3.1 Introduction

Sweden’s climate policies are intertwined with international events and politics. As a small, export-dependent country, Sweden’s climate policies are shaped by developments in other countries. At the same time, Sweden has a legacy of leading by example globally and in the European Union (EU). By influencing the EU to tighten its climate and energy policies and by being an active member of various international climate coalitions and initiatives, Sweden has positioned itself as an active player in the EU and global climate politics. This chapter explores whether Sweden’s historical image as an international climate leader still holds up and whether it continues to influence and be influenced by the international context.

Reducing greenhouse gas (GHG) emissions from energy-intensive industries such as cement, steel, and aluminum, for instance, is heavily dependent on the efficacy of the European Green Deal (EGD), the EU’s emissions trading scheme (EU ETS), the EU’s climate and energy policy, and intergovernmental climate coalitions, such as the Industrial Transition Group (LeadIT). Consequently, whether Sweden will be able to achieve its goal of becoming a fossil-free welfare state by 2045 is predicated on the success of policies, instruments, and events outside its direct sphere of influence. Historically, Sweden’s GHG emissions, energy, and climate policy have been heavily influenced by international events (such as the oil crises) and institutions (SCPC, 2022). While there has been a significant reduction in GHG emissions since the peak in 1970, this is largely a result of unintentional actions rather than regulation and policy targeting climate change (Reference Elander, Granberg and MontinElander et al., 2022; Reference Lindmark and AnderssonLindmark and Andersson, 2010; SCPC, 2023).

Against this backdrop, this chapter examines Sweden’s emissions trends and the evolution of climate policy from an international perspective by focusing on its role and interdependent relationship with climate action in the EU and with international climate coalitions. The first section describes and compares Sweden’s national emissions profile, energy mix, and national GHG emission reductions in the period until the adoption of the 2015 Paris Agreement and the 2017 Climate Policy Framework, which are discussed in Chapter 4. The second and third sections examine the interaction between Sweden’s and the EU’s climate governance, as well as various international climate coalitions and initiatives beyond the United Nations Framework Convention on Climate Change (UNFCCC). The final section critically reflects on Sweden’s image as a global frontrunner, as it struggles with high consumption-based emissions, as well as emissions from the transport sector and energy-intensive industries.

3.2 Greenhouse Gas Emission Trends in Sweden

Sweden’s GHG emissions have significantly decreased after peaking in the 1970s. The most significant emission reductions took place after the oil crises in the 1970s before the UNFCCC was adopted in 1992. Figure 3.1 presents Sweden’s emission pathway compared to the two largest emitters in the world, China and the USA, as well as the EU and Germany. The figure shows territorial emissions, that is, emissions that occur within a country’s territorial borders, including exports but excluding imports, and are weighted by population using per capita emissions (GHG/capita) to enable comparison between economies of different sizes. The figure shows how Sweden has followed a similar downward trend in GHG emissions in line with other major industrial countries and regions in the Global North such as the USA and the EU, albeit at a faster pace than Germany, for example. Reference Lindmark and AnderssonLindmark and Andersson (2010, p. 2) note that between the peak of emissions (derived from domestic economic activities) in the 1970s and the late 1980s, Sweden achieved a 40 percent reduction in emissions. The reduction rate flattened out significantly in the subsequent years and, between the early 1990s and up to 2005, only achieved a 5 percent reduction in emissions.

Figure 3.1 Territorial CO₂ emission per capita (excluding land use), 1950–2021 (own calculations based on Our World in Data, 2023a)

