Sweden takes a whole of society approach to climate policy

Sweden takes a whole of society approach to climate policy

Sweden has consistently been a leader on environmental policy, and now the government has delivered a bold vision of becoming the first fossil-free welfare society. But against a global context of increasing levels of climate ambition there is currently insufficient policy delivery to ensure that Sweden remains in pole position.  As part of our continuing series of articles on climate policy, Mundus International examines current developments.

The end of April brought a flurry of new announcements from the government on climate change policy.  On 22 April, the Minister for Climate and the Environment, Åsa Romson (MP) ,was in New York for the signing ceremony for the Paris Agreement.  Her speech did not introduce any new policies or initiatives, but she continued to make the points that Sweden would be the first fossil-free welfare nation, that the country was committed to this for both moral and economic reasons, and that all actors in Swedish society were participating in the transition. [1]  Although the last point may potentially have been lost amongst the UN audience, we think that observers trying to understand where Sweden is at, need to keep this front of mind, as it explains some of the differences we believe exist with political initiatives in other countries.

In the speech, Ms Romson used 1.5 degrees as the target, a useful signal for where the Government of Sweden stands on ambition.  And she noted that Sweden is committed to leading on climate finance, both as the biggest per capita contributor to the Green Climate Fund, the Global Environment Facility and the Adaptation Fund.  Back at home this week, Sweden is also preparing for future realities in climate finance.  On 27 April, the government announced that it was giving the Energy Agency (Energimyndigheten), together with SIDA and the Environmental Protection Agency (EPA, Naturvårdsverket), a new directive to review appropriate climate finance regimes post-2020[2], when it is expected that the CDM will not exist in its current form.  The Energy Agency’s brief is to consider how climate finance can facilitate technology transfer and the UN’s 17 Sustainability Goals for Agenda 2030.  The Energy Agency will investigate how results-based climate-finance can be deployed together with strong monitoring and verification (MRV) to raise ambition levels.  Also included in the directions are to consider sectoral approaches (e.g. for the cement industry) to reductions and what new forms of global cooperation are needed to stimulate different carbon-reduction instruments.  The report is to be released by October at the latest.

Bonus-Malus

On 29 April, the government released a report[3] by investigator, Petter Classon, on the options available for a so-called, Bonus-Malus system for vehicle owners.  Bonus-Malus, Latin for Good-Bad, could alternatively be described as a carrot and stick approach to vehicle taxes.  The lengthy report, investigated the options for taxing or incentivizing different classes of vehicles depending upon their weight, carbon emissions and type of fuel used.  The report recommended moderate tax increases on average petrol vehicles of around SEK 3,000 per annum, but with penalties kicking-in substantially for ‘gas guzzlers’, that could be as high as SEK 15,000 p.a.  For those prepared to invest in buying an electric vehicle they will receive a bonus of up to SEK 60,000, and with hybrid, or low-emissions vehicles are entitled to up SEK 45,000 of bonus[4].

While the size of the economic incentives may not be sufficient to shift buying decisions by themselves, the study has looked at how the new system will act in tandem with other fuel taxes, and the psychology of decision-making when buying a vehicle.  The report is being circulated as part of a consultation process, with legislation planned during 2017 and a target date for the new system to be introduced in 2018.

A portfolio of initiatives for transport emissions

In a press release also issued on 29 April[5], Ms Romson, pointed to Bonus-Malus as part of a series of initiatives that the government has made to reduce emissions from the transport sector, pointing at the Climate Leap (Klimatklivet) and the Urban Agreement (Stadsmiljöavtal) in particular.  In fact, there are a large number of policy initiatives that have either been introduced, or are under active development, including[6];

  • Klimatklivet – which supports local initiatives, with a budget of SEK 925 million for the 2015-18 period.  Project investment to date has included electric vehicle charging infrastructure, biogas production and biofuels filling stations.
  • Stadsmiljöavtal: SEK 2 billion of funding during this mandate period for cities to make investments in public transport and energy-efficient high-density housing. [7]
  • A carbon dioxide tax, through increases to taxes on both petrol and diesel
  • Incentives for ‘low-level’ blended biofuels
  • Increased budget allocations for railway maintenance
  • Travel free meetings for government agencies
  • A Road Wear tax for Heavy Duty Vehicles, known colloquially as a ‘kilometre tax’
  • Taxes on air travel

Assessing government policy development

How can one assess what is happening in the government’s policy development for the post-Paris era?  This issue is clearly of vital political importance for the government, especially the Green Party.  Measured by the number of press releases, it could appear that a lot is happening.  But, cumulatively, even the flurry of initiatives falls a long way short of an action plan that transforms the Swedish economy by 2045, which is the government’s stated goal.  To put it into perspective, total budget allocations for new policies total less than USD1 billion, and the Bonus-Malus system comes without any headline grabbing messaging.  Compare the government announcement on 29 April to the recent Norwegian policy initiative, which headlined bike superhighways and the intent to eliminate the sale of petrol and diesel vehicles by 2030, creating global attention[8].

