The cost of CO₂ reduction in Denmark - methodology and results

The report contains phase two of the Danish contribution to the UNEP Greenhouse Gas Abatement Study, which has the main purpose of developing a common methodology for undertaking a cost assessment of greenhouse gas abatement, and to carry out a number of country studies by using this methodology. The methodological possibilities for constructing cost curves - showing the marginal cost of the CO_2 reducing options and the related quantity of CO_2 reduced - are analyzed and the developed methodology is tested for Denmark.

Following the development of a baseline scenario, two main reduction scenarios are constructed: a) a 20% reduction scenario for year 2005, and b) a 50% reduction scenario for 2030, taking as its starting point the 20% scenario for 2005. Based on these two reduction scenarios the medium-term cost curve for 2005 and the long-term cost curve for 2030 for CO_2 reduction are established.

The economically most attractive and the most efficient options with regard to CO_2 reduction are discussed. Finally, a number of robustness and sensitivity analyses are performed. (au) (27 tabs., 16 ills., 9 refs.).