Copenhagen Economics was asked by Dansk Energi to analyse how Denmark can meet its GHG emission targets through greater use of renewable energy sources and energy efficiency improvements. The client wanted to better understand what combination of renewable energy and energy efficiency will be the best way to reach emission targets.
We studied a range of measures to reduce GHG emissions, and collected data on how much emissions could be reduced, and at what cost, for each measure. We then constructed supply curves for emission reductions, separately for renewable energy and energy efficiency measures, and for measures inside and outside of the EU-ETS quota sector.
We found that there is a lot of uncertainty about how technologies will evolve in the future, but it looks likely that the bulk of relatively low-cost emission reductions can be achieved with greater use of renewable energy sources in the power and transport sectors. In addition, there are a number of measures to improve energy efficiency that should be carried out no matter what, as they have a negative cost.
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