Energy technology and foreign trade: The case of Denmark

This paper address two issues related to energy technology and trade. First it examines the importance of changes in energy technology for long-term trade developments of the Danish manufacturing industry. Secondly the trade potential of a policy to support the development of environmental friendly energy technologies is examined.

Energy technologies affect the competitive position of industries through their energy costs. This paper presents an empirical investigation of the Danish industries with respect to the energy intensity and the relative production development of the energy intensive industries relative to the average industry.

Another important effect of the change in energy technologies is the competitive option for the industries producing the capital equipment of a specific energy technology. Here the consequences for the Danish wind turbine manufacture and for the manufacture of pipes for district heating can be highlighted.

Exports of the environmental friendly technologies are found to be the most important contribution to trade figures in the Danish case.