The Climate Policy Councils task and the need for a new analytical model

An easily accessible, well-anchored and appealing vision that describes where our efforts are headed is just as important as the target itself. In addition, linking the climate transition to other key global goals for welfare and prosperity increases the potential to anchor it with more stakeholders. The overarching goal for Sweden is for it to become the world’s first fossil-fuel-free modern welfare nation. This goal, in combination with a clear vision or narrative of what this future country should look like, will facilitate its implementation throughout society. An appealing vision with a clear direction can both spark motivation and make it easier to prioritise different actions.

The Climate Act sets a clear quantitative target of net-zero greenhouse gas emissions by 2045, a long-term target complemented by several interim targets and sectoral targets. In order to assess whether the policies pursued are sufficient for achieving the targets, it is necessary to in some way assess the impact of each individual decision on greenhouse gas emissions. It is even more important to perform calculations or discuss the overall potential impact of the pursued policy on emissions trends. A prerequisite for doing this is to know when a particular initiative is to be carried out or when announced reforms are expected to enter into force.

Even if the impact of planned actions cannot always be quantified in a specific amount of reduced greenhouse gas emissions, it is always possible to make some sort of policy impact assessment, at least for developments in the near future. It is also useful to engage in a qualitative discussion on the extent to which policies are expected to help achieve the climate targets and how the proposed initiatives will contribute and interact.

Cost-effectiveness is an important criterion for allocating society’s resources as effectively as possible among a wide range of purposes. It means ensuring that the long-term target of net-zero emissions is achieved at the lowest possible cost to society. Policy proposals that make the climate change transition unnecessarily costly for all or part of society risk eroding the legitimacy of both the individual proposal and the climate policy as a whole. Cost-effectiveness initiatives represent responsible actions for the smart use of our shared resources and thus facilitate the transition.

Sometimes the concept of dynamic efficiency is used, which refers to the effects of a particular effort that arise in the second and third stages by, for example, stimulating technology development. Dynamic efficiency must normally be assessed from a longer-term perspective. Overall, the time perspective is essential when assessing the effectiveness of policy.

Sweden is a country with a strong tradition of cooperation, a consensus culture and a high level of trust in public institutions. This proves to be a strength when major societal changes are to be implemented. When different sectors of society at different levels – local, regional, national and international – both cooperate and pull in the same direction, this makes a significant impact on the effective implementation of decisions taken. And because of the immense, rapid transition needed to achieve the target of net-zero greenhouse gas emissions by 2045, policymakers across all levels of society must be involved and mobilised. Broad collaboration among society’s stakeholders will be crucial.

Here, we look at three different aspects. The first is horizontal coordination among different policy areas (meaning integration of climate change in all policymaking). The second aspect is coordination with budgetary policy in particular, and the third is vertical coordination among different levels of policymaking.

Every one of these aspects is crucial to the success of the broad impact needed to enable the climate change transformation of our communities. Much of this is about getting different policy areas to support each other instead of counteracting each other, which is a risk if there is no coordination. To achieve this, both legislation and societal objectives must be re-examined to ensure consistency with the climate targets while impact assessments should be performed in all relevant policy areas.

To be as effective as possible, political efforts at home should relate to both the global and the European perspective. In addition, specific policy areas such as transport, construction or public health must be coordinated. It is crucial for the Government to pursue climate change initiatives with sufficient momentum and impetus, in its own efforts and in its governance of public agencies. Clear and strong leadership is a must.

The shift towards net-zero greenhouse gas emissions is an undertaking that will continue for many decades and encompass all parts of society: the public sector and private businesses, non-profit organisations and individuals. Reducing risks and encouraging opportunities for all the actors involved requires transparency, a long-term approach and the predictability of policies. Broad political support is needed to avoid policy ups and downs during every election. This is also a primary objective of the climate policy framework. Creating continuity is fundamental for all actors involved in Sweden’s climate change transition, not least for the business climate and competitiveness.

Developments abroad, new knowledge and changing circumstances mean that climate policy also requires flexibility in order to achieve the established goals in a sustainable, cost-effective way. This requires continuous follow-up of policy and a process for how lessons learned from follow-ups and assessments will help policy evolve and increase target attainment.

Broad support and acceptance of the policy pursued is crucial to the success of the climate change transition. Major changes at all levels of society will be required to accelerate emission reductions – which always poses a challenge to the cohesion of a society.

On an overall level the Swedish economy and Swedish industry can benefit from this transition, but it will create winners and losers among companies, cities and citizens. Another challenge is that there are signs of declining trust in Swedish society, even though it remains high according to an international comparison. The debate is becoming more polarised and general faith in the future is weakening. Regardless of the facts, there is a risk that perceived inequalities between urban and rural areas, for example, will increase, as well as the feeling of insecurity.

All this makes it important for the policy pursued to be able to manage both real redistribution concerns and the feeling of threatening changes or perceived injustices.

The first step is based on a survey of possible emission reduction solutions (new technologies, behavioural change, etc.) that we know exist in the different sectors and their potential to reduce emissions. This information is taken from Panorama, an open tool developed by the Climate Policy Council together with the Swedish Environmental Protection Agency and Swedish Energy Agency that visualizes the climate change transition in Sweden.

In some cases, the solutions and potentials in Panorama have been supplemented with more specific or up-to-date information. This has been done in dialogue with researchers, government representatives, business stakeholders and other experts with a deep understanding of the climate change transition in the different sectors. In the vast majority of sectors, there are currently well-known, established solutions for delivering on the targets that have been set. But there are exceptions in which known solutions are not available, such as in the case of agriculture.

The second step identifies the obstacles in the way of realising the solutions. Obstacles include traditional market failures, but also administrative obstacles of various kinds as well as obstacles that depend on habits, norms and other societal factors. Achieving the climate targets requires instruments that address these obstacles. For each of the solutions, Step 2 brings together and rates the primary obstacles that are currently slowing down developments.

In Step 3 we examine whether instruments are available that address the obstacles slowing down the transition in different sectors. The supporting documents are mainly drawn from Panorama, which compiles updated information on current instruments in different sectors. As far as necessary, the information provided by Panorama is supplemented by further details from other government agencies analyses and syntheses. The assessment of how well the available instruments address the obstacles to different solutions was conducted by our office, in consultation with other agencies and experts.

Finally, in Step 4 we estimate the proportion of each solution that can be realised by 2045, given current conditions and determined policies. The Council performed the assessment in the final step by weighing the results of previous assessments and by using selected dialogues with government experts and representatives in the sectors concerned.

Altogether, this provides a general picture of how well current and planned instruments will enable the climate change transition in the different sectors as well as their overall impact by 2045.