The steep decline in emissions during the 1970s and 1980s is attributable to the policies and programs which were triggered by international events, notably the oil crises in the 1970s, which started with an OPEC oil embargo, sending oil prices skyrocketing by around 300 percent, shifting the focus of Swedish energy policy toward reducing dependence on fossil-fuel imports by improving energy efficiency and energy conversion in district heating systems. The policy changes, partly due to concerns about energy security, would have implications for Sweden’s GHG emissions long into the future. Lindmark and Andersson call it “unintentional climate policy” and attribute the pre-1990s emission reductions to the major gains that were made in energy efficiency (mainly in industry and housing), energy substitution (investments in hydropower, nuclear energy, and district heating), and the structural changes (notably fiscal policy) that were made to reduce Sweden’s dependency on energy imports (Reference Lindmark and AnderssonLindmark and Andersson, 2010). Furthermore, the economic crisis in the early 1990s spurred another set of important reforms that were more directly geared toward the environment and climate (see also Chapter 9 on crises). In 1991, Sweden was one of the first countries in the world to introduce a carbon tax, as well as a range of environmental taxes that directly impacted the energy sector. For instance, a tax of SEK 30.00 per kilo was levied on sulfur dioxide emissions from coal and peat in combination with a tax on the sulfur content in oil. A CO₂ tax of SEK 0.25 per kilo was introduced in 1991 and was subsequently increased in 1992. Industry and manufacturing received significant exemptions, which were gradually reduced until being completely removed in 2010 for industries covered by the EU ETS (Reference Färe, Grosskopf, Lundgren, Marklund and ZhouFäre et al., 2016). The COVID-19 pandemic also precipitated a record-breaking reduction in GHG emissions. The Swedish Environment Protection Agency (SEPA) reported a 9 percent reduction between 2019 and 2020, primarily from the industry and transport sectors, as car traffic and domestic flights, as well as demand for iron and steel, fell rapidly. Most of the GHG emission reductions were temporary as they rebounded in years after the pandemic (SEPA, 2021, p. 11).

Figure 3.2 shows how GHG emissions in Sweden have continuously declined across the economy over the past 30 years. Sweden reduced its territorial emissions from just over 70 million tons in 1990 to 47.8 million tons of CO₂ equivalents in 2021, representing more than a 30 percent reduction over 30 years (SEPA, 2023a). If the steep decline following the COVID-19 pandemic is included, Sweden reduced its GHG emissions by 33 percent between 1990 and 2021. Between 1990 and 2020, the largest emission reductions were made between 2003 and 2014, primarily due to the expansion of district heating systems, reduced use of fossil fuels for heating of buildings, and increased use of biofuels in industry (SEPA, 2021).

Figure 3.2 Swedish GHG emissions per sector, 1990–2021 (own calculations based on SEPA, 2023b)

Sweden has also been effective in reducing its territorial emissions compared to other countries. It “decoupled” its economic growth (in GDP) from CO₂ emissions (in absolute terms) as early as 1996 (Reference Andersson and LövinAndersson and Lövin, 2015) and has consistently been among the countries with the lowest GHG emissions per GDP in the EU (EEA, 2016), which, in turn, has the lowest CO₂ emissions intensity of GDP of major economies such as China, USA, India, and Japan (IEA, 2023).

