Terms of reference of the commission

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2 Terms of reference of the commission 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.

3 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:

4 Challenge 1: Economic Vulnerability: pressure on ressources of oil and gas mb/d Natural gas liquids Non-conventional oil Crude oil -yet to be developed (inc. EOR) or found Crude oil -currently producing fields 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 resources located in few regions

5 Challenge2: Fossil fuelsmakeup the bulk of carbonemissions. Effortis necessaryin thisareain orderto achieveclimategoals 70,00 Current emissions 60,00 CO2-udledninger 50,00 40,00 30,00 20,00 10,00 Fossil fuels EU Målsætning Drivhusgasser fra fossil energi Øvrige drivhusgasser 80 % reduction 0, % reduktion

6 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 % reduction of emissions by 2050

7 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

8 Results of the Commission on Climate Change Policy Denmark can become independent of fossil fuels by 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.

9 STRATEGY WITH TWO ELEMENTS 2. The energy of the future will come from renewable sources

10 HOW TO GET THERE -THE COMMISSION S 40 RECOMMENDATIONS GENERAL Thata new taxbeintroducedonfossil fuels, whichwillensure thatmarketmechanismsbecomethe drivers of change. A clear message on the gradual, projected increase of the tax providesa secureenvironmentfor investmentdecisions Fundingfor research and developmentto bemaintainedat current years level. With stable funding over 5-10 yr. intervals.

11 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.

12 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.

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