Swedish Policy for Global Climate

sns economic policy council economic reportsns 2020 sns economic policy council report climate policy is a complex area that requires input from many different perspectives. The sns Economic Policy Council 2020 comprises nine researchers from a range of disciplines, with different backgrounds and with varied opinions on the debate surrounding climate policy. They analyse Swedish climate policy in a global context, describing the causes and consequences of climate change and focusing on how policy can achieve the desired reductions in carbon emissions. The report also provides answers to questions that are frequently discussed in the Swedish debate, such as the effectiveness of climate aid and whether Sweden should generate a larger surplus of fossil-free electricity for export. The members of the sns Economic Policy Council 2020 are John Hassler (chair), Björn Carlén, Jonas Eliasson, Filip Johnsson, Per Krusell, Therese Lindahl, Jonas Nycander, Åsa Romson, and Thomas Sterner. Swedish Policy for Global Climate John Hassler (chair) Björn Carlén Jonas Eliasson Filip Johnsson Per Krusell Therese Lindahl Jonas Nycander Åsa Romson 2020 Thomas Sterner 637598 sns 789188 ISBN 978-91-88637-59-8 9 sns Economic Policy Council Report 2020 sns Economic Policy Council Report 2020 Swedish Policy for Global Climate John Hassler (chair) Björn Carlén Jonas Eliasson Filip Johnsson Per Krusell Therese Lindahl Jonas Nycander Åsa Romson Thomas Sterner translation: Clare Barnes sns sns Box 5629 se-114 86 Stockholm, Sweden Phone: +46 8 507 025 00 www.sns.se sns, Center for Business and Policy Studies, is an independent, non-profit organization that brings together the worlds of academia, business and government for knowledge-sharing and dialogue on key societal issues. sns is a membership-based organization with 260 corporate and institutional members. sns Economic Policy Council Report 2020: Swedish Policy for Global Climate John Hassler (chair), Björn Carlén, Jonas Eliasson, Filip Johnsson, Per Krusell, Therese Lindahl, Jonas Nycander, Åsa Romson, Thomas Sterner © The authors and sns, 2020 Translation: Clare Barnes Graphic design: Patrik Sundström Doubledrop logotype: © Patrik Sundström ab issn 1652-8050 isbn 978-91-88637-59-8 Contents Publisher’s foreword 7 Summary 9 1 · Introduction: Why do we need (a report about) climate policy? 31 part i · systems understanding 2 · What causes climate change? 43 3 · What is the impact of climate change? 78 4 · The global energy system 104 5 · Climate policy — theoretical foundations and practical considerations 134 6 · The energy transition 175 7 · International measures to combat climate change 201 part ii · swedish climate policy 8 · Sweden’s carbon dioxide emissions 231 9 · Sweden’s climate policy targets 235 10 · Sweden’s climate policy instruments 239 11 · Analysis and discussion 247 12 · Policy proposals 268 part iii · seven questions 13 · Introduction to the questions 283 14 · Can local climate targets contribute to an effective climate policy? If so, how should they be designed? 284 15 · Should emissions targets be set separately for different economic sectors, or should all sectors have the trans formation pressure? 297 16 · How effective is climate aid as a climate policy? 305 17 · Is it good climate policy to buy emissions allowances and not use them or to influence emissions in the eu ets in some other way? 311 18 · Should Sweden strive to create a large surplus of fossil-free electricity for export? 320 19 · Should nuclear power be kept for climate reasons? 327 20 · Should Sweden provide funding for investments in carbon capture and storage? 336 References 344 The Authors 353 7 publisher’s foreword climate policy is a complex area that requires many different perspectives. Insights from many scientific fields, including the natural sciences and the social sciences, are necessary to find ways of reducing carbon dioxide emissions. This was sns’s point of depar- ture when appointing the sns Economic Policy Council 2020, and also the reason for which the number of council members was increased. As usual, the council is dominated by economists, but for this year’s report, it also includes climate researchers who are experts in law, natural science, and technology. The participating economists have different specializations in their climate research, including macroeconomics, behavioral economics, analysis of different policy instruments, and sustainability. The members of the council are presented at the end of the report on pp. 353–355. The sns Economic Policy Council 2020 examines the natural science basis for understanding climate change and analyzes Swed- ish climate policy, while also highlighting a number of central questions that need answers. One is whether local climate targets can contribute to effective climate policy, and another, whether Sweden should keep its nuclear power for climate reasons. sns’s hope is that this report will lead to increased knowledge about climate change and the measures that can improve the effects of climate policy. Our aim is that the researchers’ analysis and proposals will contribute to a broad and constructive discussion, in Swe- den as well as internationally, about how policy should be framed so as to achieve the desired reductions in carbon dioxide emissions. 