As will be further examined in Chapter 4, despite the rapid reduction in emissions from the peak in the 1970s, Sweden is not on track to reach its goals. The overarching climate target as part of Sweden’s Climate Policy Framework (see also Chapter 4) is to achieve net-zero emissions by 2045 and negative emissions thereafter. More specifically, the framework states that Sweden must have lowered its emissions in the non-trading sector (i.e., emissions that are not part of the EU ETS) by 85 percent by 2045 compared to 1990, and the remaining 15 percent of emissions reductions should be derived from supplementary measures, for instance offsetting in other countries. Such measures can also be used for negative emissions beyond 2045 and include the uptake of carbon from natural sinks such as forests, emissions reductions outside Swedish borders, as well as bioenergy with carbon capture and storage, also called “BECCS” or “Bio-CCS.” Sweden also has separate interim targets for 2030 of 63 percent emission reductions compared to 1990, and a 75 percent reduction by 2040, of which 8 percent and 2 percent, respectively, should be derived from supplementary measures. There is also a national interim target for 2030 for the domestic transport sector, in which emissions should be 70 percent less compared to 2010. This sectoral target has no equivalent in EU legislation, and it has been questioned on the grounds of cost-effectiveness (Reference NilssonNilsson, 2023). As early as 2021, the Swedish Climate Policy Council (SCPC) projected that the current pace of reduction would not be sufficient to reach the 2045 target of carbon neutrality as it would have to exceed the period with the most rapid reduction thus far (2 percent annual reduction between 2005 and 2014) by a factor of three in order to reach the 6 percent annual reduction in emissions needed, including supplementary measures, or 10 percent without such measures (SCPC, 2021). In both SEPA’s (2023a) background report to the government’s climate action plan and the 2023 report of the SCPC, the Swedish government was advised to accelerate emission reductions to close the implementation gap of 9–12 million tons, not least in the transport and agricultural sectors. In some sectors of the economy, the pace of emission reductions needs to accelerate even more in order to radically break with current consumption and production patterns. In the transport sector, for instance, emission reductions from 1990 up until the present time could have been much greater if more fuel-efficient cars and trucks had been used and the emission reduction obligation scheme for blending petrol with biofuels had been introduced at an earlier stage (SCPC, 2021). However, as will be discussed further in Chapter 4, in July 2023, the Swedish government proposed changing the abovementioned obligation to decrease biofuel blending in diesel and petrol to a minimum level and subsequently abolish the law (Swedish Government, 2023). The decarbonization of the transport sector is a very slow process and is a long way from the target of a 70 percent reduction by 2030 compared to 2020 levels (Reference Haikola and AnshelmHaikola and Anshelm, 2023; Reference Niskanen, Anshelm and HaikolaNiskanen et al., 2023). However, the number and size of vehicles on the roads have increased over the same period. Swedish people increasingly choose to drive large, heavy, and fuel-intensive vehicles such as SUVs at the expense of smaller and more efficient vehicles. Journalists at the Swedish National Broadcasting Agency (SVT) calculated that in the mid-1990s, 1 in 5 cars weighed less than 1 ton; in 2020, that figure had decreased to 1 in 50 (SVT, 2020). The European Environmental Agency (EEA) has confirmed this picture, reporting that in 2018, the heaviest cars in Europe were in Sweden and Luxembourg (EEA, 2022). Consequently, emissions from the Swedish car and truck fleet will need to be reduced by 8 percent annually if the 2030 target for domestic transport is to be reached.

3.3 Implications of the EU’s Climate and Energy Policy for Sweden’s Decarbonization

Sweden’s climate policy and pathway to decarbonization is closely intertwined with climate and energy policy in the EU, which has been significantly strengthened with a European Climate Law (EU, 2021), as well as strengthened climate targets for 2030, 2040, and 2050, respectively. In this section, we outline how developments in the EU’s climate legislation impact the prospects for Sweden to achieve its national climate targets. Moreover, Sweden held the EU Presidency EU for six months between January and June 2023 when the final elements of the Fit for 55 climate package were being negotiated as part of the EGD (European Commission, 2019). As noted in several reports by the Swedish Climate Policy Council (2023), the SEPA (2023a), and the Expert Group on Public Economics (Reference NilssonNilsson, 2023), the European Climate Law, the Fit for 55 package, and the upcoming 2040 climate and energy framework represent an unprecedented climate and energy legislation reform package in terms of scope and ambition. The EU climate targets for 2030 and 2050 have been strengthened and backed up by an expanded EU ETS and requirements to increase the uptake of carbon in forests and on land. It comprises more stringent climate targets, a new EU ETS to include transport and buildings, as well as new policy instruments such as the Carbon Border Adjustment Mechanism (Reference NilssonNilsson, 2023; SCPC, 2023). The EU’s climate legislation has been significantly tightened, and in certain aspects, it will have greater demands than the Swedish national climate targets for 2030, 2040, and 2045, respectively, which are at risk of becoming outdated (ibid.). For instance, the LULUCF regulation means that Sweden must increase its net carbon storage in landscapes and wood products and impose a national carbon removal target – which Sweden lacks and which is not one of its national goals (Reference NilssonNilsson, 2023). Sweden’s strengthened EU commitment to increase net storage by an equivalent of 4 million tons by 2030 compared to 2016–2018 levels is regarded as being difficult to reach (SEPA, 2023a). Consequently, Sweden’s national climate goals and ambition are lagging behind, not least the sectoral goal of transport. This is amplified by the Conservative government’s proposed rollback of climate legislation, such as the emission reduction obligation scheme for biofuel blending of petrol and diesel (Swedish Government, 2023), which is predicted to lead to an increase in emissions (SEPA, 2023a). Consequently, in some areas, the EU’s goals are more stringent than Sweden’s own goals. The EU’s allocation of emissions cuts under the Emission Sharing Regulation (ESR) for Sweden for 2030 corresponds to a 50 percent reduction in emissions compared to 2005, which is less than the national goal of 63 percent. However, the commitment within ESR comprises an emission budget for the entire period from 2021 to 2030, which means an annual allocation of an amount of emissions until 2030. In contrast, Swedish national targets specifically apply to 2030, 2040, and 2045, respectively. In the next section, the interlinkage between Sweden’s and the EU’s instruments, notably the EU ETS, is discussed.

