The current Danish government has been praised for being proactive in reducing carbon emissions. But the neoliberal methods it has embraced for this task are part of the problem, not part of the solution.
The enthusiasm was sky-high. The broad agreement between the newly elected Social-democrat government and all other political parties in the Danish Parliament on the 70 percent reduction of the greenhouse gases by 2030 compared to 1990 was described as no less than a great triumph.
The PR apparatus of the government even prepared a promotional video, in which the Danish Minister for Energy and Climate was creatively prepared to send the message through: “a turning point in the fight for the climate.” The real triumph was still in the waiting, but in a sense the agreement was a kind of a victory. A victory for the climate activists, who also in Denmark had made it clear that they had been fed up with empty promises by their politicians.
Despite this proclaimed ‘great triumph’, a few weeks earlier, the Social-democrat Prime Minister had declared to the industry lobby that a new climate agreement should not come at the cost of wealth, jobs and loss of the competition by Danish firms. Putting aside the embarrassingly obvious fact that if our civilisation collapses due to global warming, there will be no wealth to enjoy (or most probably no humans either), we still have to see concrete steps to reach the proclaimed reduction in CO2 emissions.
The devil is in the details.
There are of course a few positive aspects in the climate agreement. The first is that it is binding, which means that it applies to all coming Danish governments in the future. Second, a climate expert panel (Klimarådet) will act as an independent watchdog for its climate aims, advising the government and expressing its opinion regarding whether it is on the right path to achieve the climate goal. Third, the Parliament will judge the government’s climate achievements at the end of each year.
While this is all good in theory, we are still expecting to see some teeth put into the climate agreement. This process was due this spring, but the COVID-19 pandemic has postponed it to the near future. Nevertheless, a few interesting aspects of the climate agreement are worth mentioning.
The first is that it is not entirely true that there is a lack of concrete steps for the green transformation in Denmark. The first few are found in the government’s budget law for 2020. What is on offer in the budget? Well, the build up of a “Danish Green Future Fund” with an impressive budget of 25 billion kroner (3,35 billion Euros) for the purpose of “development and distribution of renewable energy and stimulation of green technology export.”
The budget report goes on to explain how this sum of money is distributed. Of the 3,35 billion Euros, almost 1,9 billions go to the Export Credit Fund. A couple of clicks in the website of the Fund and it is clear that the Fund is nothing else but a state subsidy for the Danish export firms.
As the website proudly announces, the Fund is going to “cover 90% of the losses of the export firm, in case the international buyer withdraws from the import agreement without paying “ or if the losses are due to a shift in the international affairs. In other words, the Danish export firms have their private profits from the export guaranteed, because the public will cover 90% of the losses anyway, in case the investment goes awry.
Another 134 million Euros will go to the Investment Fund for the Development Countries, which activists from the Global Action have uncovered as another scheme of state subsidy of the large corporations. In short, sixty percent of the Green Fund respects the neoliberal principle: the costs are socialised, the profits are privatised. As far as the rest of the rest of the green transformation is concerned, we are still waiting.
When push comes to shove.
On the 9th of March, the Expert Panel (Klimarådet) came with its analysis and advice on how best to achieve a 70 percent reduction of greenhouse gases by 2030. Their conclusions were interesting, but the most interesting was that the planned green transformation will cost up to one percent of the Danish GDP.
As they put it: “One percent of the GDP is a large sum, (…) but not a sum that threatens our country’s wealth”. Therefore, gone was the concern for the “loss of our wealth” (in comparison the US had used 37 percent of their GDP for war purposes during WWII).
Even more interesting were reactions to its conclusions. Among all the suggestions, the various industry and agricultural lobbies had decided to concentrate on the one — on which the economists agree as the method to reach “the environmental goal – of reduced emissions – in the most flexible and least-cost way to society”, namely carbon pricing.
Words like “devastating”, “a desk exercise”, and “it will have the opposite effect” were used to describe the conclusions. The same minister, who had adulated the new climate law a few months ago, now had his own reservations on the advice of the Expert Panel. By the way, this is the very same Panel which was supposed to act as a watchdog for the minister, according to the law.
COVID-19 and the future after it.
Why these reactions? Well, what the Expert Panel conclusions called for was that the polluters pay their fair share through CO2 taxation and a reduction of their state subsidies. That was a mistake. Maybe the experts are naive enough to think that we live in a free competition economy, but that is for the economics books. In the real world, corporations need state protection. Those who do not understand this can do as much “desk exercise” as they like. In the meantime, the COVID-19 pandemic has put off the discussion indefinitely.
What will happen now, and how much teeth the new law will have, no one knows. One thing is for sure: the powerful institutions do not like the idea. But what is also certain is that climate activists are not thinking about giving up the fight.
Just before the country was locked up, the Copenhagen DSC, XR-DK and other groups had planned to meet and discuss future strategies. The meeting was cancelled due to the COVID-pandemics laws, but we plan to continue where we left off, when the situation normalises again. The rest is up to us, and those who will follow.
Redi Pecini is a member of the Local DiEM25 Group (DSC) in Copenhagen.
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