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The Danish Policy Lab is a collaboration between the Klimaskovfonden and the University of Copenhagen. It aims to better understand how climate projects all over Denmark could be supported through a voluntary carbon market.
The Danish Climate Forest Foundation was established by law in December 2020 with an initial 100 million DKK capital investment from the Danish Parliament. Going forward, the Danish Climate Forest Foundation is raising private funds through the sale of CO2-credits from the projects.
Danish people and businesses can purchase these credits as a way of contributing to the foundation. However, the credits cannot be used in their own climate accounts or to meet their own targets. The foundation has already established a national standard for the voluntary carbon market and enabled private landowners to create new forests.
As part of the MOSAIC Policy Lab, we hope to better understand landowners' motivations for engaging with the foundation and how policies could reduce barriers and enable the foundation to scale up.
The lessons from the Policy Lab will be applied by the foundation and contribute to policy recommendations for upcoming EU legislation such as the EU Climate Removal Certificate.
Drivers of Land Use Change
High-level climate policy is a primary driver with the Danish Policy Lab centred on an ambitious national target: planting 250,000 hectares of new forest. However, local implementation has been hindered by skyrocketing land prices. In Denmark, land is increasingly valued for amenity benefits such as hunting rights, outdoor recreation, and the "joy of ownership" rather than traditional timber production.
A significant barrier is the "permanence restriction" in Danish law: once land is established as forest, it can almost never be returned to agriculture, creating a "lock-in" fear for landowners facing an uncertain economic future. The lab also identified a "crowded policyscape" where different subsidies (e.g., for biodiversity vs. carbon sequestration) compete for the same land, leaving owners confused by overlapping administrative burdens.
The Danish case shows that financial viability is a necessary but insufficient condition for change; success relies on aligning policy with personal motivations.
Next steps
The lab is entering a retrospective phase, looking back at past incentive programs to see which ones actually led to long-term change. Results from recent research will be presented to the Danish Climate Forest Fund (KSF) advisory board to refine strategies for the voluntary carbon market. The lab also plans to develop new planning tools to assist local groups responsible for coordinating afforestation at the local level.