Flush With Energy

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Flush With Energy

By THOMAS L. FRIEDMAN

Copenhagen

The Arctic Hotel in Ilulissat, Greenland, is a charming little place
on the West Coast, but no one would ever confuse it for a Four Seasons
— maybe a One Seasons. But when my wife and I walked back to our room
after dinner the other night and turned down our dim hallway, the hall
light went on. It was triggered by an energy-saving motion detector.
Our toilet even had two different flushing powers depending on — how
do I say this delicately — what exactly you're flushing. A two-gear
toilet! I've never found any of this at an American hotel. Oh, if only
we could be as energy efficient as Greenland!

A day later, I flew back to Denmark. After appointments here in
Copenhagen, I was riding in a car back to my hotel at the 6 p.m. rush
hour. And boy, you knew it was rush hour because 50 percent of the
traffic in every intersection was bicycles. That is roughly the
percentage of Danes who use two-wheelers to go to and from work or
school every day here. If I lived in a city that had dedicated bike
lanes everywhere, including one to the airport, I'd go to work that
way, too. It means less traffic, less pollution and less obesity.

What was most impressive about this day, though, was that it was
raining. No matter. The Danes simply donned rain jackets and pants for
biking. If only we could be as energy smart as Denmark!

Unlike America, Denmark, which was so badly hammered by the 1973 Arab
oil embargo that it banned all Sunday driving for a while, responded
to that crisis in such a sustained, focused and systematic way that
today it is energy independent. (And it didn't happen by Danish
politicians making their people stupid by telling them the solution
was simply more offshore drilling.)

What was the trick? To be sure, Denmark is much smaller than us and
was lucky to discover some oil in the North Sea. But despite that,
Danes imposed on themselves a set of gasoline taxes, CO2 taxes and
building-and-appliance efficiency standards that allowed them to grow
their economy — while barely growing their energy consumption — and
gave birth to a Danish clean-power industry that is one of the most
competitive in the world today. Denmark today gets nearly 20 percent
of its electricity from wind. America? About 1 percent.

And did Danes suffer from their government shaping the market with
energy taxes to stimulate innovations in clean power? In one word,
said Connie Hedegaard, Denmark's minister of climate and energy: "No."
It just forced them to innovate more — like the way Danes recycle
waste heat from their coal-fired power plants and use it for home
heating and hot water, or the way they incinerate their trash in
central stations to provide home heating. (There are virtually no
landfills here.)

There is little whining here about Denmark having $10-a-gallon
gasoline because of high energy taxes. The shaping of the market with
high energy standards and taxes on fossil fuels by the Danish
government has actually had "a positive impact on job creation," added
Hedegaard. "For example, the wind industry — it was nothing in the
1970s. Today, one-third of all terrestrial wind turbines in the world
come from Denmark." In the last 10 years, Denmark's exports of energy
efficiency products have tripled. Energy technology exports rose 8
percent in 2007 to more than $10.5 billion in 2006, compared with a 2
percent rise in 2007 for Danish exports as a whole.

"It is one of our fastest-growing export areas," said Hedegaard. It is
one reason that unemployment in Denmark today is 1.6 percent. In 1973,
said Hedegaard, "we got 99 percent of our energy from the Middle East.
Today it is zero."

Frankly, when you compare how America has responded to the 1973 oil
shock and how Denmark has responded, we look pathetic.

"I have observed that in all other countries, including in America,
people are complaining about how prices of [gasoline] are going up,"
Denmark's prime minister, Anders Fogh Rasmussen, told me. "The cure is
not to reduce the price, but, on the contrary, to raise it even higher
to break our addiction to oil. We are going to introduce a new tax
reform in the direction of even higher taxation on energy and the
revenue generated on that will be used to cut taxes on personal income
— so we will improve incentives to work and improve incentives to save
energy and develop renewable energy."

Because it was smart taxes and incentives that spurred Danish energy
companies to innovate, Ditlev Engel, the president of Vestas —
Denmark's and the world's biggest wind turbine company — told me that
he simply can't understand how the U.S. Congress could have just
failed to extend the production tax credits for wind development in
America.

Why should you care?

"We've had 35 new competitors coming out of China in the last 18
months," said Engel, "and not one out of the U.S."