There is certainly much to be said for Denmark’s leadership in green energy. While North American carbon emissions have risen by around 30 per cent since 1990 (the reference point for the Kyoto Accord), Denmark’s emissions are actually lower than they were two decades ago. That’s generally ascribed to the fact that a world-leading 20 per cent of the power generated in Denmark comes from wind.

Less commonly known is the source of the other 80 per cent. I was surprised to discover that it comes from good old King Coal. In fact, coal’s share of power generation in Denmark’s power grid is basically the same as it is in China.

Since green energy technology accounts for 12 per cent of the country’s exports, I can understand why Denmark wants to showcase its wind turbines instead of its smokestacks. But it’s power from those smokestacks that turn on the lights in Copenhagen, at least for the most part.

How, then, has Denmark been so successful in managing its carbon emissions? The answer lies not with the source of power, but with the price of power. At 30 cents per kilowatt hour, electricity costs anywhere from three to five times what the average North American would pay. And, not surprisingly, Danish households consume a fraction of the power that we do.

But I bet if you charged 30 cents per kilowatt hour for power in coal-burning states like Wyoming and West Virginia, they, too, could cap their emissions, and without having to install a single wind turbine.

The other reason commonly cited for Denmark’s success at carbon management is cars—or, more precisely, the lack thereof. Nearly everyone in Copenhagen seems to be riding a bicycle. At first I thought this was testament to the environmental consciousness of the populace, or at a minimum, to a commitment to physical fitness. Then I checked out what it costs to buy a car.

Depending on how many horses are under the hood, Danish car buyers pay a tax ranging anywhere from 100 to 180 per cent of the sticker price of the vehicle. In other words, when you purchase a car in Copenhagen, you can pay almost as much as if you were buying three cars in North America. At that tax rate, I’d be riding a bike too.

What I learned from my trip to Copenhagen is that you don’t have to be a world leader in green energy technology to cap your carbon emissions. Just charge 30 cents per kilowatt hour for power, and slap a 180 per cent surcharge on vehicle prices. Consumers will do all the rest.

Take steel, for example. The mass migration of North American steel production to China certainly hasn’t lessened the industry’s global environmental footprint. If all steel plants emitted equally, it wouldn’t matter where they were located. But when it comes to full-cycle carbon emissions, all steel plants are decidedly not equal.

While China may boast some of the world’s newest and most energy-efficient steel mills, it houses a whole lot more plants whose energy-efficiency is a fraction of that of steel plants that have been shuttered on this side of the Pacific. Moreover, virtually all steel mills in China are serviced by coal-fired power—which is far and away the dirtiest form of generating power. (Coal is 80 per cent of China’s power, compared to 50 per cent for the US and only 12 per cent for Canada). Combine the gap in energy efficiency between Chinese and North American steel mills with the greater carbon intensity of Chinese power and, on average, the plants where world steel production has migrated emit one third more carbon than the plants it left.

So it’s not just about trading clean air in Pittsburgh for foul air in Beijing. The global steel industry would have emitted significantly less than it does had not so much of its production moved to China’s blast furnaces. In fact, this is true not only of the global steel industry, but of most of the heavy manufacturing that has crossed the ocean in pursuit of cheap labor.

You get some sense of the scale of the emissions trail that has accompanied this shift in economic geography when you consider that the emissions coming from China’s export sector alone are greater than the total emissions from any other economy other than the US’s.

Of course, much of that trail could be wiped away by pricing carbon emissions and applying that price to imports via a carbon tariff. Competitiveness in the steel industry and a whole range of other industries wouldn’t simply be a single-variable function of wage rates anymore, but a more complex function that includes energy efficiency and carbon intensity. And the higher the price of energy and carbon, the greater their impact on steel production costs. Instead of exporting jobs away, raising the carbon bar would bring more than a few home.

The knock against tariffs, of course, is that they distort trade. But trade is even more distorted when environmental costs are allowed to simply go unpaid.

It might have been fun exposing overzealous claims about the imminent demise of the Himalayan glaciers, but it seems no one is laughing about global climate change now. And with good reason.

According to a recently released study by NOAA (the National Oceanic and Atmospheric Administration), during the first six months of 2010, the combined ocean and land temperature was the hottest on record. This summer is continuing the record-setting trend. And just in case you thought this year might be an anomaly, the warming trend so far is consistent with what NOAA has found over the last decade across no less than 10 measures of global warming, running the gambit from land and sea temperatures to the decline in Arctic sea ice.

Every year seems to furnish us with more and more graphic images of global climate change. And yet, other than the temporary reprieve we got during the world’s deepest post-war recession, there seems to be no let-up in the growth of global carbon emissions.

Of course as long as emissions don’t cost anybody anything, why would we expect any halt in emissions growth? After all, the engine of global economic growth still runs on burning coal and oil. And we’re certainly no closer to putting a price on carbon emissions today than we were before the much-anticipated global environmental summit in Copenhagen last December.

