Danish parties strike deal to develop carbon tax

AFP/The Local
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Danish parties strike deal to develop carbon tax
Denmark's finance minister Nicolai Wammen (centre), and negotiators from the other parties. Photo: Philip Davali/Ritzau Scanpix

Denmark's parties have forced the government to significantly toughen the climate plan it put forward in May, with a new plan agreed on Sunday night increasing the amount of projected greenhouse gas reductions from 2m to 3.4m tonnes, and committing the government to developing a carbon tax.


"When this government came in a year ago, we promised the Danes that we would put the climate on a pedestal and once again take the driving seat on green issues," Denmark's finance minister, Nicolai Wammen, said after the deal was struck.  "That's something we are delivering in a big way today." 
The centre-piece of the agreement, which is focused on energy and industry, is the creation of two "energy islands", one artificial and one centred on the island of Bornholm, which together have the capacity to generate 5GW of power by 2030. 
The deal also includes a plan to subsidise carbon capture and Power-to-X technology which can turn power from the islands into green fuel. 


"With the establishment of the world's first two energy islands and the world's largest investment in green fuels, Denmark is taking global climate leadership seriously again," climate minister Dan Jørgensen said. 
Morten Østergaard, leader of the Social Liberal Party, which had threatened to topple the government if a significant deal was not reached before the summer, hailed the agreement as a success.  
"This evening it became greener to be Danish," Østergaard said on Twitter after the deal was struck. "Significant CO2 reductions and broad agreement on green tax reform. That's promising for a new quantum leap in the autumn." 
The Danish Council on Climate Change, which consults on and evaluates the country's climate policies, has suggested that the current carbon tax of 177 Danish kroner ($26.6 dollars or 23.7 euros) per tonne should be increased to 1,500 kroner.
However, it is still not clear whether the government will follow the council's recommendations, and environmental groups did not share the government's enthusiasm for the new deal.
"We only see the relatively tenuous beginnings of a green transition in Denmark," Helene Hagel, head of climate and environmental policy at Greenpeace Denmark, told AFP.
According to Hagel, the government will need to tax all greenhouse gases, not just CO2.
"It is essential to put a more precise price on pollution in the form of greenhouse gas taxes," Hagel said.


The deal even won the backing of the populist Danish People's Party, which has in recent months suggested that Denmark should reduce its 70% emissions reduction goal to take into account the economic impact of the coronavirus crisis. 
Only two parties, the New Right Party and Free Green Voices, refused to sign the agreement. 
"The Free Greens refuse to green stamp a government that has clearly not understood the urgent seriousness of the climate crisis,"  Sikandar Siddique, the independent MP representing the  latter group, said on Twitter. "That is why we are leaving the climate negotiations. A slow victory is a defeat." 
Mette Abildgaard, spokesperson for the Conservative Party welcomed the agreement that any green tax would be revenue-neutral. 
"It is stated directly in the agreement that it should not be more expensive to do business in Denmark or more expensive to be a citizen of Denmark," she said. "This will give us greener taxes, but we will not get a bigger tax burden." 


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