OECD Environmental Performance Reviews: Denmark 2019

Executive summary

Maintain efforts to manage water pollution and preserve nature

Denmark outperforms the OECD average for most of the Sustainable Development Goals. It has decoupled its greenhouse gas (GHG) and major air pollutant emissions from economic activity. Denmark ranks among the OECD countries with the lowest energy intensity, thanks to a proactive energy efficiency policy. It has experienced a boom in renewable energy resources over the last decade, with renewables rising from 15% to 35% of total primary energy supply, driven by strong political will and public acceptability. Denmark has become a world leader in wind energy technology thanks to the significant and growing support of electricity consumers (via the electricity bill). It is now committed to increasing the share of renewables in gross final energy consumption from 30% in 2020 to 55% by 2030.

Despite progress, environmental challenges persist. In spite of strong nitrogen pollution management policies over the past decade, Denmark still faces excessive levels of nitrogen discharges into its coastal waters, of which only 1.7% are in good ecological status. Denmark’s spatial planning policy promotes the interconnectivity of areas of interest for nature protection, but the nature protection policy does not set targets for protected areas other than biodiversity forests (which represent a very small part of Denmark’s land).

Strengthen co-operation with municipalities to improve environmental governance

Denmark has a well-functioning environmental governance system at the central level. Particular assets include cross-party political agreements, proactive participation by civil society in policy making and high-quality advisory bodies. Socio-economic impact assessment of government decisions that may have an impact on the environment is used extensively, though not always systematically. Since 2007, Denmark’s 98 municipalities have been responsible for increasing aspects of environmental management. However, environmental rules have not always been applied in comparable ways countrywide. The government has used task forces and sharing of expertise to build capacity in municipalities. Expanding these efforts to domains and regions where municipalities face challenges will be important going forward.

Farmland takes up more than 60% of the surface area, making the agriculture sector a key player in the protection of the environment. Spatial planning and land banking are part of the strategies used to manage environmental protection in agriculture. In particular, municipalities must designate existing and potential natural areas on the Green Map and take them into account when preparing land use plans. Efforts to convert environmentally valuable farmland into natural sites through the Multifunctional Land Redistribution Fund could be scaled up, including through the mobilisation of private funds.

Involve all sectors of the economy to move towards a carbon-free economy by 2050

Green growth is high on Denmark’s political agenda. The country aspires to achieve 100% green electricity by 2030 and zero net GHG emissions by 2050. It is one of the first countries to develop and implement a green energy strategy based on a broad political agreement. This Energy Agreement helps create a climate of trust for investors in clean energy and public acceptability to support the consumer prices of such energy. The 2018 Energy Agreement aims to further develop renewables and improve energy efficiency at market-like conditions. At the same time, energy tax concessions for businesses should be removed as they reduce incentives to save energy and reduce CO₂ emissions.

Achieving the 2050 goal will, however, require decarbonising sectors beyond energy, such as transport and agriculture. Tax concessions on the purchase and ownership of cars aim to increase the market share of energy-efficient cars and electric cars in the vehicular fleet. These concessions reduced environmentally related tax revenue to 3.7% of GDP, although that remains the highest level in the OECD. Decarbonising the agriculture sector involves identifying low-carbon farming practices, a path in which Denmark has engaged through research and development programmes. Pending transition to cleaner transport and development of mitigation measures for agriculture, Denmark is using flexibility mechanisms to achieve its ambitious goal of reducing GHG emissions outside the EU Emissions Trading System by 39% compared to 2005 levels by 2030.

Streamline municipal waste management to foster the circular economy

Denmark has long paved the way for circular economy approaches by promoting eco‑design, clean production, eco‑innovation and sustainable consumption. In 2018, a political agreement was reached on circular economy, with a strong focus on how business can become its engine and how government can help. Nevertheless, total waste generation rose by 30% between 2010 and 2016. Since 2007, Denmark has had the highest levels of municipal waste per capita in the OECD, with 785 kg per inhabitant in 2017. At the same time, the country has managed to nearly eliminate landfilling. It has also achieved impressive results in material recovery of most waste streams. Household waste remains a notable exception, however, with about half going to incineration with energy recovery.

Municipalities have considerable autonomy in waste management planning, including on the treatment of most waste. The cost of waste management services is among the highest in OECD Europe. Heavy investment by municipalities in incineration plants has created excess capacity. That, along with a lack of harmonised rules on waste sorting, limits incentives for investment in recycling and reuse.

Prioritise chemicals management policy based on risk to health and the environment

Denmark has put in place strong institutional and policy frameworks, as well as exemplary stakeholder co‑operation, to manage the health and environmental risks associated with the use of chemicals. The shift from an ad-valorem tax on pesticides to an impact-based tax in 2013 reduced by 40% the health, ecotoxicological and environmental risks of pesticides sold, as measured by the pesticide load indicator, from 2011 to 2016. As Denmark relies on imports of chemicals, its policy also focuses on ensuring that imported chemicals and consumer products are safe for the environment and health. To this end, it has developed a high level of expertise in chemical risk assessment, becoming a European and international standard setter in this field. Denmark ranks fifth in the EU for the number of chemical substances assessed and third for endocrine disruptors.

Increased monitoring of chemicals in the environment and in consumer products is the first step in managing their health and environmental risks. This should not, however, be detrimental to the predictive risk assessment of chemicals, i.e. before a negative impact can be detected in humans or the environment. Denmark needs to manage the trade-offs between the two – that is, to ensure efficient sharing of budgetary resources between risk‑based monitoring of chemicals and predictive risk assessment. Denmark must also continue to combine national management of chemicals with participation in international efforts to identify and manage the risks associated with chemicals of concern and compliance concerning high-risk chemicals in products.