The Danish government have a goal in 2050 about being fossil free in the entire energy sector. As a tool to achieve such a goal, is the socio-economic analysis, but it is only used in the heating sector. Under the heating law “Lov om varmeforsyning” in Danish, the socio-economic analysis is a demand when planning to develop certain elements in the heating sector. The purpose of the socio-economic analysis is to improve upon the decision making so the use of resources are allocated optimal from a neoclassic economic theory perspective. The neoclassic economic theory perspective have some assumptions of how the world is viewed, which relates to how economic behavior can be explained and how to measure socio-economic value, though the willingness to pay (WTP), principle. With the neoclassical economic theory, the WTP are used to determine the socio-economic value in the socio-economic analysis. I argue that the current way of determining the socio-economic costs in the socio-economic analysis aren’t sufficient to contribute to the development of projects and scenarios that again contributes to the goal in 2050.
With that argument in mind I have develop two ways of changing the current socio-economic analysis. First I identified the barriers that I argue were in the way of achieving a socio-economic analysis which had no elements in it that have any kind of counteracting effect to achieve the goal in 2050. The elements I identified are the excess burden of taxation, discount rate and the CO2 emission costs and in Danish “nettoafgiftsfaktoren”. Though calculations it was identified that if the “nettoafgiftsfaktor” and the CO2 emission cost were changed, so the actual taxes were used instead of the “nettoafgiftsfaktor” and the CO2 emission cost were at 55 kr. pr. ton it was possible in the specific case used, to change the result. The result with the two changes were socio-economic beneficial for the woodchip project in the case, where a CO2- emission cost of 170 kr. pr. ton were needed for the wood pellet project in the case.
Second method I analyzed were the “institutions dynamiske samfundsøkonomiske vurdering (IDSV)” which are developed at Aalborg University. Though this analysis the way of where it were different from the neoclassical approach were described and discussed. With this in mind the “IDSV” showed how it could contribute to the goal in 2050. This analysis purpose is to analyze projects and scenarios contribution to, among other elements, the goal chosen for the “IDSV” analysis, which then are the 2050 goal.
I was not possible to argue for one of my developed methods above the other, where my argument is, that as long as one of them are chosen it would contribute to the goal in 2050 better than the current method.