Low Carbon Emissions in Denmark

Last semester I studied abroad in Copenhagen, Denmark. Copenhagen is well known as being a very bike friendly city, where half of its residents bike to and from work everyday. People even refer to Danes as the "Biking Vikings". The main motivation for biking in the city is to reduce pollution from cars. In fact, Copenhagen wants to become the first carbon neutral capital in the world by 2025. In order to reduce the negative production externalities of vehicles, Denmark placed a very high tax on owning them. Recently, Denmark has decided to cut taxes on the cheapest cars from 105% to 85%. 

Although Denmark's government was involved in reducing the externality, Coase would argue that clear property rights should allow parties to negotiate an effecient level of cars and pollutants in the city. However, the assignment problem of deciding who specifically is being hurt by the pollutants and how much they are value would bring about issues to his theory. From what I witnessed, Danes were very enthusiastic and willing to bike everywhere, even in cold and windy weather. Many bike stores even offered student deals so we could rent our own bikes for the semester. This allowed me to join the Danes in the bike lane.