Sweden forges ahead following COP21

Sweden forges ahead following COP21

In our January edition of the Monthly Policy we said that we expected Sweden’s government to announce a range of new initiatives to build on the perceived success of COP21. Our view was that this would be a logical outcome, given that the climate is a signature policy for the Greens, who need to demonstrate the results of being in government. However, it is also a natural extension of not only Sweden’s pro-environment philosophy but also the government’s trade, industry and aid strategies.

Sweden to have no net emissions by 2045

The Reinfeldt government established a Cross-Party Committee on Environmental Objectives (Miljömålsberedningen) in 2010.[1] In 2015, the Löfven government updated its mandate, and appointed Anders Wijkman (KD), as its’ chair.  Mr Wijkman, a former MEP, with considerable experience in environmental and humanitarian issues[2], was a clever choice for a government seeking consensus and an aggressive policy.  The committee’s mandate included a direction to report back by February, 2016, on how a ‘climate policy framework for a long-term climate policy could allow for a broad political dialogue, producing stability and clarity while moving towards a long-term climate objective’[3], … highlighting Sweden’s ambition to take the lead in climate adaptation.

On February 10, the Cross-Party Committee on Environmental Objectives announced that its recommendation was for Sweden to target zero net emissions by 2045.  The announcement was significant because it meant that an agreement had been reached between 7 of the 8 Riksdag parties (the Sweden Democrats did not participate) in a time of otherwise fractious politics.

In the announcement, which was communicated via a DN Debatt article[4], the 7 members of the Committee on Environmental Objectives, said that they were looking to send ‘a clear signal to industry, municipalities and regions, as well as to citizens of the long-term rate policy … regardless of the government’.  Internationally, their ambition was for ‘Sweden to be a leader by demonstrating that economic growth and jobs can be combined with an ambitious climate policy’.  The members of the Committee presented two proposals that they hoped the Riksdag would agree on.

  1. No net emissions by 2045, being composed of an 85 per cent reduction in GHG emissions compared with 1990 levels, combined with carbon-sinks for the remaining 15 per cent (e.g. CCS , emissions trading)
  2. A Climate Change Bill that clarifies the processes and targets of climate policy, with the government of the day presenting its action plan for the term.
    The Committee also proposed that the government set up an independent Climate Policy Council (klimatpolitiskt råd), modelled on the Fiscal Council, to provide a second opinion on policies.

Observers point out that the announcement is more about the politics than the science.  The Left and Centre Parties had argued for a complete phase-out by 2040, whereas other parties had targeted 2050, and a 70 per cent reduction of emissions.  Hence, the final agreement merely represents a compromise, and is not a position that links to any of the UNFCCC targets.  Nonetheless, as it is both extremely aggressive and open for revision (i.e. the targets can be brought forward), the messaging is clear.

The ambitious targets recommended by the Committee on Environmental Objectives gained praise from the Haga Initiative[5], a low-carbon lobby-group of large corporates, who actually want an even stronger position.  However, the decision is contentious for other sectors of industry, with the Confederation of Swedish Enterprise (Svenskt Näringsliv) heavily criticising the position[6].

The Committee on Environmental Objectives will present two reports; an interim report in March, leveraging off the announcement already made, and a final report, to be published in June of this year.  It is expected that the committee will recommend that the government present a Climate Law to the Riksdag for approval.

Sweden may also have a CCS Strategy

One consequence of the proposals by the Committee on Environmental Objectives is that Swedish process industries, such as steel-making need a viable alternative if they are not to prepare for their own demise by 2045.  CCS, or Carbon Capture and Storage underground, is one of the few options available.  Sweden has been working with the assumption that CCS would be developed through EU-solutions.  However, the recent history of CCS has been one of project cancellations and withdrawal of subsidy support.  This is due in large part to the excessive costs of CCS, but perhaps it is also a reaction by European politicians to the falling costs of renewable energy, making ‘clean coal’ fired generation with CCS less necessary.   However, as Anders Wijkman stresses, Sweden needs CCS as an ‘emergency exit for industry’. Åsa Romson also seemed to agree with this position, saying that ‘CCS is a technology that “of necessity” is interesting to look at’[7].   Mr Wijkman observed that this would require state support to develop the industry, which experts estimate will cost billions of kronor.

