GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 4concept became a central theme of his successful 2005and 2007 re-election campaigns (Andersen 2008:19).Part of understanding the sudden shift in policy isalso to understand the very coalitional nature of the Danishmulti-party system of politics. In a parliament wheregovernments have historically depended on centre partiesfor parliamentary backing, the 2001 election markedthe first time since 1929 that parties right of the middleheld a majority in the parliament on their own (Bille2002). In other words, the government did not dependon a centre party for parliamentary majority, which likelywould have limited the subsequent deregulation and liberalizationdrive.The following five years thus marked a period of Danishenergy policy in which the political objective of liberalizationwas the main driver of policy. The change cameabout as a result of EU pressure that began the process ofderegulating energy markets in the late 1990s, but withthe election of 2001 the process received strong backingfrom the Danish parliament and government as well. Theprimary goal of energy policy was still to ensure stableeconomic growth, but in the eyes of the new government,liberalization of energy markets was crucial to ensuringthis. (Mendonca, Lacey, and Hvelplund, 2009; Karnøe &Buchhorn, 2008; Jakobsen, 2010; Nørgaard and Tornbjerg2002).The following five years thus marked a period of Danishenergy policy in which the political objective of liberalizationwas the main driver of policy.Despite the significant change in policies away fromalternative energy support and environmental prioritiesduring this period, the foundation for another criticalchange in policy had been laid. The changes to the energymix and the investment in industry and infrastructurehad created a context in which the goal of the fossil-freeeconomy could emerge.Energy consumption, GDP, and energy intensityIndex 1980=1001801601401201008060401980 '85 '90 '95 '00 '05GDPGDP, adjustedEnergy intensity, energy consumption / GDPFigure 8: While GDP has grown substantially, the energyintensity of the Danish economy, i.e. energy used per unit ofGDP, has decreased since 1980.Source: DEA 20093.2 Summary – results of the first three phases of Danishgreen growth“Green growth” was never an explicit goal of Danish energypolicy during these first three parts of the story, butthe combination of policy tools used to achieve the primaryobjectives of supply security and economic growthhad the derivative effect of decoupling emissions andeconomic growth (Danish Government 1996; Grohnheit2001). Thus, although emissions reductions did not attractsubstantial focus as a political objective until the1990s, the decoupling of growth and emissions began inthe 1970s. In the clarity of hindsight we can thus describethese first three phases as a form of green growth compatiblewith emissions reductions. (See Figure 8 below for anillustration of this decoupling.)“Green growth” was never an explicit goal of Danishenergy policy during these first three parts of the story,but the combination of policy tools used to achieve theprimary objectives of supply security and economicgrowth had the derivative effect of decoupling emissionsand economic growth4 Green growth part IV: the fossil freeeconomy8 (2006 – 2050)In 2006, a combination of international developmentsand the policies pursued during the first phases of greengrowth had created the industry, infrastructure, energymix and global market conditions that enabled Denmarkto commit to pursuing the goal of a fossil-free economy.This commitment occurred in spite of the fact that Denmarkwas still governed by the conservative administrationthat had initially slashed green policy support. Howdid this reorientation occur?4.1 The politics of reorientationThe change can be traced to back to September 2006,when Fogh reversed the previous five years of liberalizingenergy policy priorities by announcing the goal of afossil-free society. (Vestergaard 2006)Understanding how this policy shift came aboutmeans understanding the political climate and emergingindustrial structure of 2006. We divide this story intotwo sets of factors: first, a set of specific, circumstantialpolitical events and conditions that impacted Fogh’s decision-makingat the time. Second, the playing out of theon-going structural reorientation of the domestic and internationalmarket that began in the first three periods ofDanish green growth.4.1.1 Circumstantial political factorsDuring the government’s attempt to liberalize energymarkets it sought to adhere to environmental obligationsvia the EU Emissions Trading Scheme and joint implementationprojects under the Kyoto Protocol. Meilstrup(2010), based on interviews with ministers and high level8 This part of the story is stillbeing written, and for obvious reasonstelling it is associated with acertain amount of uncertainty. Itshould be noted that the strategiesdescribed in this section are justthat – strategies. How they will actuallyplay out remains to be seen.There are however, clear signs ofa shift in direction of policies andindustry onto a new and more‘green’ path.38