Chapter Three national climate change issues
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INTRODUCTION
3.1 Chapter Three details information on climate issues from the study countries. For each country this comprises a brief overview of the work on climate impacts followed by a review of issues relating to the mitigation of greenhouse gas emissions in five key socio-economic sectors. The information provided in Chapter Three is integrated into a regional comparison of climate issues in Chapter Four. The Scottish implications from this regional comparison are described in Chapter Five.
3.2 The overview of climate impacts considers the expected changes in temperature, precipitation and sea level and describes the existing research into climate impacts.
3.3 The review of issues relating to the mitigation of greenhouse gas emissions considers five socio-economic sectors: Energy; Transport; Business; Domestic; and Agriculture, Forestry and Fishing. Each national energy sector is characterised in terms of the available and indigenous reserves of energy, the end use of that energy and the policy context in which decisions are being made. The business sections discuss the main climate issues affecting the industrial and commercial environment within each country. These issues concern the financial instruments associated with minimising emissions from energy use and policies tackling waste. Clearly, there is some overlap in waste strategy between the business and domestic sectors. The review of mitigation issues for transport includes the policy instruments implemented in the different countries to reduce emissions from vehicles and the schemes, usually at municipal level, to reduce private vehicle use and enhance public transport. The domestic sections focus on the policy instruments used to improve energy efficiency.
Figure 3.1 The study area (shaded)
DENMARK
Introduction
3.4 Information in this section is drawn from the recently published Danish climate strategy (Denmark's Ministry of Energy and Environment, 2000), along with information from the Second National Communication to the UNFCCC (Denmark's Ministry of Energy and Environment, 1997) and its associated review (UNFCCC, 1999a). We also draw sectoral information from the comprehensive 'Energy 21' policy document update and the 'Transport Action Plan 2005'.
Figure 3.2 Outline map of Denmark (shaded)
Climate Impacts and Adaptation
Denmark
3.5 The annual mean temperature in Denmark is predicted to increase by almost 2 °C by 2050. Precipitation is expected to increase in winter and decrease in summer. A sea level rise of 9-18 cm is predicted, with the largest rise in the southern part of the country.
3.6 A wide range of research has been conducted to investigate climate change impacts on: human health; energy; industry; transport; water resources; agriculture; forestry; terrestrial, freshwater and marine ecosystems; coastal areas; and possibilities for adaptation in Denmark, Greenland and the Faeroe Islands. No serious direct impacts are expected in Denmark, except for a few sectors, such as agriculture, forestry and coastal zones.
3.7 The main concern relates to sea-level rise and problems connected with land movement and erosion, as Denmark has 7,300 km of coastline, mainly made of "soft" sedimentary materials, easily eroded by wave action. About 500 km of the coastline is bounded by dykes, which protect human settlements, farmland, marshland and areas reclaimed by drainage. Coastal retreat can however be effectively counteracted (at some cost) by artificial coastal replenishment and the rate of sea level change is slow enough to allow upgrading of dykes.
3.8 Agriculture may benefit from increased yields of some crops, though the increased incidence of pests may conflict with current measures to reduce pesticide usage.
3.9 Forestry is characterised by very long production times, with rotations lasting from 50 to 180 years: trees currently being planted must be suited to the climate at the end of the next century. Given the uncertainty in long-term climate predictions, the chosen strategy is to manage for increased diversity and stability in order to promote the resistance and resilience and hence adaptability of forest ecosystems. Native broad-leaved, species are preferred. Norway spruce, the commonest tree species in Denmark, already appears to be threatened by milder winters.
3.10 In 1998, Denmark was considering the following adaptation measures: coastal protection; change of agricultural crops; and replacement of Norway spruce plantations with more stable mixed forest of oak and beech. Existing programmes are implementing coastal zone management in the form of dyke maintenance.