In order to develop a view, Mundus International spoke with State Secretary Yvonne Ruwaida (MP) in the Ministry of the Environment and Energy.  We asked her why the short-term political initiatives were relatively minor in relation to the transformational agenda planned.  Ms Ruwaida rebutted this with three arguments.  Firstly, she noted that the government has had to run with the Alliance’s budget, leading to a 6-month delay in action.  Secondly, she pointed to the large number of policy announcements that had been made, including carbon taxation, Klimatklivet, better maintenance for railways, solar and ‘environmental cars’, and thirdly that significant amount of policy was still in the pipeline.  Also, she mentioned the necessity of operating within the EU, which could constrain the pace and extent of policy delivery.  In particular, the government has given considerable powers to the Cross-Party Committee on Environmental Objectives (Miljömålsberedningen), the Riksdag investigation into climate policies.  The political benefits of doing so were strong, as the Riksdag has agreed to produce legislation supported by both sides of the political spectrum.  Nonetheless, this does mean that the government needs to wait until June for the investigation to produce its final report and recommendations.  This may not suit the Greens, who are in the midst of a political crisis.  Its leadership is questioned and Gustav Fridolin and Åsa Romson could be replaced as spokespersons at the mid-May party congress

Nordic Cooperation

Finally, it is also worth noting that Sweden is investing considerable resources and effort an ensuring cooperation with its Nordic neighbours.  On April 27 Åsa Romson participated in a meeting with her peers in Finland.  At the meeting, future cooperation on climate issues was discussed.  A number of initiatives, focusing for example on Nordic experiences on low emission solutions within a wide range of areas will be launched over the coming months.  The meeting produced a joint declaration[9], highlighting three areas of cooperation: mobilising private climate financing, INDC implementation and increasing awareness about climate change and its effects in the Artic.  The Environment Ministers also agreed to investigate possibilities to increase Nordic visibility at COP 22.  Furthermore, the ministers voiced their strong support for the upcoming Second session of the United Nations Environmental Assembly (UNEA2) to be held in Nairobi on 23-27 May. ”Today, it is essential that the United Nations Environmental Assembly (UNEA) and the United Nations Environmental Programme (UNEP) play a significant role in the implementation of Agenda 2030 on sustainable development and in promoting rapid implementation of the Paris agreement”, the Joint Statement to the UNEA read.[10]

Comment

For those impatient to understand the full detail of Swedish plans to become the first fossil-free welfare society, it will be a further wait.  A potential reason for the apparent tardy delivery could be the current political crisis surrounding the Environment Minister and Green Party.  However, it is also possible that this is just the way that Swedish society and politics works.  It takes time to make sure that everyone’s view is heard and achieve consensus.  For Swedish climate policy this means that the Greens will need to wait until the Cross-Party Committee on Environmental Objectives produces its final report in June.  From this point it is expected that the government will have its medium-term (2030) targets in place, which will allow it to demonstrate more credibly that it is in action with the promised transformation.

Postscript: On the day of publication and after this article was written Åsa Romson published an opinion piece in Dagens Nyheter[11].  In the article, as part of her defence of her personal political record she underlined that eight of ten environmental and climate points in the party’s election manifesto are on their way to being fulfilled.  This demonstrates the political importance of the issue to the Green Party, and that their leadership believes that they have delivered by these measures.  However, analysts of climate policy would observe that the two points that have not been delivered; breaking the dependence on oil and a reliance on trucking for freight delivery, are the hardest policy issues to address.  This will require a powerful Environment Minister and a committed government.

[1] http://www.government.se/speeches/2016/04/speech-by-minister-for-climate-and-the-environment-asa-romson-at-the-climate-meeting-in-new-york/
[2] http://www.regeringen.se/pressmeddelanden/2016/04/nya-former-for-klimatfinansiering-ger-starkare-klimatarbete-globalt/
[3] http://www.regeringen.se/contentassets/e38bb79787714469bc0a1a519669cf7a/sou-2016_33-webb.pdf
[4] http://www.svt.se/nyheter/ekonomi/bonus-malus-for-bilagare-pa-gang
[5] http://www.regeringen.se/uttalanden/2016/04/uttalande-av-klimat–och-miljominister-asa-romson-angaende-naturvardsverkets-preliminara-utslapssiffror-for-2015/
[6] http://www.government.se/government-policy/environment/fossil-free-transport-and-travel-the-governments-work-to-reduce-the-impact-of-transport-on-the-climate/
[7] http://www.regeringen.se/debattartiklar/2015/10/nya-stadsmiljoavtal-lyfter-sveriges-stader/
[8] http://www.hybridcars.com/norway-aiming-for-100-percent-zero-emission-vehicle-sales-by-2025/ and http://www.citylab.com/cityfixer/2016/03/norway-bike-highways-billion-dollars/472059/
[9] http://www.norden.org/en/news-and-events/news/nordic-countries-stand-united-in-the-follow-up-to-cop21
[10] http://www.norden.org/en/nordic-council-of-ministers/council-of-ministers/the-nordic-council-of-ministers-for-the-environment-mr-m/declarations-and-statements/joint-nordic-statement-to-the-second-united-nations-environment-assembly-unea
[11] http://www.dn.se/debatt/atta-av-tio-punkter-i-mps-valmanifest-pa-vag-infrias/?mc_cid=c0f53ce835&mc_eid=20355b6523

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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