WWF SWEDEN 2008: An Analysis of Sweden s Carbon Footprint

Transcription

1 WWF SWEDEN 2008: An Analysis of Sweden s Carbon Footprint

2 Report for WWF prepared by Jan Minx, Kate Scott, Glen Peters* and John Barrett Stockholm Environment Institute, University of York, Heslington, YO10 5DD, UK *Industrial Ecology Programme, Norwegian University of Science and Technology (NTNU), NO-7491 Trondheim, Norway 2

3 Contents Executive summary Introduction 8 Living beyond limits 8 Living in a changing climate 10 A low carbon Sweden governments, business and people acting together 12 Accounting for climate change the carbon footprint 13 Structure of the report The Swedish situation 17 Trends in Sweden s territorial CO 2 emissions 17 Drivers of industrial CO 2 emissions 19 Sweden s carbon footprint 21 The carbon footprint of Sweden s imports The carbon footprint of households The carbon footprint of government Businesses: sectoral contributions to the carbon footprint Towards a low carbon Sweden References 43 Methodology 45 Methodology references 48 3

4 Towards a low carbon Sweden: executive summary Ecological debt day arrives earlier each year our insatiable consumer wants are driving us to use up the Earth s resources at a rate which the planet cannot regenerate them, known as overshoot. Yet these consumption patterns are not met equally around the world, instead the poverty gap is widening. Growing populations in the poorest parts of the world is putting even more pressure on them to meet their basic needs for food, water and shelter. Figure I shows the trend in global CO 2 emissions in the last century, highlighting that in 1956 we started releasing more carbon dioxide into the atmosphere than the recommended volume necessary to keep our climate stable (70% below current levels, Stern, 2007). Figure I: Global carbon dioxide emissions overshoot (adapted from Marland et al., 2007) We are releasing more carbon dioxide into the atmosphere than can be absorbed by ecosystems, oceans and geological systems. There are signs already today that global pollution is too much for the planet to cope with: our climate is warming causing ice sheets to melt and sea levels to rise, droughts and flooding are increasingly common, crops are failing and species are becoming extinct. These are strong signals that we need to deal much more carefully with our planet s resources, if we want to avoid ecological disaster. It is the world s poorest countries that are most vulnerable to the effects of global warming and ecological disaster as they do not have the resources to cope. Industrialised countries have developed their economies, 4

5 and as a result are responsible for the majority of carbon dioxide in the atmosphere today. Poorer countries will need to increase their emissions to allow more people to meet their basic needs, and so industrialised countries must therefore lead the way out of crisis by drastically reducing global emissions. This is recognised as economically the most efficient solution to deal with climate change. Leading Sweden to a low carbon economy is not an easy route to take, but it will secure the future for Sweden, providing a better quality of life for all. No one is exempt from the effects of climate change. We must make immediate changes to the way we produce and consume goods and services in order to contribute to the necessary global reductions of CO 2 emissions This report assesses Sweden s contribution to climate change from two perspectives: Sweden s territorial CO 2 emission account and Sweden s carbon footprint. Whilst CO 2 is just one of several greenhouse gases and climate change is just one of the implications of resource overshoot, they represent the greater part of the problems we face today. We have highlighted the issues associated with purely taking territorial emissions into account, which does not reflect the full climate change impacts of life in Sweden. The global climate change impacts of Swedish citizens are 17% higher than suggested by the territorial emission account, and so unless the territorial emission account is adjusted to include emissions embodied in traded products consumed within Sweden, Sweden s contribution to climate change, like most other industrialised countries, will be under-estimated. To achieve a low carbon economy, Sweden must reduce greenhouse gas emissions from its territory, whilst also reducing global emissions from consumption, addressing the production of products in other countries. The analysis of the Swedish context results in the following conclusions and raises some key areas for policy consideration: Sweden has not succeeded in reducing its territorial emissions since the start of climate change negotiations in 1992 Sweden has shown its commitment to climate change and has been acknowledged as a leader in climate performance and will succeed in achieving its Kyoto targets, allowing Sweden an overall increase in emissions of 4% 1990 levels, within the EU combined reduction target of 8%. However, maybe due, therefore, to a lack of motivated policy goals, Sweden has not succeeded in reducing its territorial emissions since the start of climate change negotiations in 1992, over 15 years ago. Current levels of CO 2 emissions are not enough to prevent dangerous climate change and Sweden must push for more ambitious reductions. In order to reduce domestic emissions in line with necessary longer term climate targets, policy needs to focus on energy, transport and food. Technological carbon-efficiency improvements have been achieved in all sectors, with the exception of agriculture, forestry and fishing and much more notably the transport sector. The majority of the transport industry is reliant on fossil fuels, mainly oil. The government needs to see though its target of ending its dependence on oil by This should not be at the expense of increasing its reliance on nuclear power. 5

