Commentary: Sweden's emissions of carbon dioxide are increasing – how can they go down to zero?
The Swedish government will present a climate action plan before the end of the year. The Climate Policy Council will then evaluate whether the action plan is sufficient to achieve the set goals. In a detailed commentary, KTH researchars Göran Finnveden och Mattias Höjer review the recently released one-man report, made by investigator John Hassler, which forms the basis for the government's action plan. In it, there are many proposals that can support the transition to a climate-neutral society, they write. However, questions remain about increased emissions, negative system effects and distorted cost allocation, as a result of the proposals and investments aimed at reducing climate effects.
The state of knowledge is clear. Continued greenhouse gas emissions lead to continued temperature rises 1. To reach the established global, European and Swedish goals, emissions need to be roughly halved every ten years. Significant emission reductions are required, and they need to happen quickly. The emissions that are happening now will lead to increases in concentration in the atmosphere for hundreds of years to come. It is the accumulated emissions that determine the extent of temperature rise.
Emissions in Sweden have been decreasing for some time, although not rapidly enough to meet the goals. But now, they are expected to increase 2. Last summer, the government appointed a one-person commission (without a secretariat or experts) with John Hassler as the sole investigator. The purpose was, among other things, to develop proposals on how Sweden can meet its commitments at the EU level by 2030 and how Sweden can achieve its climate goals for 2030 and 2045 3.
It is a positive step that national policy is finally aligning EU's binding climate regulations with Swedish goals, even if it should have happened much sooner. It is also good that Hassler is clear that policy should no longer be about why and whether a transition should happen, but rather how it should occur. And that here is no room for reduced ambition in the climate sector.
The report contains 46 proposals 4. Some of the proposals, like establishing a climate cabinet, could be implemented by the government more or less directly. Others are rather vague and would require extensive studies and impact analyses before they can be introduced. One example is the proposal to introduce a new national emissions trading system for the ”ESR area,” which includes emissions from agriculture, machinery, and road traffic. The point of introducing such a system would be to ensure Sweden meets the binding commitments related to emissions in the ESR area.
The trading system would then be a way of distributing Sweden's commitments between different parts of the economy. The proposal for a national trading system is interesting, but also risky. The consequences would probably be difficult to see because the price of emission allowances would be greatly affected by factors beyond the control of the sectors involved in trading. This complexity risks sending unclear signals, especially to the agricultural sector, instead of providing the clarity Hassler seeks. The question of what Sweden can do to reduce emissions in the ESR area before a new trading system could be in place also remains. There may also be a risk that investigations into the new system are used as an excuse to delay action.
One of the more contentious areas concerns the climate target for the transport sector. Instead of proposing measures to achieve the goal, Hassler suggests revising the target to remove specific emission levels. He argues that sectoral targets are irrelevant since EU’s binding regulations will determine the emissions’ size. According to Hassler, emissions from the transport sector will decrease by a similar magnitude, whether the goal is kept or not. In that case, we believe that it is unnecessary to remove the target because it creates a debate unrelated to what needs to be done to achieve emission reductions.
Instead of the current transport target, it is proposed that a new target be developed that has the electrification of the transport sector in focus. There is a broad consensus that electrifying the transport sector is an important strategy to reduce climate emissions and other pollutants harmful to health. However, research, including studies at KTH, indicates that electrification alone is insufficient 5. In line with KTH's research, Hassler has an interesting proposal to use economic incentives to favor electric cars with small batteries instead of large ones.
This proposal is wise both in terms of distribution and resource efficiency. However, the primary goal of electrification appears to be industrial policy. Hassler does not suggest that Sweden should introduce a goal to promote the development of domestic biofuels, but only proposes that “good conditions for industrial production of biofuels and synthetic e-fuels” should be created.
Hassler believes that the current EU legislation will require high prices for petrol and diesel. Although Hassel does not address this in any of his 46 proposals, he still writes that the price of vehicle fuels needs to increase through political measures. This can be considered Hassler’s 47th proposal. It will be interesting to see how the government handles this proposal, which clearly contradicts current ambitions to lower fuel prices.
Last year, a unanimous Environmental Goals Committee with all eight parliamentary parties proposed that Sweden should introduce consumption-based climate goals in addition to the current territorial goals 6. Consumption-based emissions include all emissions related to the production of what we consume in Sweden, regardless of where in the world the emissions occur. For wealthy countries like Sweden, consumption-based emissions are often larger than territorial emissions.
One of Hassler’s proposals in his report is that consumption-based goals should not be introduced. In KTH's response to the Environmental Goals Committee’s report 7, we supported the proposal to introduce consumption-based emission goals, among other things, because it allows for measures at various levels in society to reduce emissions that are currently not subject to effective control. Examples include emissions from intercontinental flights and meat production in South America. Although Hassler suggests that Sweden should work for continued reductions in EU’s consumption-based emissions, we believe it is reasonable to formulate a goal related to Swedish consumption that also covers emissions outside the EU.
Perhaps the most important proposal for eliminating greenhouse gas emissions is number 38, which suggests that Sweden should have a goal to promote ambitious climate policies at the EU level. This is a good idea and needs to be supplemented with clarity about how Swedish EU parliamentarians act on climate policy issues, and how Sweden will advocate ambitious climate policies at the EU level.
As Hassler notes, we are facing a major transformation and restructuring. Such changes will require many new investments in electricity grids, electricity production, new production methods for steel and cement, electric cars, and more. Hassler's report is quite limited when it comes to commenting on the greenhouse gas emissions resulting from all these investments. Previous calculations in the transport sector indicate that it is not possible to manage the transition without reducing traffic, partly because the production of large numbers of electric cars would require a disproportionately large share of emission allowances. This issue of the emissions budget, limiting not only direct emissions but also those from investments, needs to be discussed much more. It is very possible that the outcome will be that the total production volume in many different areas will need to decrease, at least until the entire society shifts to carbon neutrality.
Hassler proposes that Sweden should reduce its own reduction requirement by fully utilizing the so-called flexibility mechanisms within EU’s climate legislation. Specifically, Hassler suggests that Sweden ”pays for other countries to take actions that reduce emissions,” that Sweden buys emission allowances within the ESR system, and transfers emission allowances from the current European emission trading system to the Swedish ESR sector. The reason for these three proposals is the same – to make reductions where they are cheapest. This is a good reason, but at the same time it is important to see that all these three proposals are about shifting the costs of the transition from those that cause emissions in the Swedish ESR sector (mainly agriculture and transport) to the Swedish taxpayers. This weakens the policy instrument. To the extent that agriculture and transport need to be protected, it should be possible to find ways to invest the money the state would invest in the flexibility mechanisms, in ways that at the same time lead to reduced emissions in agriculture and transport.
An important message in Hassler's investigation is that Sweden needs to introduce more measures to reduce climate-impacting emissions. The current measures are not enough. The report contains many proposals that could move us in that direction, but much work remains. Before the end of the year, the government is supposed to present a climate action plan. It remains to be seen if it will contain sufficient measures to address the increasing emissions, or if the government continues to postpone Swedish commitments at an increasingly higher accumulated cost for both the environment and the Swedish economy.
At the beginning of next year, the Climate Policy Council will evaluate whether the action plan is sufficient to achieve the set goals. Meanwhile, global temperatures continue to rise.
Göran Finnveden
Professor of Environmental Strategic Analysis
Department of Sustainable Development, Environmental Sciences and Engineering, KTH
Mattias Höjer
Professor of Environmental Strategic Analysis and Futures Studies
Department of Sustainable Development, Environmental Sciences and Engineering, KTH