Climate Projects - a Green Opportunity for Technology Exports

Contribution to debate by Lars Aagaard, Environmental and Energy Manager, Confederation of Danish Industries

Lars Aagaard

By Lars Aagaard, Environmental and Energy Manager, Confederation of Danish Industries

Climate projects in Eastern Europe and the third world, the so-called JI and CDM projects [1], provide new perspectives for Danish companies to develop and transfer energy and environmental technology to the rest of the world.

Today, Danish companies face the paradox that there are efficient energy technologies and a documented need for investments. Nevertheless, the dissemination of the technologies is quite limited - both within and outside the EU.

However, there are a lot of things to work with: Historically high oil prices and increasing electricity prices as well as a number of political initiatives at EU level, such as the climate policy and the goals for a bigger share of the renewable energy.

Reasonable private economic energy saving initiatives in Danish households have also been documented, however, the Danish population does not save on the energy despite the very high energy and CO2 taxes.

Besides the Europeans' lack of interest in investing in energy efficient solutions, there is too little focus on countries such as China, India and Russia with the highest economic growth and an explosive growth in energy consumption.
It is important that Denmark makes an extra effort and improves the business within the well-known technological solutions. Denmark has to sow the seeds in order to create and develop new technologies. China, India, Russia are among the countries that are to make use of more Danish, energy efficient solutions within the energy supply and the housing sector. This type of market maturing will create future market-related, technological success.

More Climate Projects

The so-called green development mechanisms, JI and CDM projects, should to a wider degree than today be used to mature the market for environmental and energy technological products and production processes. This will at the same time add to the reduction of the man-made climate influences and gain Danish companies access to new markets. The economic advantage of the CO2 reducing projects will have an extra effect and make export of Danish environmental technology possible.

A prerequisite to credit the JI and CDM projects in the Danish CO2 inventory is cooperation between the Danish authorities and the authorities in the countries where potential investments would take place. This cooperation is essential in order to establish new markets for the Danish companies.

An enhanced Danish contribution to climate projects is also an advantage in the long term. If we get off to a positive start now, Denmark will hold a strong position after the termination of the Kyoto agreement in 2012 with an extensive experience with JI and CDM projects. This competence can be offered in line with other consulting competences.

Besides the instruments of the climate policy, a number of other Danish initiatives should promote the knowledge of Danish technology, including the Export Credit Fund which has a special activity related to wind power, the Private Sector Programme which supports projects in the third world etc. The Danish companies will undoubtedly benefit from coordination of the various programmes.

Overall, there is a big growth potential if JI and CDM projects are used in a more proactive way. Action has to be taken to coordinate the existing energy funds in order to focus the activities. The use of the technology must be user operated and must focus on test and demonstration plants. And it must be directed towards the market in stead of basic research.

[1] Joint Implementation (JI) is investment in projects which reduce CO2 emissions in countries which have committed themselves to reduce the emissions - for instance in the new member countries in the EU. In return for the investment, the investor gets a JI credit equal to the CO2 reduction. The investor can either spend or sell the credit. Clean Development Mechanism (CDM) is similar to JI, except for the fact that the investment takes place in the developing countries which have not committed themselves to reduce the climate gases.

Environmental technologies

Any technology, that either directly or indirectly improves the environment. It includes technologies for limiting pollution with the held of cleaning, more environmentally friendly products and production processes, more efficient energy and ressource management as well as technological systems that reduce the environmental impact.

Examples include e.g. technology flue gas cleaning, wind turbines, water treatment, enzymes for animal feed and washing powder, biofuel production, energy-efficient pumps and substitution of chemicals with more environmentally friendly solutions.