Scenarios for a Swedish Green Economy

«Watch the video from the launch of the report (in Swedish)»

These are the broad conclusions in a new report from Stockholm Environment Institute (SEI), the Swedish Defence Research Agency (FOI), the Swedish Confederation for Professional Employees (TCO) and the Swedish Agency for Growth Policy Analysis (Tillväxtanalys). The report is designed to serve as a basis for discussion of the government’s roadmap for how Sweden will navigate towards sustainable development without impacting upon climate change.

The concept of the ‘green economy’ is often advocated as a remedy for market failures and shortcomings in our current model of development. Although there is no common definition of ‘green economy’, this report concludes that it is an essential component in economic policy making if we are to preserve prosperity, security and competitiveness. The exclusion of natural capital in the economic model worked for as long as the world economy was relatively small. But today, the world has come to a crossroads defined by scarcity.

“More and more economists realize that we must develop our economic models to account for ecosystem services and natural resource assets,” says Karl Hallding, SEI. “A green economy is not a matter of having ‘green’ values. It is a question of developing the economic system so that our communities are resilient to change and prepared to cope with a future that will bring great pressures and challenges.”

Karl Hallding, lead author of the report and research theme leader for Rethinking Development at SEI, sees advantages for Sweden in a transition to a green economy:

“Sweden has some comparative advantages, especially in the ratio of landmass to population size”, says Karl Hallding. “The country already obtains a large proportion of its electricity from hydropower and has huge potential for bio- energy and wind power. The population is well educated and society is well organized. If Sweden can’t reach zero net emissions in 2050, which country can?”

The report describes two basic challenges facing the world today: degraded ecosystems and increasing pressure on natural resources. These have a negative impact on global prosperity and the stability of the international financial system. Coupled with a number of driving forces and uncertainties, these challenges form the basis for the four global scenarios in the report. Using these scenarios, the authors tested how different policy measures might work in relation to global trends.

If Sweden does not act, the report says, it may be more expensive in the long run and Sweden may be forced to adapt to external circumstances.

“Prosperous, democratic Sweden may be comparatively well placed to push green economic solutions, but doing so will involve tough decisions and trade-offs,” says Karl Hallding. “Acting early to position Sweden at the forefront of a resource efficient, green economy is a way for Sweden to maintain its freedom of action. Finding workable policy solutions will be crucial and this study offers innovative ways of formulating them.”