With most emerging market economies dreaming of emulating China’s carbon-spewing industrialization, don’t expect any multilateral breakthroughs on global carbon management anytime soon. Nor should we, given the huge disparities in energy consumption per capita between the developed and the developing worlds.

But at the same time, we are no closer to seeing any unilateral steps to price carbon on the part of wealthy emitters like North America, for example. Carbon legislation is effectively dead-ended in Congress with the Waxman-Markey bill unable to pass in the Senate, while legislation isn’t even on the drawing board with the Canadian federal government. Like China, North America fears huge adverse economic consequences from pricing the carbon it emits into the atmosphere.

As a result, carbon emissions continue to pose no cost to our economy. Unfortunately, it’s becoming harder and harder to say the same about climate change.

There’s a reason for the fact that, for a given amount of energy, natural gas prices today trade at a fraction of the price of oil. If people could just switch from using one fuel to the other, that price gap would quickly be arbitraged away. But they can’t—at least not where it counts the most.

Not that there hasn’t been scope for substitution. Few households in North America still burn oil to heat their homes—most switched to much cheaper domestically produced natural gas after the OPEC oil shocks of the 1970s. Even fewer North Americans rely on burning oil to generate power for their homes. And most petrochemical producers can switch from oil to a natural gas feedstock.

But unfortunately, the majority of oil consumed in the United States—and indeed in the rest of the world—is used as a transport fuel. On average it’s about 60 per cent of all the oil consumed, and as much as 90 per cent of each new barrel that comes out of the ground. And that’s exactly where prices for oil and natural gas disconnect.

Planes fly on jet fuel made from oil, ships run on bunker fuel made from oil, and, most importantly, motor vehicles run on gasoline or diesel made from oil. And with good reason: oil packs about four times the energy density of natural gas. And it carries about 20 times the energy density of the lithium-ion battery found in an electric car.

That’s a key reason why neither electric- nor natural gas–powered cars have made any sizeable inroads into the North American vehicle market. The 110,000 or so natural gas–powered vehicles in the US, most of them urban buses, remain an insignificant fragment of a 250 million-vehicle market. And the story isn’t any different with electric powered cars: GM doesn’t expect to sell more than 10,000 of its heralded Volt next year.

Another reason is the absence of a fuel distribution system. Outside of urban centers, there are few gas stations that supply natural gas, which means that, at best, the fuel can only be used for urban commutes. To build a national distribution system for the fuel would require subsidies that far exceed anything already squandered on encouraging home-grown ethanol production.

Switching to natural gas is no more attractive an alternative for most American motorists right now than switching to corn-based ethanol or electric power. And until it is, expect natural gas and oil prices to stay disconnected, leaving the American economy as dependent as ever on foreign oil suppliers.

The Enbridge leak in Michigan is a poignant reminder of the thousands of miles of pipeline that crisscross North America. The Kalamazoo spill is not the first pipeline to burst on the continent, nor will it be the last; spills are a fact of life in the business. But this one may have broad implications for the future of tar sands production.

The company’s grandiose plan to build the Northern Gateway, a 900,000-barrel-a-day pipeline from the Alberta tar sands to the BC coast for transoceanic shipment to China, is now in jeopardy. Watching cleanup crews scrambling to contain the spill in Michigan probably doesn’t endear Enbridge to British Columbia residents, who are being asked to accept the proposed pipeline in their own backyards. Enbridge’s only consolation is that its spill is likely to be equally damaging to the chances of its competitor TransCanada’s getting approval from US regulators to build its contentious Keystone XL pipeline, which would bring tar sands crude to US markets.

With oil spilling all over the place these days, natural gas should never have looked more appealing. But, as Josh Fox’s recent documentary, Gasland, vividly illustrates, the environmental challenges are no less daunting in that industry. Just as depletion has forced oil companies to take on greater and greater environmental risks, so has it affected North American gas producers. Shale gas, heralded by Boone Pickens and others as the answer to America’s future energy needs, leaves just as heavy an environmental footprint.

Not only does fracturing shale rock require an enormous amount of water (similar in that respect to tar sands), but it uses a toxic cocktail of chemicals to do the job. And those chemicals (as much as 80,000 pounds of them to fracture a well) have a nasty habit of turning up in the local groundwater. As much of 70 per cent of the chemical solution that is injected for shale fracturing stays in the ground.

But, fortunately for shale gas companies, producers can contaminate groundwater with impunity. Hydraulic fracturing, the process of tapping shale gas, was exempted from the Safe Drinking Water Act in 2005 in the interests of promoting American energy independence. Thanks to that exemption, and the environmental practices that it engendered, residents who live on top of the Marcellus Shale formation, for example, can actually light their tap water on fire.

The ability of new technology to unlock previously inaccessible hydrocarbon deposits in deep water, tar sands, or shale rock is beyond dispute. But so, too, is the staggering environmental cost that comes with our ever-increasing dependence on them.