Sweden can learn from the US on climate

A number of important American visitors were descending on Sweden on March 30th to talk about climate change policy. Former vice president Al Gore was talking to European Commissioner Margot Wallström in Stockholm, while minister for the environment Andreas Carlgren was due to debate with Dr Harlon Watson, US Senior Climate Negotiator and Ambassador Michael M. Wood .

It is often hinted in the Swedish media that the American representatives are here in Sweden to learn from the successful Swedish example of how to reduce emissions of greenhouse gases.

By signing the Kyoto treaty in 1997, the European Union committed itself to reducing its emissions of greenhouse gases by 8 percent between 2008-2012 compared to emissions in the 1990 (mainly carbon dioxide, CO2).

Since then the EU has not been able to fulfill those goals. Economic growth, real and projected, combined with Germany’s decision to phase out nuclear energy and greater than projected coal use among member countries will likely leave the EU about 10 percent short of its Kyoto target. In the last 15 years the US has done as much as Europe to reduce emissions, but in a different way.

Since president Bush declared that “We Americans are addicted to oil”, the increased full market price has passed the magical limit of $3 per gallon (about half the price for oil in Sweden). But Sweden has created a far more dangerous addiction to oil taxes. As 80% of the price in Sweden is composed by taxes it has reduced the interest for finding marketable new technologies.

The US is investing in hybrid technology, new efficient motors and fuels like ethanol and synthetic diesel. The cost of these fuels is often 50% of today’s oil price. American industries are often based on technologies that use the CO2 for commercial purposes in industry, rather than Europe’s emitting and taxing.

A market that is not distorted by excise taxes is open for these new solutions. Investors see profitable ventures and new solutions. Europe is unable to introduce this because of the excise taxes on fuels. We may talk a lot at international conferences but the results are scarcer since our governments have become dependent on the revenues from oil. Clean technology in combination with economic growth has shown itself to have been a far more sustainable way to reduce CO2 emissions at lower costs.

Sweden produces its energy through hydroelectric and nuclear power . Major emitters in Sweden, like the steel, mining and petrochemical industries, have benefited from a highly developed product range and for a long time invested in advanced technologies for cleaning and reducing emissions of CO2. The high quality of Swedish iron ore has also helped the steel industry to reduce its emissions.

Sweden had thus very low emissions to begin with, but the decision to reduce emissions by 4% for the period 1990-2010 does not have an effect on the climate. It also increases energy prices in Sweden by 30-40% because of the emission rights system and the virtual oligopoly it created between the producers EON, Vattenfall and Fortum. Sweden achieves little at high costs, and could thus learn a good deal from the US when it comes to climate policy.

Waldemar Ingdahl, director of the free market think tank Eudoxa