6 There are more than enough renewable energy sources in Sweden to provide a diverse, secure low carbon electricity supply, alongside appropriate options for improvements in energy efficiency. Nuclear power comes with considerable uncertainty and risk, and the option of increasing biofuel use is also not without controversy. It is important to note that the carbon tax and energy certificates promote investment in the least cost renewable resources, which is creating a firm demand for biofuels. However, biofuels have been criticised for causing a loss in biodiversity, placing increased pressure on water resources, adding to deforestation and taking away land that could feed a growing world population. This demand for biofuels, partly due to its cost effectiveness compared with other alternatives, does not encourage wind power, which needs strong, targeted support. Sweden s carbon footprint is higher than its territorial emissions, with the majority of CO 2 attached to imports coming from the EU Territorial emissions do not reflect the full climate change impacts of Swedish citizens. When taking global consumption emissions into account, Sweden s emissions are 17% higher. Therefore, the government s framework must take account the CO 2 attached to traded products. It s too easy to say that Swedish consumers should be held fully responsible or that Sweden should take care of all these emissions as they have paid for the products. Yet it is more an issue of costing not taking into account the full externalities of the product, such as the environmental impacts of that product. Another important issue relating to this is the current design of the Kyoto Protocol that means Non-Annex parties, such as China and India, have no targets to meet (as oppose to Annex I parties such as Sweden) as of yet. Industrialised countries need to be aware of this and make efforts to help reduce these emissions through mechanisms outlined in the Kyoto agreement. As the majority of emissions attached to Swedish imports are from the EU (40%), Sweden should continue to be a leader in sustainability policies within the EU and push for stronger climate change agreements between Member States. The EU Emission Trading Scheme is having little success as caps (the overall limit of emissions per country) have been set too high, meaning that countries do not need to trade for carbon allowances. Most importantly, Sweden should ensure trading takes place by pushing for considerable reductions of caps. This will add to greener supply chains for products consumed by its inhabitants through reduced CO 2 embedded in imports. Over three quarters of Sweden s greenhouse gas emissions come from households mainly energy, transport and food In the past policies have focused on industry and cleaner production. Over time industry has improved its carbon-efficiency; however, technology alone can t fix the problem. These gains have been largely offset by rapidly increasing consumption levels; therefore there is an obvious need for government policy to target household consumption, mainly in energy, transport and food, making up 80% of household emissions. The bottom line of changing lifestyles is that everyone is aware of the problem and that they think it matters to them. The government and regulatory authorities need to help people help climate by making sustainable 6

7 solutions easier to take up. This starts from helping people understand the problem, supporting them in their choices through the provision of information, and adjusting the incentive system to reward sustainable lifestyles (Barrett et al., 2007). Territorial emissions are driven by the growth effect The growth effect has been evident in Sweden. The carbon-efficiency of industries has improved and as a result has lead to cheaper products, which has caused a rise in their consumption. Policy needs to target improving energy efficiency, whilst reducing emissions from consumption caused through increased demand. One efficient way to counteract the growth effect is through fiscal levers or ecological taxation (Barrett et al., 2007). Incentives, subsidies and grants will provide a pricing framework that rewards sustainable behaviours. This would involve placing higher taxes on unsustainable activities, and lifting taxes or subsidising sustainable ones to encourage people to a more sustainable lifestyle. This report leads us to the conclusion that it s not just about consuming differently, but it might be that we could consume less. Whilst we are exercising greener choices, our efforts are being offset by our increasing levels of consumption. We can address this issue through looking at our life-work balance. It is often acknowledged that people would be happy to work less and have more leisure time, for example to spend with their family. Through working less and earning less, we would consume less, yet we have the incentive to improve our quality of life in doing so. The government has immediate influence over more than 50% of its domestic emissions The government should lead by example and adopt strong regulations in accordance with the environmental impacts of all its activities. The government need to strengthen public procurement and adopt more stringent standards where they purchase the most ecologically sound products. Most importantly, the Swedish government must provide leadership through a collective framework for change. People and businesses cannot be expected to swim against the tide. The government need to put the infrastructure in place to enable businesses and individuals to make the change towards more sustainable behaviours, through communicating change, adopting strong climate regulations and providing incentives to reward sustainable businesses, behaviours and lifestyles. 7

8 1. Introduction 1.1. Living beyond limits Our planet possesses only a limited amount of land and natural resources to provide for all humanity s needs and wants and only a limited capacity to absorb pollution and wastes. However, there are signs already today that global resource use and pollution are too much for the planet to cope with: our climate is warming causing ice sheets to melt and sea levels to rise, droughts and flooding are increasingly common, forests are disappearing, fisheries are collapsing, crops are failing and species are becoming extinct. These are strong signals that we need to deal much more carefully with our planet s resources, if we want to avoid ecological disaster. The Ecological Footprint, a calculation of the productive area we need to live the way we do today, provides evidence that humankind would need the biocapacity of more than one planet to sustain today s lifestyle over time (see Figure 1) saw our first Ecological Debt Day, where we started using our planet s resources more rapidly than the planet could regenerate them. Each year, our demands on the environment are rising, and we use up the available resources earlier. In 1987, Ecological Debt Day fell on 19 th December. It jumped to 21 st November by 1995, and 2007 fell on October 6 th. Figure 1: Ecological overshoot (GFN, 2007) 8

