How to run an economy

In their 9.26.10 issue, Newsweek magazine discussed a theory of various economic regions and how well they performed.  At the top of their list of economic performers was a grouping they called:

1. New Hansa

Denmark, Finland, Germany, Netherlands, Norway, Sweden

In the 13th century, an alliance of Northern European towns called the Hanseatic League created what historian Fernand Braudel called a “common civilization created by trading.” Today’s expanded list of Hansa states share Germanic cultural roots, and they have found their niche by selling high-value goods to developed nations, as well as to burgeoning markets in Russia, China, and India. Widely admired for their generous welfare systems, most of these countries have liberalized their economies in recent years. They account for six of the top eight countries on the Legatum Prosperity Index and boast some of the world’s highest savings rates (25 percent or more), as well as impressive levels of employment, education, and technological innovation. more

I happen to agree with this evaluation and have been watching these countries cope with changing environmental and economic circumstances since the 1980s.  And while Germany and Sweden tend to overshadow their smaller neighbors, tiny Denmark has quietly demonstrated that they certainly belong in this top grouping. Not surprisingly, they are successful mostly because they have been serious about their energy consumption.

Denmark’s Road to a Low-Carbon, Energy-Efficient Economy

Climate and Energy Revolt 2011-05-13

By Anders Østervang, First Secretary, Economic Affairs, Danish Embassy

As the world’s population grows and emerging economies expand rapidly, global demand and competition for energy are set to intensify in the decades to come. This will likely drive up prices of the world’s finite oil and other fossil fuel resources, which are concentrated largely in a handful of politically unstable countries. The International Energy Agency projects that global energy demand will increase 34 percent by 2035.

In Denmark, we have decided that we do not want to be in that energy race. We want to insulate ourselves from future peaks in energy prices and disruptions in supply, and to invest our money in green, long-term, sustainable sources of energy. Our government has announced its ambition that Denmark should become fully independent of fossil fuels by 2050, and instead meet its energy needs with renewable energy. A detailed, comprehensive strategy for how to get there, “Energy Strategy 2050”, was launched a few months ago—the first of its kind in the world.

The journey toward a low-carbon and energy-efficient society actually started decades ago, during the oil crises of the 1970s. We took it up as a serious challenge to reform our energy model. At the peak, we stopped driving our cars on “car-free Sundays,” and after the crises we kept gas prices high.

We went into the 1973 oil crisis almost 95 percent dependent on foreign oil imports for meeting our energy needs. Since those days, we have broken this spell of dependence by focusing heavily on energy efficiency and energy savings (in industry as well as households); by exploring domestic oil and gas; by diversifying our energy mix; and, increasingly, by investing in renewable energy sources.

As a result, Denmark is now one of the most energy-efficient countries in Europe and a net exporter of energy. We have reduced our oil consumption substantially so that today oil accounts for less than 40 percent of the energy we use overall. Renewables now account for 23 percent of the energy we consume, and for 30 percent of the electricity. Our many wind farms deliver two-thirds of that energy.

Importantly—and with a bearing on the current debate in the United States—we did this while securing economic growth. Since 1980, the Danish economy has grown by almost 80 percent while our energy consumption has remained more or less flat and CO2 emissions have fallen. We have also seen the development of a strong and globally competitive energy efficiency and sustainable energy industry.

A recent report commissioned by WWF shows that Denmark earns the world’s largest share of its national revenue from the clean tech industry, at 3.4 percent of GDP. This is far ahead of China, in second place at 1.4 percent. The clean tech industry now also accounts for more than 13 percent of our exports. Denmark is now a world leader in wind turbine production, and Vestas alone holds a 12 percent share of the global market. more

The Danes understand that environmental performance is more than just energy efficiency.

Danish shipping giant switches to 'green' wood in containers

24.05.2011

Maersk says 'green' containers are just part of its strategy

The Copenhagen-based Maersk Line has pledged to stop purchasing containers fitted with floorboards made from uncertified tropical hardwood in a bid to reduce illegal logging in tropical forests and combat climate change.

Denmark's Maersk Line announced on Monday that it was the first shipping company to stop buying containers with floors made from uncertified tropical hardwood.

The Copenhagen-based company, which is also building a new generation of energy-efficient vessels, is charting a course toward greater environmental responsibility throughout its shipping operations.

"So far, much of our focus has been on vessels and using as little fuel as possible," said Jacob Sterling, head of climate and environment at Maersk Line. "But we also need to look at containers."

Shipping firms, including Maersk Line, traditionally use containers fitted with tropical hardwood floors, according to Sterling. "This wood is highly durable and fairly low cost."

About two cubic meters of hardwood are required to produce floors for three 40-foot containers. The container industry uses between 1.2 and 1.5 million cubic meters of hardwood each year.

Maersk says illegal loggers have profited from the shipping industry's demand for wood for too long

Certified hardwood

Under its new policy, Maersk Line will purchase containers equipped with floors made from either certified tropical hardwood, bamboo or recycled plastics.

All tropical hardwood has to be certified by the Forest Stewardship Council. The certification, according to Sterling, requires that wood is harvested in a sustainable way for both the forest and the animals and people living there.

Bamboo is an attractive alternative because it is a fast growing plant and is highly abundant near factories making containers for Maersk Line in China, Sterling said.

The recycled plastic floor material, on the other hand, comes from waste collected through Germany's Grüner Punkt program. "This is a very high-quality floorboard, which is mixed with sawdust," Sterling told Deutsche Welle. "We favor the floors made of recycled plastics but will support the other two because we want to have a choice." more