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Investing in Green Technologies

Denmark’s future massive investments in green technologies aim at fostering its industry’s competitiveness and mitigating climate change. And it is a turning point for the country’s innovation policy as well.

Since its new “Climate law” of December 2019, the Danish government has been busy planning a number of large investments in green technologies. The Covid-19 pandemic has not halted that, on the contrary, it has accelerated it.

There is a widespread view among virtually all political parties in the Danish Parliament, that the way to economic recovery after the pandemic requires a strong investment in developing and commercializing cutting-edge technologies, particularly green technologies. Already with a leading position in current renewable energy technologies like wind turbines, and bio-refineries, Denmark wants a strong position in large renewable energy installations (such as the two planned off-shore wind energy islands) and emerging technologies like Power-to-X.

Following the classical paper of Ergas about different types of technology policy, this recent move means that Denmark has embarked in a mission-oriented policy. That is, a policy approach with an emphasis on targeting specific areas, and on creating knowledge in the context of its industrial application. This is an important turning point for Denmark, because it has traditionally followed a diffusion-oriented policy approach, emphasizing generic technologies and seeking its wide diffusion across sectors.

Is this good? Yes, it is. Achieving a socially, economically and environmentally sustainable recovery after the pandemic requires clear priorities and dedicated investments.

Will it all work well? It is difficult to say. No benefit without risk. As always, the devil is in the detail, and it will depend how it is implemented.

The Danish approach seems likely to succeed, because it follows three reasonable principles:

  • Move beyond the ‘state of the art’: The large investments planned, are not using ‘mature’ or ‘off-the-shelf’ existing technologies, instead they are focusing on moving the technological frontier.
  • Partnerships across borders: Denmark is collaborating with neighboring countries, to bring synergies in technological capabilities. The recent agreement with Holland, to invest in a large Power-to-X installation in Denmark is a good example.
  • Private actors are on the driving seat: The new and large “hydrogen fabric” to be built in Copenhagen by large Danish firms, will supply green energy to maritime and air transport sector.

A bold investment and approach that will pay off in the medium- to medium-term.

 

 

Photo credit: Unsplash Anna Jiménez Calaf

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