3.3.2 The Interconnection of Sweden’s Climate Policy with the EU’s Policy Instruments

The EU’s climate policies are of direct relevance for Sweden as some 35–40 percent of Swedish emissions are covered by one of the EU’s most important instruments to reduce emissions – the EU ETS (see Figure 3.3). The EU ETS targets industry emissions from energy-intensive industries that operate in Sweden, such as the aluminum and paper industries and oil refineries, 500 aviation companies, and, from 2024, around 1,500 shipping companies. From 2027, a new EU ETS system will include emissions from road transport, the building sector, and parts of the industrial sector. The Swedish climate targets for 2030 and 2040 include emissions from industry covered by EU ETS, contradicting EU legislation, which states that these should be dealt with by the EU-wide trading sectors (Reference NilssonNilsson 2023). Finally, the transport sector target excludes emissions from domestic flights, as aviation is covered by the EU ETS.

Figure 3.3 Swedish GHG emissions part of the EU ETS, 2005–2021 (data from SEPA)

In the trading (EU ETS) sectors – broadly divided into industry, energy, and heat production – GHG emissions in Sweden decreased by 27 percent from 1990 to 2020, with a major reduction of 12 percent from 2019 to 2020, primarily related to reduced economic activity as a result of the COVID-19 pandemic. Most emission reductions in the trading sectors are from energy and heat production due to the increased use of waste and biofuels at the expense of fossil fuels. Consequently, Sweden’s ability to reduce its GHG emissions from important basic industries, often located in rural areas with scarce populations, hinges on the success of the EU ETS in designing and negotiating an effective emissions trading scheme that incentivizes corporations to innovate and reduce their emissions. The expanded and reformed EU ETS – as part of the Fit for 55 package – will limit the granting of new emission allowances, which will also be prohibited from 2039. Under the ESR, each member state is allocated an annual emissions quota that gradually decreases. The total allocation for all member states in 2030 corresponds to a 40 percent reduction in GHG emissions compared to 2030. For non-trading sectors (e.g., transport, building, and agriculture), the EU has set goals for its members under the ESR. The goals are based on GDP per capita, and for Sweden, the ESR allocation translates into a target of 50 percent reduction of GHG emissions for the period 2021 to 2030 compared to 2005 levels. This is currently slightly less demanding than the Swedish national goal, which is 63 percent. Unlike the EU ETS – where the EU is responsible for the negotiation and implementation of the instrument – the ESR leaves it up to the member states to design and implement policies. Such policies could include changes to modes of transport, retrofitting buildings, and changes to agricultural practices, that is, instruments that are customized to the emissions profiles of the individual countries. For Sweden, the lion’s share of non-ETS emissions is derived from transport and, to a lesser extent, agriculture (see Figure 3.3). Because of the difficulty of reducing emissions from the agricultural sector, emissions from the transport sector should decrease by 40 or 50 percent between 2021 and 2030 to fulfill the targets allocated under the ESR for Sweden (Reference NilssonNilsson, 2023; SEPA, 2023a). During 2022 and 2023, there was a weakening of policies regarding emissions from the transport sector, for instance biofuel blending. In the report by the Swedish Environmental Protection Agency (SEPA, 2023a), which provides input for the 2nd Climate Policy Action Plan in 2023, emissions are expected to increase in the near future because of the weaker climate legislation in Sweden (SEPA, 2023a).