Greenland
3.11 A 1.8-3.6 °C increase in the mean annual temperature of Greenland is predicted for 2100. Although predictions of the response of the ice cap that occupies 78% of Greenland are inherently uncertain, there will be probably a net increase in melt rate. Precipitation is predicted to increase by 2-24 mm per month. Other consequences of climate change will include: lengthening of the snow-free period by a month or more, an 1-2 week increase in the length of the growing season, deepening of the active soil layer, and a shorter northward movement of the permafrost boundary. The main concern centres on Greenland's fragile arctic ecosystems, though long-term predictions of impacts are uncertain.
3.12 There is considerable uncertainty over the predictions for the populated areas of Southern Greenland, which has experienced a cooling of 1-1.6 °C in the past 60 years. Ocean models predict a cooling SW of Greenland, related to the 80% decrease in deep water formation observed in the Greenland Sea during the 1980s, reducing the amount of warm Atlantic water flowing north. This cooling may counteract or even neutralise greenhouse warming in Southern Greenland.
Faeroe Islands
3.13 Warming trends will be moderated by the cooling effect of the reduced North Atlantic drift, resulting in a predicted mean air temperature increase of 1-2 °C by 2100. Only minor changes in terrestrial ecosystems are expected. At sea, temperature may decrease and cause detrimental changes in edible fish stocks.
Mitigation of Greenhouse Gas Emissions
3.14 Danish climate mitigation policy has made extensive use of economic instruments within different economic sectors to attain its overarching objective of sustainable development. The remarkable success of the policies in reducing energy intensity - de-coupling energy use from economic growth - is evidence of an effective climate policy. This has been accomplished by improving energy efficiency aggressively at all levels in the chain from energy production to final use.
3.15 The recently published climate policy seeks to integrate the work of individual sectors, which themselves have bold targets for reducing greenhouse gas emissions, for the period leading up to 2012 and further analyses of developments to 2030. A combined energy/carbon dioxide tax continues to play a key role in climate policy. In addition, Denmark relies on a range of regulatory and voluntary measures geared to improving their energy efficiency. These measures are compared with the approaches of the other study countries in Chapter Four.
Energy
3.16 Oil, coal, natural gas and renewables supply the energy in Denmark. The use of natural gas and renewables has been rising in recent years at the expense of coal. Indigenous energy reserves include oil and gas, which are expected to cover domestic demand for the next 10-15 and 15-20 years respectively, if the Danish export of natural gas remains at the 1998-level, but all coal is imported. Denmark has few hydroelectricity resources so most renewables consist of biofuels (particularly waste, straw and wood residuals) and wind, along with smaller development of geothermal, solar and wave power.
3.17 Imported coal, used in power stations, has replaced oil in recent decades but no future coal power stations will be built. Natural gas provides domestic heating as well as the energy for the power sector. Renewables are increasingly used and in 1998 accounted for about 9% of total energy supply. Biogas and wind energy are growth areas but in 1998 78% of the energy supply from renewables was provided by municipal waste, wood residuals and straw.
3.18 District heating is common in Denmark and provides a flexible means of fuel switching towards natural gas and renewables from coal and oil. District heating production accounts for almost 50% of space heating. In 1998, combined heat and power plants provided 80% of district heating, with high associated thermal efficiencies. In the same year, 63% of electricity was produced in combination with heat (CHP production), 30% was produced as condensing production (without utilisation of the heat generated by the process) and 7% from wind power. If the production used for export is excluded, the proportion of electricity produced by CHP and wind is larger.
3.19 Denmark's economy has an extensive public sector and an industrial sector dominated by light industry and food product manufacture. A relatively large share of energy consumption goes to space heating and services and a relatively small share to industry. Energy intensity has decreased markedly in recent years as Denmark's successful energy policy has de-coupled energy use from economic activity.
