Danish climate commission claims that tax hikes and price rises on fossil fuel will turn renewables into an affordable choice.
According to the Danish climate commission, Denmark could become fossil fuel-free by 2050, at a net cost of just US$2.95 billion. The report that sets the fossil fuel free goal makes the case for investing an amount equivalent to 0.5% of the country’s annual GDP in renewable energy.
The climate commission claims that prices of fossil fuels will rise over the next four decades, while renewables become relatively cheaper – hence the small net total of investment required. This is anticipating fossil fuel price rises will follow global supply crisis and international climate change agreements. But, it also proposes substantial tax hikes on fossil fuels phased in over two decades, rising from 5 Danish krone (US$ 0.90) per gigajoule in 2011 to DKK50 by 2030.