Promoting green economic decision-making

The Paris Agreement and the new SDGs set the ambition and direction for future public and private investment flows. To achieve a green transition that is also resilient to climate change, trillions of Danish kroner will need to be mobilised annually at global level by 2050 from all conceivable public and private sources. In Denmark, too, many billions of kroner must be invested annually in a transition that makes Denmark fossil-free and resilient to the climate changes that are affecting us.

This requires leadership at all levels, and stable and credible framework conditions that can accelerate the transition and leverage public and private investment flows in support of a green and sustainable development path, as well as an infrastructure that is also resilient to climate change. There is considerable synergy with efforts to ensure sustainable use and protection of nature and environmental resources, and with efforts to build a sustainable Danish society for the benefit of all Danes. 

The challenge is also that existing macroeconomic tools do not yet incorporate environmental and climate impacts into economic policy making, and that tools to value environmental and climate externalities in major public and private investment decisions are largely lacking.

CONCITO has therefore launched a project, based on a grant from the Velux Foundation, to organise a dialogue between top Danish and international economists to come up with concrete ideas on how to strengthen green thinking in Danish economic decision-making.

The idea is that the dialogue process will promote awareness of the issue among Danish key players and decision-makers, and come up with suggestions for concrete tools and ideas on what the next steps should be in Danish efforts. The dialogue will bring in the best international expertise and seek inspiration from countries working on this agenda.

The dialogue complements existing efforts and dialogues related to the development of green national accounts, a green GDP, and an environmental economic business cycle model for Denmark. These efforts are crucial and should be further strengthened in the public sector, but the development of a full green GDP, as well as a full environmental economic business cycle model, will take many years. 

The question is therefore what steps can be taken in the meantime to strengthen an impact assessment that takes greater account of the environment and climate in policy development and concrete investment decisions, and this is precisely what the project aims to propose in dialogue with key Danish actors and politicians at Christiansborg.

The project is led by Anders Eldrup, former Head of Department at the Ministry of Finance, and current Vice-Chair of CONCITO's Board.