3.20 The primary policy instruments comprise taxation and, more recently, liberalisation of the electricity and gas markets to competition. Taxation of electricity has focused on consumption, with little distinction between high-carbon and low-carbon sources. In contrast, space heat production is subject to energy and carbon taxation. Subsidies still play a central role in the development of decentralised CHP plants producing electricity from natural gas or renewables and from wind and biomass. The forthcoming 'green' electricity reform, to be implemented in 2001, will revise the entire subsidy system in the electricity market.
3.21 Market liberalisation is expected to have a considerable impact on the state of taxation and subsidy. Investment subsidies are likely to continue to play a key role in achieving the goal of 1% annual growth in renewables (UNFCCC, 1999a). However, the UNFCCC team was advised that the correct level of subsidy was difficult to assess. Wind energy may have been over-subsidised and biomass under-subsidised in recent years.
3.22 The focus of policy instruments has changed from one of security of supply, minimisation of cost and the local environment to broader environmental considerations of sustainable development. These policies have led to the installation of natural gas infrastructure, a move from oil for heating to use of natural gas and more local resources in district heating, and expansion of the CHP, an effective energy savings programme, tight building regulations and development of energy technology.
Transport
3.23 Transport policy is based on Government Transport Action Plans. The existing plan, Transport 2005, aimed to stabilise emissions from the transport sector by 2005 at the 1988 level. This appears unlikely to be achieved, in part because expected measures at EC level have not come to fruition.
3.24 In common with other countries, energy consumption in the transport sector has increased, growing from approximately 15% to well over 20% of total energy consumption between 1980 and 1995. Individual passenger transport has increased by 85% between 1970 and 1995. Goods transport over the same time has increased by 40% (Denmark's Ministry of Energy & Environment, 1997). There has been a shift in fuel use from petrol to diesel.
3.25 Annual vehicle taxation was changed in 1997 to reflect fuel consumption rather than vehicle weight and the level of benzene content, while incentives were introduced to enable commercial vehicles to meet the proposed EC standards. It is believed that further fuel taxation will lead to an improvement in car fuel economy but the UNFCCC review team were advised that without support from neighbouring countries such measures would not be very effective. Implementing stricter measures may prove difficult because of the long time required for car stock replacement and the need for co-ordinated international measures.
3.26 Traffic expansion has offset improvements in fuel efficiency so the sector has increasing emissions. Several large infrastructure projects to improve public transport are being built or are planned. These focus on the Copenhagen area and on inter-city transport.
Business
3.27 Denmark's business is dominated by the service industry, which is affected primarily by climate change issues through taxation on energy use and waste. In Denmark, these include an energy tax, a carbon dioxide tax, Value Added Tax, a sulphate tax and a tax to fund the energy savings trust. The result is a very high electricity price, one of the highest in Europe, which has encouraged a shift away from the use of electricity for space and water heating.
3.28 Denmark has predominantly light industry, which is also subject to the combined energy and carbon tax. However, various tax exemptions and/or reductions are provided for intensive users. Revenue from the energy/carbon tax is fully recycled within the commercial and industrial sectors.
3.29 Since 2000, enterprises must have an energy management system, which covers the whole of their energy use and follows guidelines from the Danish Energy Agency. Special investigations are held into the energy used in the main business process. If, during this special investigation, the enterprise finds energy saving projects with a payback of less than 4 years, the enterprise must implement these.
3.30 The main policy instrument to reduce waste and waste-related emissions was the 1993 Action Plan on waste. In 1996, 60% of waste was re-cycled, the 20% consisting of inorganic waste was landfilled and 18% was incinerated in plants with energy recovery. The UNFCCC review team commented on the success of the Danish strategy for dealing with waste. Since 1997, depositing biodegradable waste in landfill has been prohibited. Methane emissions are expected to decrease as a result and because of the increased recovery of the gas from landfills.
Domestic
3.31 In the domestic sector, Denmark has implemented a series of measures to improve energy efficiency. The high electrical costs noted above act as an incentive for consumers to shift away from electricity use for space and water heating. In addition, part of the electricity tax burden, of 0.006 DKr/kWh, is used to provide funds of DKr 1 billion over a 10 year period for the Electricity Savings Trust (UNFCCC, 1999a). The EST was set up in 1997 to promote further the switch from individual electric heating to district heating. State subsidies of approximately DKr 50 million per year are also provided to improve energy efficiency in housing for the elderly.