Nordic cooperation post-COP21

At its January meeting the Nordic Council decided to seek increased cooperation between the Nordic parliaments for implementation of the Paris Agreement.  The Nordic Council plans to invite relevant committees from the national parliaments to a dialogue about parliament’s role in forming future climate policy.  The Nordic Council also encouraged the countries to upgrade their NDC (Nationally Determined Contribution, or ‘promise’ under the Paris Agreement) by 2018.  The Nordic Council of Ministers has also asked Council working groups to propose next steps for climate change follow-up.[8]

Joining the dots

The announcements by the Committee on Environmental Objectives add further definition to Sweden’s position on climate change.  In last autumn’s budget the government made a number of new expenditure commitments, including;

  • SEK 225 million to incentivise solar cells (increasing to SEK 390 million p.a.)
  • An additional SEK 500 million in climate financing for developing countries
  • SEK 100 million for measures to promote cycling
  • SEK 62 million for cleantech growth companies
  • Electricity storage; SEK 25 million
    which came on top of significant investments in the so-called Climate Leap (Klimatklivet), a SEK 600 million p.a. package of support for regional government to tackle climate change. In total, the government says that it has allocated SEK 4.5 billion in 2016[9] towards climate policies.

These investments and the new long-term goal support the government’s rhetoric of becoming the first ‘Fossil-Free Welfare Country’.  Ministers have now begun a series of deep engagements with various sectors of the community.  On February 8th, Åsa Romson met with 150 different enterprises, municipalities, regions and organisations to communicate the vision and attempt to build a shared agenda.  And on February 10th, the day of the Committee on Environmental Objectives’ announcement, three cabinet ministers: Romson, Kristina Person (S) the Minister for Strategic Development and Nordic Cooperation and the Minister for Financial Markets, Per Boland (MP) participated in the Climate Forum[10], alongside Mr Wijkman, State Secretary Yvonne Ruwaida (MP) and a number of other leading Swedish and European figures.  Discussion topics included the decarbonisation of transport industries, using a ‘management by objectives’ approach to GHG, investment in research and innovation and the behavioural changes required for deep decarbonisation[11].  It can therefore be concluded that Sweden is now in the middle of a national discussion about its approach to climate change.

Comment

As we have written on previous occasions, Mundus’s analysis is that support for low-carbon policies is widespread and deep across the community, and that politicians and governments from across the political spectrum will drive this agenda ahead, supported by the bureaucracy, and industry, albeit with some sectors having concerns about being out-of-step with the rest of the world.  Generally this also makes sense for Sweden economically, as it is a free-trading nation with advanced industries and a talent for innovation.  It has its eyes on the prize of being a cleantech leader, and, in the absence of new information that disturbs this consensus, will set and advance a stable series of policies.

[1] http://www.miljomal.se/Environmental-Objectives-Portal/Undre-meny/Who-does-what/All-Party-Committee-on-Environmental-Objectives/
[2]http://www.unep.org/resourcepanel/PanelMembers/AndersWijkman/tabid/1060040/Default.aspx
[3] http://www.government.se/articles/2015/08/remit-on-a-climate-policy-framework-for-sweden/
[4] http://www.dn.se/debatt/tidigarelagg-svenska-klimatmalet-till-2045/
[5] http://www.svd.se/svd-avslojar-nytt-klimatmal–nollutslapp-i-sverige-ar-2045/i/senaste?mc_cid=7ee676ec44&mc_eid=839e45d157
[6] http://www.svensktnaringsliv.se/fragor/miljo-energi-klimat/missriktad-svensk-politik-riskerar-oka-utslappen-globalt_639793.html
[7] http://www.altinget.se/miljo/artikel/ccs-ar-nodvandigt-om-man-ska-naa-klimamaalen
[8] http://nordicway.org/
[9] http://www.government.se/articles/2015/09/investments-in-climate-change-adaptation-and-energy/
[10] http://miljoaktuellt.event.idg.se/event/klimatforum-2016/
[11] http://www.government.se/articles/2016/02/fossil-free-sweden-working-together-is-the-key-to-success/

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Sean is responsible for Mundus’ strategy and commercial activities. He began his career in the oil industry Australia. After working internationally in commercial roles with BP in South Africa, the UK and Singapore he moved to Sweden with his family in 2009. He worked in business development and then as the Strategy and Growth Director for NASDAQ Commodities from 2009 to 2015. Sean holds an engineering degree from Adelaide University and an MBA from the Darden Business School at the University of Virginia. He blogs about energy and innovation at www.renovamus.com