Tom Friedman’s column on Denmark and energy policy over the weekend tried to get at a difficult to express point. Roughly speaking, in America when energy gets expensive quality of life declines. And Denmark has adopted policies that make energy expensive. Ergo, you might conclude that in Denmark quality of life is low. But in fact, Denmark is a rich and happy society in which people enjoy a great quality of life. The reason is that cheap energy over a prolonged period of time doesn’t buy you happiness — it buys you infrastructure that’s adapted to wasteful use of energy.
Denmark, by contrast, some time ago adopted policies aimed at promoting energy efficiency and conservation and, consequently, has an infrastructure that’s well-adapted to energy being expensive. Not only does that make Denmark greener than the United States but it also makes Denmark much less vulnerable to energy supply shocks than the United States is. In America, though, energy companies have traditionally had a lot of political power and the general thrust of our policies is to encourage lavish energy consumption and thus we have a waste-friendly infrastructure. I might add to what Friedman says that while converting to a more efficient model would certainly cost money in the short-run, that you ought to put this in the perspective not only of climate change but also of how much of our (costly) foreign policy is driven by a desire to avoid energy price shocks.
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