It’s that time of year again – not only for the winter holidays. The Danish Social Democratic administration, along with four smaller parties, reached a deal on the 2020 budget, the first one since the election that brought them to power in June. Since Denmark is one of the few remaining European countries with a left-leaning government in power, it is noteworthy as a barometer of what is possible for the welfare state these days.

More social services and taxes
Here are some of the main features of the agreement: 

• Increased funding for staffing at day-care centers, for hiring additional nurses, for psychiatric services, for schools, and for green initiatives such as the removal of duties on electric cars. 
• The termination of fees for instruction in Danish for foreigners, of a strict residence requirement for unemployment benefits for foreigners and Danes who have lived abroad, and of the “education ceiling,” a limit to one degree that had been intended to get dilatory college students into the workforce faster. 
• A resumption of the policy of accepting “quota refugees.” 

These measures will be financed by increases in taxes and duties on cigarettes, plastic shopping bags, estates, property registration, gambling, aircraft, and leased company cars and by a termination of tax deductions for work telephones and favorable treatment of parents’ purchases of apartments for their children.

The government needed the support of all the left-wing parties, so the crux of the negotiations was concessions to their demands. The increase in day-care staffing was controversial because it will result in higher user fees (DK) since parents usually end up paying 25 percent of the costs – an extra $200 to $400 per year in this case. The perception was that voters were willing to pay for more welfare as well as for more “humane” treatment of refugees and immigrants after the Liberal Party’s infamous series of restrictive measures.

Democracy in action
The right-wing opposition voiced its usual objections that higher spending and taxes, particularly for benefit of foreigners, will hamper business and the property market. Others complained that the green initiatives are too modest and that while domestic funding was increased, contributions to international collaboration were not.

Altogether the budget appears fairly typical of center-left initiatives that are intended to compensate for or undo the excesses of the preceding center-right administration. The Social Democrats have moved rightward in recent years, especially on immigration, and these measures represent only an incremental adjustment, not a realignment. The far Left wanted to avoid a further increase in wealth inequality, and the centrist faction wanted to avoid a net loss of jobs. The budget apparently does not quite fulfill either of these wishes, which is perhaps a sign of a fair compromise. Social services should improve somewhat, economic growth is likely to slow somewhat, and in a few years the country will probably be willing to let the pendulum swing back in the other direction.

Tackling climate Armageddon
The budget agreement was swiftly followed by the adoption of a historic climate bill (DK). It stipulates a 70 percent reduction in greenhouse gas emissions from the 1990 level by 2030 and carbon neutrality by 2050. It was hailed as a model program ready just in time for the COP meeting in Madrid next week. It was endorsed by all the parties in Parliament except for the two smallest right-wing parties, partly because it didn’t contain provisions for maintaining jobs. A crucial factor was an agreement on setting binding intermediate targets in the individual years from 2025 until the overall target dates. 

There were no details about how this reduction will take place, however. That is to be determined by a broad majority of Parliament next spring, with recommendations of concrete measures from the Climate Panel. Those measures (DK) are likely to include a transition from fossil fuels for transportation to electricity and biofuels, more wind turbines and solar energy panels, less use of natural gas, better insulation in older homes, and changes in agriculture that will result in lower meat consumption and food waste.

Progressive landmark or worse than useless?
The initiative did not escape criticism. The targets were called misleading because they covered only domestic production and not emissions from imported goods. The Skeptical Environmentalist, Bjørn Lomborg of Copenhagen Consensus, maintains that the expensive plan will have a negligible effect on the climate (DK). The 70 percent reduction alone, which will cost DKK 842 billion ($125 billion), will reduce global warming by only one ten-thousandth (that’s 0.0001) of a degree in 80 years. Lomborg argues, as he has contended before, the money should be spent instead on research and development on alternative energy sources in order to help reduce emissions in the largest developing economies, particularly China and India. 

Lomborg’s critique implies that the new law is merely a form of national virtue signaling. Denmark has had a rationale for such symbolism, though. Its politicians are well aware that it is far too small to have a significant effect on global trends by itself and have therefore sometimes argued that its achievements could serve as inspiring models for others, as formerly when it topped the list of foreign aid contributors. But if these are merely stopgap measures and a waste of resources, then it’s not even sending a good signal. Lomborg has often been dismissed out of hand by climate activists, but he’s not a denier and his position should be addressed directly.