As of June 2015, Denmark has seen a new prime minister, Lars Løkke Rasmussen. Within three months of assuming office, the Danish government is proposing to cut tax breaks on electric cars by 2020.
Thirteen months ago, Copenhagen announced its latest ambition to end the usage of fossil fuel by 2050 in electricity production as well as transportation according to the New York Times. They are over 40 percent renewable energy on their electric grid and are aiming for 50 percent by 2020. The Danes are one of the biggest leaders in renewable energy and green energy initiatives. However, the new government doesn’t seem nearly as supportive of this attitude as the last.
Taxes on conventional cars are often higher than the price of the car itself at 180 percent. Administering this tax on electric vehicles will inevitably triple the price. The price for a Tesla Model S today is around $90,641, but with the 180 percent tax on the cars will increase the price of the car itself to $175,667 by 2020 according to InsideEVs.
In the 2016 budget draft, the country is making diesel vehicles more attractive by cancelling the pollution levy. They believe by sacrificing their eco-friendly initiatives, they will be helping businesses save money as well as create jobs. According to the Finance Minister Claus Hjort Frederiksen, Denmark is facing a widening budget deficit according to Bloomberg Business. (Get in line, Claus.)
Though the idea of having electric cars exempt from taxes is a novel idea, there is simply not enough money to support the thought according to Frederickson. Compelling electric vehicle consumers to pay the equivalent in taxes as their emissions expelling antagonists will increase the government’s revenue by 450 million kroner per year.
However, what the government does have enough money to support, despite the devastating, widening budget deficit, is the elimination of a tax on businesses due to nitric oxide emissions. Nitric oxide emissions are generated from burning fossil fuels, which are more abundant in diesel cars than gasoline cars or electric vehicles. The elimination of this tax will save businesses about 240 million kroner in 2016 alone, according to the Washington Post.
This move alone disputes any argument against the expansion of the tax on electric vehicles as a move to increase revenue and decrease any budget deficit. In that case, the nitric oxide tax, also known as the NOx tax, would still be instated as another means of garnering revenue. The bias is so clearly in favor of businesses and against the green initiative dogma that Denmark has become so prominent in.
With the Volkswagen emissions scandal still fresh in everyone’s minds, Denmark has decided to eliminate the NOx tax, and tax breaks on electric vehicles, in clear support of businesses and in opposition to green energy initiatives. This endangers green energy reform in many ways seeing as Denmark is, for now, the leader in green energy. In conferences, they set the standard for other countries, and many times they portray the role model for what we should strive for.
With the recent policy changes and the new government looking to give businesses a break instead of holding them responsible for their emissions, will the rest of the world follow? Or rather, now that a giant in green energy has clearly re-prioritized, the No. 1 spot is now open to Germany who is right behind Denmark and a clear contender.
The timing of such policy changes is grotesque, especially following the Volkswagen scandal. In a time when businesses should be facing harsher repercussions for their lack of insight and empathy of the consequences of their actions on the climate, Denmark has done the exact opposite of what most people would expect. This 180 degree swing may have cost them their reputation, and the new government has definitely made an impression, not necessarily one that will help them.
Jesseba Fernando is a staff columnist for The Daily Campus opinion section. She can be reached via email at email@example.com.