Going forward, emission reductions from Swedish industry remain an issue as they would have to outperform themselves compared to previous years. In the non-trading sectors, emission reductions are around 36 percent less compared to 1990, with a major reduction (−6.4 percent) from 2019 to 2020 due to COVID-19 (see Figure 3.3). The major reduction in emissions from 2019 to 2020 puts Sweden on a path to reach its interim targets for the non-trading sectors, assuming supplementary measures are used to their fullest potential. However, it is clear that Sweden’s overall ambition to become fossil free by 2045 is contingent on how well the EU ETS manages to address emissions from the industrial sector and electricity production, which creates a strong incentive for trying to influence European climate policy toward achieving more ambitious goals and targets.

3.4 Sweden’s Role in International Climate Collaboration and Clubs: Beyond the EU

While EU climate and energy legislation is arguably an important part of emission reduction efforts in Sweden, governance and collaboration at the international level also play an important role regarding Sweden’s climate policy. Sweden has historically taken a proactive and ambitious stance in global climate negotiations. For example, the Kyoto Protocol to the UNFCCC, adopted in 1997, introduced emissions trading as one of three flexible mechanisms for reducing GHG emissions from, in particular, industry and energy production. The Swedish government lobbied hard for an ambitious climate policy during the first commitment period of the protocol, which started in 2008 and ended in 2012. Perhaps due to its 30-year experience of the consequences of “unintentional” climate policy, as previously discussed, Sweden adopted a “higher than needed” commitment during the first period of the Protocol. While Sweden was allowed to increase its emissions by 4 percent from 2008 to 2012 compared to 1990 levels, in 2002 it decided to reduce its emissions and did not exceed 96 percent as a mean value from 2008 to 2012 compared to the 1990 level, without using any supplementary measures, such as buying emission credits on the international market. This has led some observers to call Sweden a “theoretical anomaly” since it does not adhere to the conventional wisdom associated with theories of international relations and negotiation (notably “social dilemmas” and “tragedy of the commons”) in which countries are expected to strive to do the bare minimum required for cooperation (Reference ZannakisZannakis, 2009, p. 9). In the following section, however, we focus on how Sweden engages in international climate initiatives to pursue its interests, complementing the international negotiations under the UNFCCC.

At the international level, Sweden is represented by the EU at international negotiations on climate change under the auspices of the UNFCCC. However, this has not prevented Sweden from joining various climate coalitions and initiatives. For example, Sweden joined the High Ambition Coalition at COP21 in Paris in 2015 – an informal coalition that has been described as an important force for ensuring a successful outcome in Paris (Reference BrunBrun, 2016). Sweden has also been active in pushing for stronger climate action through a number of initiatives outside the UNFCCC. While the UNFCCC negotiations are often slow and arrive at agreements that cover the lowest common denominator, the proliferation of climate coalitions and initiatives has been strong in recent years (Reference Falkner, Nasiritousi and ReischlFalkner et al., 2022). These types of groupings seek to push other countries to adopt more ambitious climate goals and actions in different ways. They are typically started by a few countries that have made a domestic commitment in a particular issue area, and then these countries work to encourage other countries to join the initiative.

Sweden is involved in many such initiatives, often as a founding member. In addition, many Swedish non-state and sub-state actors are involved in transnational climate initiatives, including various municipal and city networks. There are also a range of multi-stakeholder initiatives, often led by states in partnership with non-state actors. An analysis of participation in such climate coalitions and initiatives can provide an indication of issue areas that Sweden prioritizes internationally and insights into Sweden’s climate policy in an international context. In what follows, initiatives that focus on different aspects of climate action in which Sweden participates will be highlighted. The aim is not to provide an exhaustive list of climate coalitions and initiatives in which Sweden participates but rather to provide examples of different issue areas that Sweden works with at the international level to provide insights into fields that Sweden seeks to take the lead in or influence.

First, as a pioneer of carbon pricing, Sweden has been involved in sharing best practices and has joined several initiatives with the aim of spreading carbon pricing policies internationally. For instance, Sweden is involved in the Carbon Pricing Leadership Coalition (CPLC, 2019; Reference Wettestad, Gulbrandsen and AndresenWettestad et al., 2021) and the Coalition of Finance Ministers for Climate Action. While the aims and functions of these two initiatives differ, they both promote the spread of carbon pricing as an effective tool for climate mitigation. Since Sweden has used carbon pricing since the 1990s through such climate initiatives, it can use its experience for knowledge exchange in support of actors who wish to introduce carbon pricing (Reference DominioniDominioni, 2022).