8 Publisher’s preface The report’s authors are responsible for its analysis, conclusions, and proposals. As an organization, sns does not have an opinion on these; sns’s task is to initiate and present research-based analyses of important societal issues. Markku Rummukainen, professor of climatology at Lund Uni- versity, climate adviser for the ipcc’s national hub at smhi, and member of the Swedish Climate Policy Council, has reviewed a draft of this report at a seminar, as has Svante Axelsson, national coordinator for the Fossil Free Sweden initiative. sns thanks them both for their valuable comments. sns also wishes to thank the Jan Wallander and Tom Hedelius Foundation for its financial support. Stockholm, November 2020 mia horn af rantzien ceo, sns Publisher’s preface Summary n this report, our aim is to address the question of how policy can achieve the desired reductions in carbon dioxide emis- Isions. The report takes for granted that action on the climate issue is necessary, so the focus is not on how much less carbon dioxide we should emit, whether this be globally, nationally, locally, or individually. The question of how cannot be answered by natural science alone, but it does require an understanding of how the global climate system works and how it is affected by the concentration of greenhouse gases in the atmosphere. An understanding of how carbon circulates between different reservoirs, such as the atmosphere, biosphere, and the oceans, is needed. Social science is also required in order to understand how the global economy works and how different types of climate policy impact the use of fossil fuels and other fuels. Finally, it is important to know how international agreements can emerge and be maintained. Part 1 of this report therefore begins with a description of these complicated, interlinked systems. In Part 2, we describe Swedish climate policy and analyze it using ( 9 ) 10 Summary the systems description from Part 1, while also presenting sugges- tions for changes to Swedish climate policy. Part 3 concludes the report by providing our answers to some salient questions about current climate policy. We, the authors of this report, have all conducted research on climate issues. Our backgrounds are quite mixed; we represent different disciplines in the social sciences, law, and natural sciences. We agree on the descriptions of the climate system and the global economy, as well as on the description of the mechanisms through which climate policy has an impact and why climate policy is necessary. Conclusions about the most effective policy depend on, among other things, assessments of the relative strength of various mechanisms. In most cases, our assessments are similar and we agree on our recommendations, but occasionally our assessments differ. In those cases, this is clearly stated. Economists analyze how policy can be used to influence the deci- sions of individuals and businesses in a market, such as on the use of fossil fuels. This, along with the fact that many — but not all — of us on the Economic Policy Council 2020 are economists, has meant that our answers to how generally use economic methods, although we do not reject other approaches. We have tried to consider perspectives from other sciences whenever possible, but the composi- tion of the group has meant that these are largely outside the scope of our analyses in this report. Summary 11 1.1 Part I 1.1.1 What causes climate change? For the Earth’s climate to be in equilibrium, the incoming flow of energy from the sun must be balanced by an equal outward flow from Earth to space. More greenhouse gases in the atmosphere lead to an imbalance between the inflow and outflow of energy, resulting in an increase in the average temperature of the Earth until balance is regained. How much the temperature needs to rise before this balance is achieved is not known with certainty, because it is very diffi- cult to assess the strength of some feedback mechanisms, particular- ly cloud formation. The most commonly used interlinked global climate and carbon system models show that the global average temperature increas- es by an approximately constant number of degrees for every addi- tional emitted unit of carbon dioxide. However, there is great uncer- tainty about the quantitative relationship, because different models give different results. The ipcc provides an interval of 0.8–2.5 degrees Celsius per 1 trillion tons of carbon. So far, globally, we have released almost 600 billion tons. If sensitivity is as low as 0.8 degrees, we can release three times as much again, which would take a couple of hundred years at current emission rates, and still not exceed 2 degrees of warming.

Load more