9 The main driver of our increased demands on the planet over the last decades is an explosion in global consumption driven by seemingly insatiable consumer wants. However, countries have not equally benefited from this consumption growth. While there is a global consumer class mainly based in industrialised countries growing in extent and affluence, more and more are slipping deeper and deeper into poverty and are not able to meet their basic needs for food, water and shelter. Today the overall consumption of the richest fifth of the world s population is nine times that of the poorest fifth (UNEP, 2002). In line with these disparities in the global geography of consumption, the lifestyle of people in different countries poses very different demands on the planet and countries have contributed very differently to global environmental problems. While the Ecological Footprint of the average American, for example, is 9.4 gha/cap, a person in India only has a footprint of 0.9 gha/cap. The Ecological Footprint of Sweden is 5.1 gha/cap. In comparison to the recommended 2,1 gha/cap that the planet is able to cope with (WWF, 2008), we would need another 2 planets to sustain our lifestyle if everyone in the world would live like we do in Sweden. Therefore, the world is faced with a twofold challenge. We need to reduce the overall demands on the planet while meeting our present needs more widely and to allow future generations to meet their needs. This is the idea behind the concept of sustainable development, which we hope will lead to the fulfilment of basic needs, improved living standards for all, better protected and managed ecosystems and a safer more prosperous future (UN, 1992). In 1992 countries met at the UN Conference on Environment and Development, also known as the Earth Summit, to discuss how sustainable development can be addressed globally. Climate change was of specific concern, because it is currently seen as one of the major challenges to mankind. Figure 2 shows the trend in global CO 2 emissions in the last century, highlighting that in 1956 we started releasing more carbon dioxide into the atmosphere than the recommended volume necessary to keep our climate stable (70% below current levels, Stern, 2007). 9

10 Figure 2: Global carbon dioxide emissions overshoot (adapted from Marland et al., 2007) This report focuses on climate change and particularly Sweden s contribution to it. We analyse carbon dioxide (CO 2 ) emissions from Swedish production and consumption. Carbon dioxide is the greenhouse gas with the largest anthropogenic contribution to climate change causing around three quarters of the total warming effect (Stern, 2007). Like others, we discuss the CO 2 emissions from Swedish territory. However, this does not reflect the full climate change impacts of life in Sweden. To deal with this issue, we introduce the carbon footprint, which assesses the global CO 2 emissions from final consumption activities in Sweden in whichever country they might occur Living in a changing climate We are releasing more greenhouse gases into the atmosphere than can be absorbed by ecosystems, oceans and geological systems. The IPCC (2007) present strong evidence showing that the accumulation of these in the atmosphere is causing global temperatures to rise, and having irreversible consequences on our planet. The scientific evidence is now overwhelming: climate change is a serious global threat, and it demands an urgent global response (Stern, 2007) Global mean temperatures will continue to rise unless stocks of GHG in the atmosphere are stabilised at a level that the Earth system can naturally absorb from the atmosphere annually. Concentrations of greenhouse gases are currently 430 ppm, adding 2 3 ppm a year. If we continue to release GHG in the volumes we are producing just now, these will reach detrimental levels of over 700 ppm by the end of the century (Stern, 2007). Serious and immediate action is required to cut GHG emissions globally. For example, to stabilise at 550 ppm CO 2 equivalent, we would need to be 25% below current levels (2000 levels) in 2050 and see a reduction of at least 1 3% per year. To stabilise at 450 ppm CO 2 equivalent we would need to be 70% below current levels in 2050, with a 5% reduction per year (see figure 3). The lower the concentration of stabilisation, the less the 10

11 risk of severe climatic events. According to the Scientific Council on Climate Issues 1, the EU's two degree target is more likely to be achieved if GHG concentration in the atmosphere is stabilised in the long term at 400 ppm carbon dioxide equivalents. Figure 3: Emissions paths to stabilisation and the associated temperature change (Stern, 2007) The next question is who should cut emissions and how much? This question is at the heart of the climate change negotiations. Even though this must not necessarily be the case in the future, GHG emissions have so far been closely related to countries economic success and grown together with GDP. Therefore, industrialised nations are the source of most past and current emissions. At the same time the poorest countries have contributed least, but are often most vulnerable to the consequences of climate change. Of the 262 million people affected by climate disasters annually from 2000 to 2004, over 98 percent of them were from less developed countries. Tuvalu, a disappearing country under the rising sea, highlights the immediacy of climate change, presenting what are likely to be the first permanent climate change refugees (see Box 1). Hence, there is a divide: The main causers of climate change have most resources to protect themselves against the consequences of climate change and are not the ones who feel the impacts most severely. Climate 1 Commissioned by the Swedish Government to provide a scientific assessment as a basis for the work of the Swedish Climate Committee, the all-party committee for the review of climate policy 11

