Report 2024

Download the report

Report of the Swedish Climate Policy Council 2024

Summary

The state of the climate – cause for concern and hope

Increasing levels of greenhouse gases in the atmosphere have thrown the Earth’s climate system out of balance, driving a rise in average global temperatures. The year 2023 was the warmest ever recorded on Earth, with an average temperature of 1.4 degrees above the pre-industrial average. The environmental, social and economic consequences of climate change are becoming increasingly apparent.

Some future changes to the climate are inevitable and potentially irreversible. However, they can be mitigated by substantial, rapid and sustained reductions in emissions. But time is of the essence. For every additional tenth of a degree of warming, the negative impacts increase. Since it is mostly accumulated carbon dioxide emissions that determine our future climate, emissions must be quickly reduced. The UN’s Intergovernmental Panel on Climate Change (IPCC) estimates that global emissions need to be reduced by 43 percent by 2030 compared to 2019, and reach net-zero emissions by the middle of this century if the goals of the Paris Agreement are to be achieved.

Despite new record levels of global greenhouse gas emissions, 2023 also provided some cause for hope. There are indications that global emissions of carbon dioxide may peak around 2025. This is mainly because global investments in renewable energy, electricity grids and energy efficiency have far exceeded investments in fossil-based energy for several consecutive years. Moreover, during the Swedish Presidency of the EU in the spring of 2023, most elements of the Fit for 55 package were also finalised, putting the Union on course to reduce net emissions by more than 55 percent by 2030 compared to 1990. What remains now is implementation. Evaluations show that virtually all EU member states need to tighten their policies in order to achieve the EU target for 2030. At the same time, the EU has started discussions on adopting a new, more ambitious climate target for 2040, which will form the basis for the EU’s new commitment under the Paris Agreement. 

Government policy in 2023 will increase Sweden’s emissions

At the same time as the Swedish government in the EU is involved in making decisions on higher ambitions and stricter policy instruments, the national policy that the Government has decided on thus far means that greenhouse gas emissions in Sweden will increase significantly in 2024. In the budget bill for 2024, the Government used more financial reform space on decisions that counteract the possibilities of achieving the climate targets than on initiatives that help to achieve the climate targets.

The action plan does not live up to the Climate Act and lacks specificity

On 21 December 2023, the Government presented Sweden’s second climate policy action plan. According to the Climate Act, it must be submitted to Parliament the year following parliamentary elections and include a description of what additional measures or decisions are needed to achieve the climate targets. 

The action plan spans several policy areas and contains many ambitions for setting the course for reaching all the way to net-zero emissions by 2045. It also describes Sweden’s role in European and international climate efforts. However, the action plan lacks specificity and provides few answers as to how the Government intends to develop policies to reduce emissions and achieve the climate targets during its term of office.

The action plan does not meet the requirements of the Climate Act. To a large extent, it lacks emission forecasts for adopted policies and timeframes for planned actions, and disregards the national interim targets for 2030. Instead, the action plan announces that these objectives will be review. However, a future inquiry does not relieve the Government of its responsibility to present a plan for achieving the current climate targets set by Parliament. We believe that a review of the 2030 targets will not make a significant practical difference for policymakers and stakeholders – instead, it will fuel a period of heightened uncertainty.

The action plan heavily focuses on fossil-free electrification, particularly on new nuclear power reactors in Sweden, which is described as the single most important effort for achieving net-zero emissions. The three other key areas for the climate transition previously identified by the Climate Policy Council – a more efficient use of energy and resources, biomass from forestry and agriculture, and carbon capture and storage – receive less attention. In particular, the Government plans few initiatives for more efficient energy use and a more circular, resource-efficient economy. The same is true for increased carbon dioxide uptake in forests and land, despite the fact that Sweden has a specific ambitious EU commitment in this area. The action plan presents more specific policies for carbon capture and storage technology, both from fossil-based and biogenic sources (CCS and bio-CCS).

The action plan is insufficient for achieving climate targets and commitments by 2030

In the time perspective leading up to 2030, the action plan focuses on Sweden’s commitment in the EU’s effort sharing regulation (ESR). Under this commitment, Sweden is to reduce emissions in line with an emissions budget by 50 percent by 2030 compared with 2005. But the answer to how this commitment is to be achieved is being deferred to an inquiry, and in practice to the next term of office and the next government.

According to the Government’s action plan, emissions will remain at elevated levels throughout the current term of office. Since necessary decisions are postponed, emissions will have to decrease even faster during the next term of office (2027–2030) if Sweden’s climate targets and EU commitments for 2030 are to be achieved. In addition to increasing emissions in the short term, there is a risk that postponing the measures will affect the acceptance for climate policy, for example, through higher fuel prices than would otherwise be necessary during the next term of office, or through compensation of the lack of emission reductions in the transport sector with agriculture and forestry measures.

The Government gives a misleading picture of “all the way to net zero”

The action plan gives a lot of attention to the long-term climate goal of reaching net-zero greenhouse gas emissions by 2045 at the latest, and negative emissions thereafter. We welcome the fact that all parliamentary parties now support this long-term goal, and that the emissions gap to 2045 has narrowed in recent years.

In its budget bill for 2024, the Government estimated that there was an emissions gap by 2045 of around 20 million tonnes of greenhouse gases, including supplementary measures, with the policy adopted so far. In its climate policy action plan, the Government states that the plan creates conditions for achieving net-zero emissions and presents an emissions scenario in which the 2045 target appears to be achieved. However, in our assessment, the action plan does not outline how this scenario can be realised and how the previously stated emissions gap can be closed.