Second, due to Sweden’s history of industrial innovation, it has been involved in climate initiatives aimed at industrial transformation and technological innovation. Most notably, at the UN Secretary General’s Climate Action Summit in September 2019, Sweden and India, in cooperation with the World Economic Forum, launched the Leadership Group for Industry Transition (LeadIT). The initiative gathers countries and companies that work toward decarbonizing energy-intensive industries with the aim to achieve net-zero carbon emissions by 2050 and involves public-private collaboration and knowledge exchange (Reference Johnson, Mete, Sanchez, Shawoo and TalebianJohnson et al., 2021).

Third, in the field of clean energy, Sweden participates in several climate initiatives, such as the Clean Energy Ministerial and Mission Innovation, which seeks to advance clean energy technologies (Reference Tosun, Heinz-Fischer and LuoTosun et al., 2023). As part of the Clean Energy Ministerial, Sweden is leading one initiative and one campaign: the Super-efficient Equipment and Appliance Deployment Initiative and the Power System Flexibility Campaign. Sweden is also a member of the Friends of Fossil Fuel Subsidy Reform – an informal group of non-G20 countries that seeks to encourage other countries to phase out inefficient fossil-fuel subsidies in order to decarbonize the energy sector (Reference Skovgaard and Van AsseltSkovgaard and Van Asselt, 2018). At COP26 in Glasgow in 2021, Sweden also joined the Beyond Oil & Gas Alliance, which gathers actors seeking to facilitate a managed phase-out of oil and gas production. Given that Sweden has minimal fossil-fuel energy resources, joining the Beyond Oil and Gas Alliance can be seen as a symbolic move to put pressure on other countries (Reference Abnett and JacobsenAbnett and Jacobsen, 2021).

Fourth, in the field of finance, Sweden has been involved in pushing for several initiatives that seek to channel finance flows away from high-carbon sectors and into low-carbon sectors. For instance, through the Fourth Swedish National Pension Fund, Sweden co-founded the Portfolio Decarbonization Coalition, which works to mobilize financial markets to support economic decarbonization (Reference Andersson, Bolton and SamamaAndersson et al., 2016).

Finally, Sweden was one of the founders of the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants (CCAC), which is a partnership between governments and other actors working to reduce short-lived climate pollutants, such as methane and hydrofluorocarbons (Reference Unger and ThielgesUnger and Thielges, 2021). Sweden supports many other coalitions and initiatives that seek cooperation between countries and non-state and subnational actors on decarbonization, such as the 2050 Pathways Platform, which supports actors in their development of long-term decarbonization strategies through the sharing of knowledge and best practices.

This overview of Sweden’s involvement in climate coalitions and initiatives highlights its willingness to engage with state and non-state partners globally to advance climate action. However, such initiatives are non-binding and voluntary, and the effects of this engagement can therefore be difficult to gauge. Nevertheless, through sharing information and best practices in cooperation with a multitude of actors, Sweden works to spread its approach to decarbonization to other countries. This is in line with the literature on climate leaders and the way they work to encourage their supporters to adopt similar approaches to climate governance (Reference Wurzel, Liefferink and TorneyWurzel et al., 2019). However, it also demonstrates that Sweden tends to join initiatives that can play to its strengths, that is, where the domestic agenda is already geared toward a particular issue. Notably absent are coalitions or initiatives that would require any meaningful changes in how Sweden conducts its domestic climate policies in politically contested fields such as forestry or consumption. Hence, Sweden forms or joins coalitions where it can act as a leader to influence and support like-minded countries to adopt similar policies, such as carbon pricing or industrial decarbonization. In other words, Sweden seeks to influence issues where it can strengthen its international competitiveness or where it can be portrayed as a leader, building on its image as a global frontrunner.