12 Change has therefore become a wider issue of meeting basic human needs more widely across the planet. This is reflected in the title of the most recent Human Development Report published by the United Nations: Fighting Climate Change: Human Solidarity in a Divided World (UNDP, 2007) In today s world, it is the poor who are bearing the brunt of climate change. Tomorrow, it will be humanity as a whole that faces the risks that come with global warming. (UNDP, 2007) Box 1: Tuvalu a disappearing country Probably one the most striking examples for the impacts of climate change and proof of a world being in a state of emergency is Tuvalu. Located in the Pacific Ocean, it is one of the smallest and most remote countries on earth. Made up of 9 small low-lying islands, with no point reaching 3 meters above sea level, the country is in danger of disappearing. The sea is inextricably linked to Tuvalu s natural and social systems. With rising sea-levels, warming temperatures and frequent stormy weather, the islands are at massive risk. The population s livelihoods are dependent on agriculture, their food supply is dependent on fish stocks and island vegetation vulnerable to the climate and their land is being lost to the sea. Plans for evacuation are being made and Tuvalu seems to be destined to become one of earth s first nations to be washed away due to the effect of global warming. This would make Tuvaluans the first complete nation of climate refugees, banned from their islands with their culture and identity taken away. In April 2007 the Permanent Representative of Tuvalu made his statement to the United Nations at a Special Session of the Security Council on Energy, Climate and Security. Without having contributed to climate change but yet facing the full consequences, he appeals to the United Nations to find a global strategy and he longs for solutions and decisions to be taken at the highest level of government (Pita, 2007). It is clear that many of the poorer countries will need to increase their GHG emissions to allow more people meeting their basic needs. Industrialised countries must therefore lead the way out of the crisis by drastically reducing emissions in a global process of contraction and conversion. The Kyoto agreement was a first step into this direction even though much stronger commitments will be required in the future. The incentives are there. Looking to the future, no country however wealthy or powerful will be immune to the impact of global warming. The Stern report has further highlighted that immediate, strong action lead by developed countries is also the economically most efficient solution to deal with climate change A low carbon Sweden Governments, business and people acting together If we act now, we can avoid the most serious impacts of climate change. We need ambitious action from around the world to achieve the 80% reduction in GHG emissions required to stabilise atmospheric concentrations at a level which is likely to avoid dangerous climate change. Sweden is amongst the 56 countries that together are responsible for over 90% of global energy-related CO 2 emissions. While Sweden 12

13 will have no problems in meeting its climate changes target as established in the Kyoto Protocol, there is still much to be done to achieve what might be considered as a low carbon/one planet economy: GHG emissions from Swedish territory will need to be further reduced; Global GHG emissions from Swedish consumption occurring in the production of products in other countries will need to be addressed. In order to progress towards a low carbon/one planet economy, government, business and people need to act together in a 'triangle of change' (figure 4). Different corners lead at different times by doing what they can do best. It is difficult to expect any stakeholder group to act alone; instead it is good to think of the notion I will if you will where a coordinated approach will create the opportunities and responsibilities to accelerate change (SDC and NCC, 2006). Government The products and services people use, and the infrastructure available, link government with business and people Business People Figure 4: The triangle of change 1.4. Accounting for climate change the carbon footprint A precondition for effective action is to develop an understanding of Sweden s full climate change impacts based on sound scientific evidence. There are different ways in which we can account for greenhouse gases. Emission inventories, as used in international climate negotiations, usually focus on emission sources: CO 2 emissions from cars on Swedish roads, machines in Swedish factories or methane emissions from cattle raised in Sweden. We will refer to emissions directly emitted by an activity as direct emissions. The sum of all emissions from Swedish soil is referred to as territorial emissions. 13

14 However, our livelihood depends on consumption and it is equally important to evaluate how and what we consume (see Peters, 2008). Opposed to public perception, the majority of climate impacts of individuals are not associated with the direct emissions from heating our houses and driving our cars, but with the products we buy. For example, the climate change impacts of a car are not only related to the emissions of driving it, but also to emissions associated with raw material extraction, manufacturing, distribution and disposal of the car (see Box 2). Many of these occur outside the Swedish boundaries in other countries. Hence, consumption of final products instigates a whole chain of production activities throughout the global economy. We will refer to these upstream and downstream emissions triggered by a final consumption activity as indirect emissions. Box 2: Emissions associated with the purchase of a car In the production process there is a hierarchy of production layers, and each one of them needs inputs like materials and energy. The (raw) materials and parts to manufacture the car will be purchased from a range of specialised industries upstream. It is likely that they themselves obtained materials from other industries and so on. The parts of the car are transported downstream to factories in order to put the car together and deliver it to retailers. All these steps use up resources and emit pollution in the process, pollution and resource use that should be accounted for when calculating the emissions associated with purchasing a car. Once the car is sold to consumers, additional resources are required and pollution is generated when people drive it. The literature suggests that the most direct environmental impact comes from the fuel used to power it. Whilst many people think only of these emissions when they consider a car, this example demonstrates that there are a lot of indirect environmental impacts hidden in the complex combination of production layers, sectors and even countries involved in its fabrication. Therefore, the total climate change impact of economic activities in Sweden is not captured by a territorial emissions account. Trade and all the emissions arising globally to produce the products consumed in Sweden 14