Acceptance and cost-effectiveness are both present and absent from the action plan

We share the Government’s view that there must be acceptance for and engagement in the climate transition in order to implement policy. However, the need for acceptance must not become an argument for pausing the transition. On the contrary, the Government needs to pursue building acceptance and engagement now to facilitate the transition going forward.

The action plan lacks specific assessments of the cost-effectiveness of the announced policy, which means that “cost-effectiveness” is mainly used rhetorically and not as an analytical tool. In many cases, the Government lacks sufficient evidence to claim that the planned policy is more cost-effective than any other policy.

Cost-effectiveness and acceptability are both essential perspectives in the formulation of climate policy. On the other hand, it is not a given that increased cost-effectiveness leads to increased acceptance, or vice versa. For example, the Government has lowered taxes on fossil fuels with reference to weak acceptance, even though the carbon tax on petrol is normally regarded as a cost-effective policy instrument.

A risky path for Sweden’s climate transition

In the Climate Policy Council’s overall assessment, the action plan not only lacks specificity but paves the way for a risky path for Sweden’s climate transition. In addition, the central transition issues are largely dealt with in reverse chronological order: The necessary decisions that must be taken during this term of office are being put off for new future inquiries. Major long-term reforms that require investigation will begin immediately in a piecemeal way, with inadequate impact assessments and holistic risk analyses.

One risk is that the action plan will make Sweden more dependent on external factors. In the short term, Sweden’s dependence on imported fossil fuels will increase. The aim to buy emission allowances from other EU countries might prove to be too optimistic and expensive, and could also mean that necessary climate transition investments in Sweden might be delayed or not implemented at all. The one-sided emphasis on new nuclear reactors risks obscuring the need for other new fossil-free electricity production in the short term, as well as the need for measures to promote energy storage, electricity grids and flexible electricity use.

The erratic nature of the policy and lack of a clear plan in itself risks increasing the socio-economic costs and thus reducing cost-effectiveness. Likewise, this might reduce acceptance for the transition, from both the business community and the population at large. Sweden risks losing its attractiveness, with reduced investment in the green business sector of the future. New investigations of both the 2030 targets and how they are to be achieved create a period of uncertainty among the population, businesses, municipalities and authorities, which increases the risk that neither national nor EU targets will be achieved. Few stakeholders were invited to participate in developing the action plan, which risks further weaking engagement and increasing uncertainty about the political direction.

The shortcomings in the Government’s action plan also risk weakening Sweden’s position to influence other countries, especially those with significantly higher emissions. If Sweden does not fulfil its commitments to the EU and if other member states act in a similar way, the EU’s current leadership role in global climate action will be weakened.

Recommendations to the Government during its term of office

We believe that the Government needs to act now to reduce the above-mentioned risks and better leverage the opportunities of the climate transition and the commitment of many different stakeholders in society. We make the following recommendations for the current term of office to set Sweden on a course towards achieving the climate targets, in both the short and the long term.

To reduce emissions in the near future and achieve the 2030 climate targets

The Government urgently needs to decide on and implement policies for reducing emissions in the near future so that Sweden’s climate targets and EU commitments by 2030 can be achieved.

THE CLIMATE POLICY COUNCIL’S ASSESSMENT

• Decide on a package of measures to reduce emissions from the transport sector and non-road mobile machinery during the current term of office, including electrification of the vehicle fleet as well as increased blending of non-fossil fuels and measures for a more transport-efficient society.
• Develop a comprehensive plan to increase the uptake of carbon dioxide in forests and land, and create a safety margin for Sweden’s EU commitment in the land-use sector (LULUCF) through further emission reductions within the effort sharing regulation (ESR).
• Combine tighter climate policy instruments with targeted redistribution policies to distribute the benefits and costs of the transition in a balanced way.
• Explain how Sweden’s EU commitments under the ESR and LULUCF will be achieved in the national energy and climate plan to be submitted to the European Commission by 30 June 2024.

To broaden the path forward and achieve the climate goals in the longer term

Sweden’s long-term climate goal of reaching net-zero emissions of greenhouse gases means that emissions need to be reduced in all sectors. In parallel, measures must be taken to achieve negative emissions. To broaden the path forward and include all of society, the government needs to implement a number of measures now.

THE CLIMATE POLICY COUNCIL’S ASSESSMENT

• Develop a clear Swedish position for an ambitious, science-based climate target for the EU by 2040 in good time before the new European Commission takes office.
• Contribute to the development of the two EU Emissions Trading Systems (ETS) in order to benefit those at the forefront of the climate transition and to achieve climate neutrality across the EU.
• Include the climate perspective in the ongoing review of the fiscal policy framework, including the fiscal effects of various pathways in the climate transition.
• Build a more robust policy by linking investments in bolstered total defence and increased self-sufficiency with climate change adaptation and transformation.
• Make energy and resource efficiency a fundamental component of Sweden’s policy for the climate transition, and clarify how Sweden will contribute to achieving the EU’s energy efficiency goals.
• Develop a strategy together with stakeholders for addressing the climate impact of agriculture including all greenhouse gases, and aim towards climate-neutral agriculture for the future. Draw lessons from countries and regions that have already taken steps in these efforts.
• Develop a broader and less vulnerable electrification strategy which helps to solve the issue of compensation to municipalities for wind power installations and lays a solid foundation for investments in offshore wind power, solar power, electricity grids, energy storage, and flexible, efficient energy use.
• Broaden collaboration in the design and implementation of climate policy to boost acceptance and engagement. In addition to the business community, include municipalities, regions and civil society organisations.