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This European nation provides a textbook example of why carbon pricing should be avoided

Carbon Tax Lovers’ Utopia of Denmark Heads Into the Economic Toilet


By —— Bio and Archives--June 19, 2014

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Denmark is often held up as the utopia for carbon tax lovers. Economists such as Jeff Rubin—former CIBC World Markets chief economist—ask questions like the following, and then conveniently answer them for us:

“How, then, has Denmark been so successful in managing its carbon emissions? The answer lies not with the source of power, but with the price of power. At 30 cents per kilowatt hour, electricity costs anywhere from three to five times what the average North American would pay ... What I learned from my trip to Copenhagen is that you don’t have to be a world leader in green energy technology to cap your carbon emissions. Just charge 30 cents per kilowatt hour for power, and slap a 180 per cent surcharge on vehicle prices. Consumers will do all the rest.”

Well, there is some bad economic news coming out of this high-energy cost region which has had a carbon tax for two decades: Denmark’s economy is going into the toilet, and has been for many years.

Since the year 2000, Denmark’s real per capita GDP has increased by just 2.0 percent. Over 13 years. That is a seven-fold slower economic growth rate than the European Union average over the same period—and the EU’s economic progress as a whole is nothing to be proud of either. Since 2007, Denmark’s real per capita GDP has declined by almost seven percent. Compare that to the EU’s decline of “only” 1.6 percent, as bad as that is. Denmark’s current standard of living is worse off than it was in 2004. And we know that industrialized nations with higher electricity prices experience generally slower economic growth. Thus, Denmark’s economic implosion shouldn’t surprise anyone.

But, Rubin says, “countries that consume less, Denmark for instance, enjoy a high standard of living and surveys show their residents to be much happier than us energy gobblers in North America.” Ah yes, those happiness surveys. Gallup just did one, and it developed the 2013 Worldwide Positive Experience Index. Denmark is ranked right up there in happiness and positive experiences, placed number eight, behind (in descending order from first—i.e., happiest—country) Paraguay, Panama, Guatemala, Nicaragua, Ecuador, Costa Rica, and Colombia.

You read that right. Those South and Central American narco-states are the happiest places on the planet, even happier than Denmark—barely holding off Honduras, Venezuela, and El Salvador, which are ranked 9th, 10th, and 11th, respectively. Canada is 16th for positive experiences, behind that bastion of happiness, the brutal authoritarian state of the United Arab Emirates. The United States is 24th for positive experiences, just a few places ahead the happy places we call Rwanda, Uzbekistan, and China. Let’s just say I place no serious weight on worldwide surveys of happiness, because if residents of narco-states and terribly nasty dictatorships absent any basic human rights are actually as happy, or even happier, than citizens of Canada and the United States, then we truly are through the looking glass of nonsense.

Since 2000, Denmark’s violent crime rate has increased by 36 percent

Since 2000, Denmark’s violent crime rate has increased by 36 percent. That doesn’t sound like a particularly happy society. Its homicide rate increased 14 percent between the 2005-2007 and 2008-2010 periods. The number of robberies more than doubled from 2004 to 2010 and domestic burglaries increased 36 percent, a not unexpected result if many people are in energy poverty. Right next door in Germany, where the economy did quite well over the past decade, violent crime rates have not increased and robberies, burglaries, and homicides actually decreased between 2004 and 2010.

Motor vehicle thefts are on the decline in Denmark, but that is probably because energy costs are so high even the criminals can’t afford to operate them—so why bother stealing one?

Carbon tax proponents want the USA and Canada to be like Denmark? Where economic growth is negative and crime rates are exploding

Of course, in the United States, violent crime rates have been dropping like a rock over the past two decades, in contrast to the skyrocketing rates in the happy carbon tax utopia of Denmark.

These are the results you get “in Denmark, [where] government-regulated power prices are laden with carbon taxes, which means electricity isn’t cheap, whether it’s wind powered or coal fired ... and [over] the last two decades, Denmark has cut its carbon dioxide emissions by 13 per cent.”

The carbon tax proponents want the USA and Canada to be like Denmark? Where economic growth is negative and crime rates are exploding? No thanks. But at least Denmark’s carbon dioxide emissions are decreasing, which is something the Danes living in fear of crime can take comfort from as they watch their standard of living decline. If you want a case study of why carbon taxation should be avoided, Denmark provides it in crystal clarity.


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Sierra Rayne -- Bio and Archives | Comments

Sierra Rayne holds a Ph.D. in Chemistry and writes regularly on environment, energy, and national security topics. He can be found on Twitter at @srayne_ca


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