15 need to be taken into account. We will refer to the direct and indirect emissions from final consumption within Sweden as its carbon footprint. Box 3 defines the carbon footprint and summarises the relationship between territorial emissions and the carbon footprint. Box 3: Territorial emissions and the carbon footprint which to chose? Sweden s carbon footprint = the global CO 2 emissions from consumption within Sweden The carbon footprint is the global emissions produced from final demand in Sweden, with the emissions from imports consumed within Sweden included and the emissions attached to exported products excluded, whilst territorial emissions are the emissions produced in Sweden, including those which are attached to products consumed abroad (figure 5). 1 Swedish consumption 2 Production in Sweden 3a Final consumption in Sweden Exports from Sweden 3b 5a, 5b 4a 4b 3 4 Production abroad Consumption abroad Arrows should be read as Emissions occurring in [beginning of arrow] due to [end of arrow] Figure 5: Emissions occurring through Swedish economic activity, including trade and different principles of emissions accounting (adapted from Wiedmann et al., 2007). 1) Domestic Swedish emissions due to Swedish final consumption 2) Domestic Swedish emissions due to export 3a) Imported emissions to domestic industry due to Swedish final consumption 3b) Imported emissions to domestic industry due to Swedish exports 4a) Imported emissions direct to final demand due to Swedish final consumption 4b) Imported emissions direct to final demand due to Swedish exports 5a) Swedish residential emissions due to travel 5b) Swedish residential emissions not due to travel (e.g. housing) Territorial emissions: a + 5b Carbon footprint: 1 + 3a + 4a + 5a + 5b When setting targets, both national and international, they are set according to territorial emissions. It is the principle presumed in the Kyoto agreement of the UNFCCC. 15

16 Having a closer look at accounting in this way, it reveals its inherent problems: as developed countries shift to a more highly skilled and service economy they tend to import carbon-intensive products from less developed countries. Thus, the production of CO 2 - intensive goods takes place in other countries and the emissions are charged to their national emission-account. This is one of the reasons why highly developed countries like Sweden have low carbon emissions less developed countries take responsibility for demands by the industrialised world. Therefore, international trade has an increasing influence on the ability to fulfil national CO 2 targets as a significant amount of CO 2 is embodied in goods traded internationally (Munksgaard and Pederson, 2001). There are a variety of other reasons why it is important to take into account the global emissions from consumption. First, only by taking a consumption perspective the full climate change impacts of life in Sweden can be quantified. Particularly, in carbon efficient economies like Sweden, consumption activities tend to have larger climate change impacts than production activities. Second, the Kyoto agreement only sets emission targets for industrialised countries like Sweden. Territorial emission targets could be achieved by these countries through shifting carbon intensive production activities to countries without binding targets. This is commonly known as the problem of carbon leakage. Third, with global trade currently growing twice as fast as global GDP, the increased number of imported products from less carbon efficient economies might remain the ultimate challenge for Sweden to reduce its global climate change impacts Structure of the report This report establishes and analyses territorial and carbon footprint accounts of Sweden. To fully account for the climate change impacts of trade it uses an 87 country model to reflect carbon intensity of production processes in different parts of the world adequately. To our knowledge such a comprehensive analysis has not been undertaken before. The structure of the report is as follows: In the first Section we deal with trade related issues and associated differences between territorial emissions and carbon footprint. The remainder Sections of the report each discusses one of the corners of the triangle of change representing one actor. In particular, we identify what activities in Swedish households contribute to high emissions, where government have the ability to reduce their emissions; we also identify the most carbon-intensive industries and supply chains, and consider the hidden emissions of services. Based on this indepth understanding we outline implications for Swedish efforts in reducing their climate change impacts at home and abroad. 16

