Nordic Countries Show Potential for Low Carbon, Competitive Economies

In recent years, critics of proposed legislation to reduce America's dependence on fossil fuels and the associated carbon emissions which cause climate change have argued that transitioning to low carbon energy would hinder economic growth. But the five Nordic countries (Denmark, Sweden, Norway, Finland, and Iceland) are showing that serious investments in energy efficiency and renewable energy can actually strengthen economic competitiveness.

Energy Efficiency
The Nordic countries have experienced many historical similarities in transitioning to low carbon economies. When a global oil crisis caused imported oil prices to sky rocket in 1973 and 1979, Denmark and Sweden were 80-90 percent dependent on oil. Both countries prioritized energy savings and built extensive district energy systems, which heat multiple buildings with captured "waste" heat from power plants and industry, or with heat from renewable resources such as geothermal, water, solar, or biomass. Today, over 61 percent of Danish homes are heated with waste heat, displacing the need for foreign oil. The Danish government has also promoted energy efficiency in buildings and houses constructed across the country; a Danish home built in 2008 only uses half as much energy per square foot as a comparable home built before 1977. The housing and building sectors in Sweden today are almost fossil fuel free, and use an energy mix of district heating, electricity, and biofuels.

Renewable Energy
The Nordic countries also have invested heavily in research and development of low carbon, renewable energy resources. In Denmark, renewable energy accounts for 19 percent of overall energy consumption. In terms of electricity, renewable sources account for 28 percent, chiefly due to the incorporation of onshore and offshore wind energy, and the use of waste-to-energy plants. Thirty-nine percent of waste in Denmark is incinerated to generate electricity for thousands of households. In Sweden, 43 percent of the energy supply comes from renewable sources. Fossil fuels account for less than 20 percent of energy use in Swedish industry, which includes a substantial amount of heavy industry such as steel and paper factories. Finland is one of the world's leading users of renewable energy for heat, power, and transportation fuels; biomass accounts for 20 percent of energy consumption. In Norway, 60 percent of total energy consumption comes from renewable sources, primarily hydropower. Iceland gets 82 percent of its primary energy from renewable resources – geothermal energy being a major contributor – and is actively working to decrease its use of carbon fuels even further.

Economic Growth and Future Goals
The Nordic countries have experienced steady economic growth as they have
transitioned to low carbon economies. Danish energy consumption has remained flat over the last 28 years while the economy has grown 78 percent; exports of Danish energy technology make up around 11 percent of export goods. Denmark has a goal of becoming 100 percent free of fossil fuels by 2050. Sweden has reduced greenhouse gas emissions by 12 percent since 1990 – while experiencing economic growth of 48 percent during the same period – and it has a goal of becoming carbon neutral by 2050. Though Iceland already gets 82 percent of its primary energy from renewable resources, the country is actively working to decrease its use of carbon fuels even further. Norway’s strong carbon policies reduced average carbon emissions per barrel of oil produced to less than half the global average, and the country aims to be carbon neutral by 2030. Finland has a goal of 60 percent renewable energy by 2050, and 80 percent reduction in emissions (compared to 1990 levels) by 2050.

On October 21, the Environmental and Energy Study Institute (EESI) and the Nordic Council will bring representatives from each of the five Nordic countries to Capitol Hill to discuss their experiences transitioning to low carbon economies. This event is free and open to the public, and more information is available at www.eesi.org/briefings.