01. Greater roles and measures for the public sector

The public sector plays a key role in the green transition even though it does not, in itself, emit a lot of greenhouse gasses or has been appointed a climate partnership established in its own right. The 2030 target can only be achieved by working across the public and private sectors.

And if we are to use the positions of strength of the Danish corporate sector, we also need to use the potential that lies in our state, regions and municipalities.

Strategic and active roles

Overall, it can be useful to distinguish between three roles of the public sector (see Mazzucato, 2013):

  1. State, regions and municipalities can set a strategic direction, for example by setting targets for 2030 or 2050, as the government and a number of municipalities have already done, or by putting forward visions for specific sectors.
  2. The state, regions and municipalities must ensure coordination between the different players – among other things by establishing partnerships – as has already been done in Denmark in the area of climate change.
  3. The state, regions and municipalities can create and develop new markets. Firstly, by introducing regulation which creates demand and thereby greater market pull. Secondly, through tenders, investments and subsidies.

In addition to this, the state can have a role to play in connection with ownership of critical infrastructure. This applies to, among others, electricity, district heating and gas infrastructure and also when it comes to data handling.

All of these roles are brought into play in FH’s proposal. Firstly, FH proposes strategic commitments to Power-to-X, circular economy and carbon capture. Secondly, the proposal suggests that the state should coordinate players and collect data to underpin energy efficiency measures and intelligent consumption.

Thirdly, it is proposed that the state and municipalities introduce regulation and become subject to requirements that create market pull and that they co-finance the above commitments and the development of standardised tools, climate accounts etc.

Green procurement, tendering and catering

In addition to the above proposals that are presented in the next chapters, FH presents a number of proposals that are summarized in box 3. What the majority of these initiatives have in common is that they do not only reduce emissions from a certain source, but that they also fundamentally change the way things are done in a number of sectors. They thereby drive a transition in the proper sense of the term.

One of the most important proposals in this connection is green and socially sustainable public procurement (see figure 7). Public sector procurement amounts to more than DKK 300bn a year and the initiative can therefore make a large difference in the form of demand and market pull for green solutions across sectors.

Specifically, a “follow/buy green or explain”-principle should be introduced in the Tender Act, and green public procurement should be underpinned by a central purchasing unit – for example, the National Procurement Ltd. Denmark (Statens og Kommunernes Indkøbsservice) – and the development of a number of tools as described in the other chapters, for example life cycle analyses in construction.

The principle must be phased in over a number of years so that suppliers can keep up and to avoid that the public sector pays excessive prices. Finally, a requirement should introduce labour clauses and training and education clauses in the Public Procurement Act so that procurement and tenders are socially sustainable.

The state can also influence the development through the public sector caterers that serve 800,000 meals every day. Here, the skills development, networking and exchange of experience are crucial to making healthy, climate-friendly and sustainable choices. DKK 30 million must be allocated to this scheme from 2020 to 2030.

Strategies and legislative work

New strategies and pathways to the legislative work must underpin the transition. A national smart city strategy should be prepared whichwill optimize energy- and resource consumption in cities and spread intelligent traffic management systems, including through the use of data.

The strategy should include experiences from, for example, Realdania, BLOXHUB, C40, utility companies, grid companies and others that work intensely with energy optimization, flexible energy consumption and high-level data processing.

Public sector procurement amounts to more than DKK 300bn a year.

danish trade union confederation

At the same time, all municipalities must have a climate strategy which can set a course at the local level and contribute to create and develop markets for climate-friendly products and services.

The strategy must contain specific requirements for reductions in climate impact and guidelines in areas such as purchasing, outsourcing, building and construction works, transportation- and supply companies such as energy, water and waste.

At the same time, the plans must specifically address a just transition. This includes solutions for companies and citizens for whom the transition constitutes a challenge – for example if the company has a large carbon footprint or if the demand for its products can be expected to decline in future.

Addressing a just transition must be coordinated with the coming guidelines from the EU Commission which has suggested, among others, that a territorial just transition plan must be a precondition for full access to the EU’s coming “Just Transition Fund”.

The climate strategies must, as a general rule, be embedded and developed at the local and regional level because municipalities and regions are different and have different possibilities for developing climate change solutions.

This can be done by involving citizens, companies and workers. At the same time, there will be a need for coordination between municipalities, among other things to ensure coordination of infrastructure and standards.

Furthermore, legislative proposals and capital expenditure should be subject to impact analysis for their impact on climate change in the field of climate change they should also be subject to impact analysis for employment- and distributive effects.

This would be in line with the wording of the Climate Act to ensure social balance and cohesion. At the same time, it will demonstrate where there is a need to resolve challenges facing companies, workers and local communities. It can contribute to a local embedding and support for the green transition towards 2030 and 2050.

In the same vein, the expertise of the Council on Climate Change should be expanded. The green transition is about more than simply greenhouse gases and technologies – it requires a general transition of society since it affects more or less all activities in basically all sectors.

The Council on Climate Change should therefore be assigned additional resources, especially in the areas of employment, training and education, industry and a just transition.

Finally, the state must, independently of proposals, support and guarantee responsible use of data and artificial intelligence. Many solutions towards 2030 and 2050 rest on the collection of data on consumption, behaviour etc.

The state should take on a coordinating role and ensure that this does not leave a disproportionate share of the bill with the Danes and does not intervene in their everyday lives

danish trade union confederation

It must also ensure that the processing and sharing of these sensitive data on citizens comply with the principles on the right to privacy and the possibility for opting out. A total of, for example, DKK 100m from 2020 to 2030 can be allocated to the development, implementation and operation of specific solutions.

The green transition is about more than greenhouse gases and technology. It entails a transition of society in a wide sense.

You just finished reading Chapter 01. Greater roles and measures for the public sector.

Read all chapters below:

05. More circular economy, better disposal and management of waste

The circular economy is about moving from a linear production to methods of production where materials are kept in a circuit and the need for new raw materials is reduced.

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10. Climate taxes and other sources of financing

Throughout the years, many economists have pointed to the fact that the most cost-efficient and technology-neutral tool for reducing greenhouse gas emissions would be general climate taxes.

Read more