Denmark’s pensions and insurance lobby group has reacted to an early outline of the options for the country’s intended new green tax, saying it supports the approach, and also warning that such a levy must not be allowed to chase investment away.

Insurance & Pension Denmark (IPD) was responding yesterday to an initial report from the expert group convened by government to provide input for a uniform CO2 tax as part of a green tax reform.

Tom Vile Jensen, deputy director at IPD, said: “The CO2 tax is clearly an important tool in the climate fight. But it must not be so high that we chase green investments, climate technologies and jobs out of Denmark.

“Therefore, we support the expert group’s preliminary thoughts and approach to a CO2 tax, which strikes the important balance well,” he said.

In its report, the expert group presented three different tax models, all of which the group said ensured a CO2 reduction in industry and elsewhere of approximately 3.5 million tonnes in 2030.

The tax ministry, which released the report, said a uniform CO2 tax was a crucial instrument for achieving “the ambitious goal” of reducing climate-damaging emissions in Denmark by 70% by 2030.

Climate Minister Dan Jørgensen said: “It must be more expensive to pollute in Denmark, and Danish companies must have a much stronger incentive to switch from black to green.”

The recommendations from the expert group had provided a solid basis for starting political discussions, he said, adding: “It will not be easy, but this can and must be done.”

IPD said that in the 2020 report from the Financial Climate Partnership – a stakeholder group – it was estimated that at least DKK600bn (€80.6bn) had to be invested in the green transition in Denmark by 2030.

The extensive need for investment meant private investment had to play a crucial role, he said, so having the right framework as soon as possible was vital.

“In addition to a CO2 tax, we therefore need targeted public incentives and a clear long-term investment plan that can secure the necessary private investments,” Vile Jensen said.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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