DANISH POLICY ON LESS GREENHOUSE GAS-EMITTING ENERGY

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1 DANISH POLICY ON LESS GREENHOUSE GAS-EMITTING ENERGY UNFCCC workshop on Cleaner or Less Greenhouse Gas-Emitting Energy Whistler, Canada May 7-8, 2002 Lene Nielsen, Ministry og Economic and Business Affairs Danish Energy Authority 44 Amaliegade, DK Copenhagen K ln@ens.dk

2 The Danish Ministry of Economic and Business Affairs Minister of Economy and Business Affairs Statistics Denmark Corporate Management Danish Building and Urban Research Danish Financial Supervisory Authority Consumer Agency Department of The Ministry of Economic and Business Affairs Danish Energy Authority Danish Patent and Trademark Office Danish Competition Agency Danish Commerce and Companies Agency Business and Housing Agency Danish Maritime Authority

3 GDP and Total Final Energy Consumption Index 2000=100 Climate Adjusted '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 GDP in Constant Prices Final Energy Consumption

4 GDP, CO 2 and Gross Energy Consumption Index 1988= '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 GDP, Prices CO2-emissions, Adjusted Gross Energy Consumption, Adjusted

5 CHALLENGE: To optimise the implementation of the best mix measures for less CO2 emissions from the energy sector Objectives: The Danish CO2-Kyoto obligations shall be fulfilled Measures shall be market based No negative implications on the competitiveness of Danish trade and industry Environmental value for money The security of supply must be safeguarded The policy includes: Domestic demand side measures Supply side measures (no nuclear) Kyoto mechanisms Common and co-ordinated policies and measures -CCPM's (EU / international

6 DANISH DSM ACTIVITIES Primary energy consumption has been almost stable since 1972 Energy consumption per m 2 has been reduced with 40% The main measures are: Information / campaigns Subsidy schemes Labelling (EU) Building-labelling (from 1997) Building codes Systematic energy management in public buildings Electricity saving Fund (from1997), subsisies and campaignes (procurement) Energy saving Act Energy auditing schemes in trade and industry Green taxes (since 1996) in trade and industry to be reimburced to the sectors through EE measures or specific projects Several R&D-programmes to support of new and more EE technology

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8 PJ Gross Energy Consumption by Fuel Adjusted 1980 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 Oil Natural Gas Coal and Coke Renewable Energy etc.

9 Mechanisms are getting in place: Emissions trading CO2 cap & trade Act (only electricity sector) Into force July 2000 to be renegotiated after 2003 Total cap mill. tonnes of CO2 for Penalty tax: app 5 USD per tonne of excess CO2 emissions JI & CDM High priority in Danish energy policy when it is the most cost efficient solution Possible models for implementation are being mapped Manual for Project Developers : Manual for JI and CDM Projects Objective of the manual: to outline the process by which JI and CDM projects can be developed and registered with the Danish government Baltic Region (BASREC) : Regional Handbook on Procedures for JI in the Baltic Sea Region (Denmark, Estonia, Germany, Iceland, Latvia, Lithuania, Norway, Poland, Russia, Sweden).

10 COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, European Climate Change Programme - ECCP Promoting Effective Implementation of the Integrated Pollution Prevention and Control Directive Proposal for a Directive on Linking Project-based Mechanisms including JI and CDM to EC Emissions trading scheme Proposal for a Review of the Monitoring Mechanism Proposal for a Framework Directive for Minimum Efficiency Requirements for End-Use Equipment Proposal for a Directive on Energy Demand Management Proposal for a Directive for the promotion of Combined Heat and Power Initiatives on increased energy-efficient public procurement Public Awareness Campaign and Campaign for Take-off Proposal for shifting the balance between modes of transport Proposal for improvements in infrastructure use and charging Promotion of the use of biofuels for transport Proposal for a Framework Directive on Fluorinated Gases

11 Policies and Measures in the UNFCCC Climate negotiation process Decided in Marrakesh, COP 7: Exchange information on Good Practices Facilitate cooperation Improved transparancy Report on demonstrable progress by 2005 Report in 3 rd national communications Decide further action ----mechanism s shall be supplemental to domestic action and domestic action shall constitute a significant element of the effort by each Annex I Party to meet its quantified emission limitation.

12 International co-operation on Energy Efficiency Nordic countries The Baltic Sea EU IEA 5 countries 9 countries 15 countries + 10 associated Central and Eastern European countries 26 OECD Countries Energy Charter Treaty 51 signatories - 45 ratified UN/ECE UNFCCC 55 member states 186 countries ratified

13 DSM Energy planning (Increasing complexity) SUPPLY MANY ACTORS PRIVATE / PUBLIC CCPM LIBERALISATION INT. COMMITTMENTS CDM EMISSIONS TRADING JI RESULTS: GHG- REDUC. COSTS SIDE EFFECTS LEGISLA- TIONS REFORMS SECURITY OF SUPPLY COMPET- TETIVE- NESS

14 CO 2 - Emissions by Final Energy Consumption Million tons CO 2 Adjusted '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 Refining, Supply etc. Agriculture and Industry Households Transport Service Sector

15 CO 2 - Emissions by Fuels Adjusted Million tons CO Oil Natural Gas Coal

16 Example of indicator decomposition: Trend Determinants in in Energy Consumption for for Passenger Transport % Actual Actual Change Change Activity Activity Effect Effect Structure Structure Effect Effect Intensity Intensity Effect Effect

17 Danish Emissions of Greenhouse Gases Mill t CO 2 -Equivalent 100 actual forecast '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 6 Greenhouse Gases without CO2 - quotas 6 Greenhouse Gases with CO2 - quotas Kyoto-Target

18 CHANGES IN CARBON EMISSIONS COMPONENT BY COMPONENT (source: Lee Schipper, IEA) Average Annual Rate of Change (% per year) 0,03 0,025 0,02 0,015 0,01 0, ,005-0,01-0,015 Actual Emissions Energy Services Utility Fuel Mix Energy Intensity Final Fuel Mix -0,02 Denmark W. Germany UK USA Japan Australia

19 Key messages: the measures includes: Domestic Demand Side Measures (do not unterestimate) Supply side measures (renewables are important) Mechanisms Common and co-ordinated policies and measures. International co-ordination ( increasing activity) Planning cleaner energy: More and more elements must be integrated into the planning process (supply, demand, liberalised market, international commitments, mechanisms, more and more actors nat. & int.) Need for planning tools for identifying the best mix The indicator tool is usefull for planning on cleaner energy