17 2. The Swedish situation 2.1. Trends in Sweden s territorial CO 2 emissions *United Nations Framework Convention on Climate Change (international transports are not included) Figure 6: Development of direct territorial CO 2 emissions by producer Sweden has recently been highlighted as one of the most successful countries in combating climate change in a study which measures territorial emissions (Germanwatch, 2007). The climate change performance index assesses a countries progress in reducing CO 2 emissions by taking into account the current levels in energyrelated territorial CO 2 emissions, current trends as well as the climate change policies implemented so far. Sweden s good performance has mainly been driven by its low levels of CO 2 emissions. Our results confirm that with 60 million tons or 6.6t tons of CO 2 per capita Sweden emits much less CO 2 emissions from its own territory than other industrialised countries. This is particularly driven by the low carbon nature of Sweden s electricity producing sector. The results in this report are based on CO 2 emissions from Swedish national environmental accounts, which are slightly higher than the estimates from the UNFCCC (as presented in figure 5); however, the trend remains the same. The UNFCCC territorial accounts do not allocate international transportation to a country due to problems assigning responsibility and poor data (Peters, 2008). Sweden s success in reversing trends in territorial CO 2 emissions has been rather limited (see Figure 6). Since the beginning of the international climate change negotiations at the Earth Summit in Rio de Janeiro in 1992, Sweden has not managed to stabilise the carbon output from its domestic territory. Between 1993 and

18 direct carbon emissions have risen by 4.3% or 2.6 Mt. 2 The main cause of this rise have been increasing levels of CO2 emissions from industries: in 2003 the industrial sectors emitted 6.8Mt 3 or 16% more CO2 than in Direct emissions from households and government have been reduced significantly by 17% and 49% respectively over the same period of time. However, it is important to highlight that these are purely direct emissions, and that we shouldn t underestimate the influence of indirect emissions from government and households as drivers of CO 2 emissions. While these developments might still be sufficient to reach Sweden s modest short terms targets and Kyoto commitment of reducing overall greenhouse gas emissions by at least 4% by , these developments indicate the lack of ambitious climate change policies so far. Overall the Germanwatch (2007) study therefore paints a bleak picture: if climate change was an Olympic discipline, no country would deserve to climb the winner s victory podium. If the world wants to stabilise atmospheric carbon concentrations at levels which are likely to prevent dangerous climate change (see IPCC, 2007), none of the assessed countries is even close to being a sustainable low carbon economy. The Swedish Climate Committee, the all party committee for the review of climate policy has agreed that at least a 75-90% reduction is needed from Sweden by 2050 and close to zero by WWF support a 90% reduction by This report tries to contribute to scoping Sweden s climate change challenge through the analysis of existing trends and a rigorous assessment of Sweden s global contribution to climate change. Due to data availability we will concentrate our analysis on the time series 1993 to Message 1: Sweden has not succeeded in reducing CO 2 emission from its own territory since the start of the international climate change negotiations at the Earth Summit in Rio de Janeiro. Message 2: While households and government have managed to reduce their direct emissions, CO 2 emissions from industrial sources keep rising. 2 This has been reduced to 0.8Mt by 2005 as shown in the most recent environmental account data. In this report we focus on 2003, because of the better data situation of this year. This will allow us to establish a solid consumer emission account, which would be more difficult for This includes an adjustment for the higher climate change impacts of aviation fuels emitted in higher altitudes as recommended by the IPCC. Without this adjustment the increase would be 6.3 Mt as shown in the Environmental accounts. 4 This report uses input-output tables to analyse the full consumer emission account for Sweden. The most recent year available is 2003; therefore, our analysis is based on 2003 data. 18

19 2.2. Drivers of industrial CO 2 emissions Figure 7: Drivers behind increases in CO 2 emissions Sweden s rise in CO 2 emissions have been caused by a 6.8Mt increase in carbon output of domestic industries. There are various technological, socio-economic and demographic driving forces which have influenced this trend. For example, the total CO 2 emissions of a company that produces in an environmentally friendly (ecoefficient) and socially responsible way, might increase because of the increased demand for greener products. At the same time, additional demand could just be caused over time through a rapidly increasing population. It would, therefore, be far too simple just to blame industry for their lack of progress in combating climate change. In order to get a more comprehensive picture, we distinguish 6 drivers behind emissions trends of industries between 1993 and 2003: Carbon-efficiency: The contribution of changes in sectoral carbon intensity (tco 2 /SEK sectoral output); Procurement: The contribution of changes in sectoral supply chains; Consumer choices: The contribution of changes in the average consumption basket; Exports: The contribution of changes in the contribution of exports to final consumption; Consumption levels: The contribution of changes in the levels of final consumption per capita; Population: The contribution of changes in Sweden s total population. Figure 7 shows that industrial sectors themselves have not done badly in combating climate change. Through improvements in carbon efficiency (-4.3Mt) and decarbonising their domestic supply chains (-3.5Mt) a total of 7.8 Mt of carbon has been saved between 1993 and Also Swedish consumers saved 2Mt of carbon through their choice of greener products. However, all these carbon savings were off-set through rising per capita levels of consumption, which triggered an additional 15Mt of CO 2 between 1993 and Sweden s consumer culture is, like many industrialised countries, growing in extent and affluence. Therefore, we find evidence that Sweden s progress in the climate change challenge is counter-acted by the existence of an economy-wide growth effect: carbon savings through technological and organizational carbon efficiency improvements, essentially reducing the relative price of a product, have been fully-offset by CO 2 19

