be able to understand better what kind of environment is conducive to getting the right investments and the right solutions. Because right now there seem to be a lot of barriers that are different in nature in each country but that still favor energy solutions based on fossil fuels rather than, for example, renewables – and that goes for both developed and developing countries. And we want to engage both businesses and governments in finding solutions that can bypass these barriers. That’s the point.


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