Carbon tax, not subsidies: three decades of danish economic council advice against green industrial policy

Economic expertise influences climate policy through various institutional channels, including academic research, think tanks, government offices, and councils. National economic councils are particularly relevant because close to political realities and accepting politically defined climate and environmental goals. Based on a systematic analysis of their publications, we find that the Danish Economic Councils (DEC) have consistently opposed all forms of support for green energy (wind power) in favor of a single and allegedly market-efficient policy instrument—a uniform and universal carbon tax. This constant policy advice spans three decades of changing technological, institutional, political, and economic context. Our analysis reveals the policy advice to be heavily theory-driven and negligent of uncertain, dynamic, and strategic aspects of innovation, politics, and markets. We suggest that policy advise on climate and environmental transition should contrast the idea of optimization with a perspective on political strategy.