20 emissions arising from increased consumption. The conclusion is clear: efficiency gains are not keeping in pace with the rising demand for goods and services. Moreover, Figure 7 also highlights that it would be too simple just to blame industries for Sweden s slow progress in reducing its territorial carbon emissions. Production and consumption are directly interlinked and influenced by a variety of economic, social and demographic factors. The demand for products can influence the volume and method of production. Substantial progress on climate change will only be made if both are jointly considered. Climate change is a challenge we all face together and we will only be successful in facing it if all stakeholders work together in reducing emissions on the production and consumption side of the economy. Recent evidence in the UK has highlighted that such mutual societal consensus is fundamental as encapsulated in the notion of I will if you will, where all stakeholders must act together (as illustrated in figure 4). From a policy perspective Figure 7 could indicate that sustainable consumption might not only about consuming differently, but also about consuming less. Therefore, there might be the need to revive the discussion about the relationship between consumption and well-being. Enabling people to re-balance their work and private life, might well serve as an adequate way of framing this discussion to mutual societal benefit. Message 3: There is evidence for a growth effect in the Swedish economy. The reductions in CO 2 emissions through advances in eco-efficiency have been off-set through additional consumption of Swedish citizens. Message 4: Swedish consumers have limited the increase in Sweden s territorial emissions through greener choices. Message 5: It would be too simple just to blame industries for Sweden s slow progress in reducing its territorial carbon emissions. Climate change is a challenge we all face together and we will only be successful in facing it, if all stakeholders work together on the production and consumption side of the economy. 20

21 2.3. Sweden s carbon footprint Figure 8: Territorial emissions vs. carbon footprint Sweden s territorial carbon emissions are low compared to other countries. This is mainly driven by the low carbon structure of its electricity production. Over 90% of Sweden s domestic electricity is produced by hydropower and nuclear power (however, approximately a third of Sweden s energy supply depends on imports, mainly imported oil (EC, 2007)). While we firmly believe that nuclear power should not be part of the energy mix of a sustainable low carbon economy (see Box 4) and emphasise the importance of continuing the phase out of existing nuclear plants, the 7.2 tons of CO 2 per capita do still not represent the full climate change impacts of Swedish citizens. Box 4: On the use of nuclear power in a one planet economy With the majority of its electricity generated from hydropower and nuclear power, Sweden s energy sector has a much lower carbon output than most other countries of the world. Even though there is no doubt that nuclear power is a low carbon technology, it is questionable to what extend the other risks attached are reconcilable with the principle of a one planet economy, which produces its goods and services along a sustainable path. In this spotlight section we will discuss some of the important arguments with particular considerations of climate change and discuss the importance for Sweden to continue its nuclear phase-out. There is no doubt that nuclear energy has its merits in the context of climate change even though it is sometimes falsely depictured as a carbon free technology. To produce 1 GWh of electricity 16.2 tons of CO 2 are produced throughout the life cycle of nuclear power. 5 This compares to 356 tons of CO 2 for gas and However, this figure still excludes the carbon emissions from the decommissioning of the plants as well as the wastes themselves, which are not well known. Moreover, commentators have suggested that any move to low grade uranium ore could substantially increase the carbon intensity of nuclear power even though it is currently difficult to predict when such a shift might be required. However, there are some quasi carbon-free ways to produce electricity. The fossil fuel used over the life cycle of a wind turbine, for example, can be repaid in less than 10 month, as turbines themselves generate zero carbon energy. 21

22 tons for coal. An increasing reliance on nuclear can therefore have the potential to drastically reduce the carbon output of the Swedish economy even though some renewables can do even better from this perspective. However, there are other considerations, which need to be taken into account within the context of climate change as well as within wider sustainability considerations. Having nuclear as a central part of the energy mix causes difficulties in providing a level playing field for all other technologies particularly renewables. Electricity generation with heavy reliance on nuclear power tends to lock economies into a central grid system. However, the in-efficiencies of such central solutions are well-described in the literature. Secondly, experience from all over the world shows that nuclear energy tends to receive very large subsidies for R&D, the building of the plants and the expensive decommissioning of the wastes. These are not reflected in the price for electricity from nuclear sources, which commonly only reflects the low operating costs of plants. This biases price formation and leads to an economically inefficient outcome. Many renewables have difficulties to compete with these artificially low electricity prices. At the same time economic incentives to increase energy efficiencies are weakened. Within a larger sustainability context there are all unresolved issues associated with the decommissioning of the plants and wastes as well as the possibility of nuclear accidents. With regard to the latter, there is no doubt that the probability of a major nuclear accident is extremely low. However, the consequences would be disastrous. The fact that there is no insurer in the world, which can insure a nuclear power plant strikingly highlights the fact that reliance on nuclear power cannot be seen as responsible decision making. Finally, there is another caveat of nuclear power associated with international climate change with regard to concerns about proliferation of uranium. Even reactor grade nuclear fuel can be used by terrorist groups for the production of dirty bombs, which can cause large losses in human life. Moreover, enrichment of reactorfuels can lead to the development of nuclear weapons. If Sweden argued that it could only sufficiently reduce its carbon emissions with nuclear in the energy mix, every other country participating in the international climate change process should have the same right. The UNFCCC explicitly encourages the development, application and diffusion, including transfer of technologies, practices and processes that control, reduce or prevent anthropogenic emission of greenhouse gases. A number of difficulties in the relationship between civil and military applications continue to cause concern among many commentators, including: the difficulties of enforcing international treaty obligations; proliferation risks associated with the widespread use of nuclear technologies in countries with very diverse systems of governance; the capacity and resources available to enforce international obligations in a potentially growing number of states with a nuclear capacity; how to deal with states that withdraw from treaties or develop nuclear capability outside of them. Nuclear power is a choice rather than a necessity for a low carbon future of Sweden. There are more than enough renewable energy resources in Sweden to provide a diverse, secure low carbon electricity supply, if sufficient energy efficiency options are considered at the same time. To be a sustainable, low carbon society it therefore seems crucial that Sweden continues on its path to phase-out nuclear power from the energy mix. 22