3.32 New building codes were introduced in 1995 aiming to reduce heat demand in buildings by 25% to 70 kWh/m2 annually. Strengthening of codes was envisaged to reduce heat demand still further. Similarly, from 1997 the Act to Promote Energy and
Water Savings in Buildings required house owners to establish energy labelling and energy plans. Small buildings have to be assessed before they are sold. This is expected to raise the profile of energy efficiency substantially within the domestic sector. Large buildings have to be checked annually.
3.33 Energy efficiency of consumer goods is also heavily targeted in Denmark. Consequent implementation of EU-labelling of household appliances has increased the market share of the most energy efficient equipment (labelled "A"). Schemes such as voluntary energy labelling and procurement strategies are used to stimulate demand for energy efficiency products in the absence of co-ordinated policy at EC level. Mandatory implementation of energy management measures and purchase of energy efficient equipment was introduced in government buildings. The actual reduction in the period from 1992-1995 was about 6% (UNFCCC, 1999a) and the efforts are continued
Agriculture Forestry and Fishing
3.34 Agriculture, forestry and fishing account for 4% of GDP. Agriculture is the most important source of methane, comprising 75% of the total methane emissions in 1996. Danish agricultural policy depends strongly on that of the EU. The quota for milk production has led to a reduction in the number of cattle and associated methane emissions, while increasing productivity at a rate of 1.5-2% annually. No quota system exists for pigs so emissions reductions from dairy cows have at times been offset by increased emissions from the pig sector. New technology for generating energy from methane emissions from liquid manure tanks has been recently developed and will assist in meeting a target reduction of 75% in tank emissions.
3.35 Danish policy is geared to reduce nitrogen losses from agriculture to aquatic ecosystems and groundwater, as laid down in the 1987 Action Plan on the Protection of the Aquatic Environment and Groundwater and the 1991 Action Plan for Sustainable Agricultural Development. Between 1991 and 1997, a decrease of 23% in commercial nitrogenous fertiliser consumption was achieved, through regulation of the amount of fertiliser used by type of crop. During the last 10 years, N2O emissions from agriculture decreased by 15%. In 1998, the policy to limit N2O emissions was strengthened further by requiring a 10% reduction in the application rates of nitrogenous fertilisers in 1999 compared to 1998 (UNFCCC, 1999a). Financial incentives offered by the EU for environment-friendly and organic farming are also expected to cause some further limited reduction in N2O emissions.
3.36 As of 1998, 11-12% of the Danish territory was covered with forests, practically all of which are managed. Denmark is now implementing an ambitious afforestation policy aimed at doubling the forest area in 80-100 years, requiring an afforestation rate of 5,000 ha annually. The main policy objectives are to improve self-sufficiency in wood supplies and to increase the areas of forest for recreational purposes. Additionally, the forest expansion proposed would fix carbon dioxide at an eventual peak rate of 3,500 Gg carbon dioxide per year, corresponding to 5% of present annual anthropogenic emissions in Denmark (Denmark's Ministry of Energy and Environment, 1997).
3.37 Thus far, the majority of afforestation has taken place on state-owned land, with a smaller part on marginal farmland. To promote afforestation on private land, the Government offers a subsidy for a 20-year period, but landowners have been reluctant to use this option, since inflation was not considered when disbursing subsidies. Until 1998, only approximately 2,300 ha were planted in each year. Additional funds of DKr 120 million annually have been made available for afforestation since 1998. This afforestation policy implies a considerable conversion of agricultural land to forest with agricultural land decreasing from 65% to 55% of total land area. Whether this can be fully achieved is uncertain, as it depends on farmers choosing between EU subsidies and afforestation grants.