23 In order to meet the demands of Swedish citizens, a lot of goods are imported into the country. The production of these goods in other countries causes CO 2 emissions outside Sweden, which should be added to Swedish CO 2 account. Territorial emission accounting, therefore, provides a potential mechanism to high consuming countries to shift environmental pollution to distant land. If Sweden imports carbon-intensive products, these are currently not included in its national emissions account. For local pollutants this may be viewed as a rational option for consumers, but for global pollutants consumers will bear the costs regardless of where production occurs. Consequently one would expect the optimal policy for global pollutants is to consider the implications of international trade. The carbon footprint is an alternative consumption based CO 2 accounting measure, which fully accounts for trade and is able to reflect the full climate change impacts associated with the way people in Sweden live. It subtracts all CO 2 emissions from exports from the territorial emissions account and adds import related CO 2. The carbon footprint of exports would be added to the emissions account of the country that consumes the exported products. Figure 8 highlights that the global climate change impacts of Swedish citizens are 1.2t/cap or 17% higher than suggested by the territorial emission account. Unless the territorial emission account is adjusted for trade activities, Sweden s contribution to climate change will be under-estimated. Developing Sweden towards a low carbon society will require taking full responsibility for all CO 2 related to Sweden s consumption. The government should therefore take measures to reduce Sweden s entire carbon footprint rather than its territorial emissions. This will need to involve increased efforts in reducing Sweden s climate change impacts abroad through exporting sustainable energy solutions, technology transfer (joint implementation and clean development mechanism) as well as joint policies with other countries on a supranational level such as the EU tradable permit scheme. Equally the 2050 reduction target should be reviewed in light of the higher carbon footprint estimate. Then it might well be that a percent reduction of domestic carbon dioxide emissions is insufficient for a fair contribution to global efforts of stabilising global carbon concentration in the atmosphere at levels which avoid dangerous climate change. Message 6: Unless Sweden s carbon account is adjusted for trade activities, it will under-estimate Sweden s contribution to climate change. Sweden s carbon footprint is 8.4 tons of CO 2 per capita. This is 17% higher than its territorial emissions. Message 7: For global pollutants like CO 2 or other greenhouse gases, consumers will bear the costs of polluting regardless where it occurs. Consequently, one would expect for optimal policy formation that climate change impacts from trade are fully taken into account. 23

24 2.4. The carbon footprint of Sweden s imports Figure 9: Sectoral monetary and CO 2 trade balances for Sweden Sweden s carbon footprint is higher than its territorial CO 2 emissions. This means that it has a negative CO 2 or physical trade balance (PTB). Sweden is a net importer of CO 2 ; importing almost 11 million tons of CO 2 more than it exports. Interestingly, its monetary trade balance is positive; Sweden is a net exporter of goods and services in terms of their value (see Figure 9). Such a pattern might be seen as a typical one for industrial countries with high material consumption and high input levels of skilled labour in their own production processes. These balances of trade vary considerably on a sectoral level. Transport, storage and communications, Wholesale and retail trade, Manufacturing of cars, machinery, electrical equipment and furniture and Manufacture of pulp and paper products are the only sectors with a positive monetary and physical trade balance. Hence, they export more of these products than they import, and are important to the economy in terms of the profit they generate. The Electricity, gas and water supply sector shows by far the highest CO 2 trade deficit. In addition to this, more than a third of Sweden s energy supply depends on imports, mainly oil from Denmark, Norway and Russia (EC, 2007). The government intends to have ended its dependence on oil by The Swedish domestic energy sector provides low carbon electricity and so Sweden could reduce its carbon footprint if all imports were produced with domestic technology (however, see box 4 for discussion on Sweden s nuclear power). If Sweden succeeds in improving its energy efficiency, saving energy, using renewable resources and thus reducing its environmental burden, it can at the same time reduce its import of fossil fuels and become more independent. 24