3.5 Sweden’s Frontrunner Role: Three Cautionary Tales

As the preceding sections in this chapter have demonstrated, Sweden has made substantial progress over time in terms of reducing its national GHG emissions. However, while Sweden’s decarbonization since the 1970s has outperformed many other industrialized countries, there are at least three cautionary tales to be told when scrutinizing Sweden’s progressive climate politics. In the following, we briefly problematize issues of (a) performance and leadership; (b) consumption-based versus production-based emissions; and (c) global climate footprint to put Sweden’s efforts in an international perspective.

3.5.2 Accounting: Production-versus Consumption-Based Emissions

Swedish emissions reductions are generally calculated based on production and exclude consumption-based emissions. This is important because Swedish emission reductions over the past 50 years have coincided with a transition in the global economy in terms of where manufacturing takes place, as well as a transition in import and export patterns. Large segments of the manufacturing sector – from toys to telephones – have moved away from highly industrialized countries such as Sweden toward countries in transition and in the Global South, primarily China. Instead of Sweden producing and consuming goods domestically, it has become heavily reliant on the import of goods from low-income countries. Manufacturing is often associated with CO₂ emissions, which is reflected in global emission patterns as China has overtaken the USA as the world’s largest emitter. Figure 3.4 demonstrates the difference between consumption-based emissions and production-based emissions in four countries, including Sweden, and the EU-27 average. The data show that Sweden clearly has the largest discrepancy between consumption- and production-based emissions and that the trend is largely stable. While the USA, for instance, has seen a less dramatic reduction in emissions compared to Sweden, the discrepancy between production- and consumption-based emissions is much smaller in the former than in the latter. China’s negative delta shows that it has higher production-based emissions per capita than consumption-based emissions, corroborating the narrative of the country as being the factory of the world.

Figure 3.4 Difference between consumption- and production-based CO₂ emission (in tons), 1990–2020 (own calculations based on Our World in Data, 2023b)

In the event that there was a growing discrepancy difference between consumption- and production-based emissions, Sweden risks further outsourcing its emissions to other parts of the world by importing carbon-intensive goods.

A move from production- to consumption-based emission accounting methods could accommodate changes in global manufacturing patterns, particularly on a per capita basis. For Sweden, using a consumption-based accounting method might reveal the consequences of being a rich, high-consumption society and nuance the image of Sweden as a climate champion. As will be further discussed in Chapter 4, Sweden’s consumption-based emissions are calculated annually by Statistics Sweden (SCB). In 2020, there were around 79 million tons of CO₂ equivalents, compared to around 48 million tons of production-based emissions the same year (SEPA, 2023c). Consumption-based emissions decreased between 2008 and 2020 by around 27 percent, partly due to COVID-19. To further reduce consumption-based emissions, Sweden was the first country in the world to propose a consumption-based emissions target through an investigative government commission on carbon footprints. Sweden’s cross-party parliamentary Environmental Targets Committee proposed a new national climate target for Sweden’s consumption-based emissions, as well as a new goal for the climate benefits of Sweden’s exports (SOU, 2022). The proposal for a new national goal was based on the idea that Sweden should have a negative global climate footprint by 2045, which could be achieved by having climate targets for (a) territorial emissions, (b) consumption-based emissions, and (c) the climate benefits of exports (SOU, 2022, p. 29).

3.6 Conclusion

In this chapter, we have demonstrated that Sweden has been successful in significantly reducing its GHG emissions since the 1970s, in particular from industry and district heating, and as a corollary of the oil crises in the 1970s. However, during the past 20 years, its emission reduction rate has declined, with the exception of 2020, due to the COVID-19 pandemic (SCPC, 2023, 2022). Swedish emission reductions are a result of visionary and ambitious public policy and investments, often related and responding to external and internal shocks unrelated to climate change and deliberate climate policy. Moreover, the transition toward decarbonization has been facilitated by Sweden’s virtually fossil-free electricity production due to hydropower, nuclear power, and renewable energy. Over the past 50 years, Sweden has established itself as a global frontrunner and has adopted ambitious climate goals and laws for the future. However, this chapter also highlights important challenges for the road ahead and suggests that some caution and nuance are warranted regarding the perception of Sweden as a frontrunner. Public agencies such as the SEPA and the SCPC argue that the EU has now taken over Sweden’s leadership role through the recently adopted Fit for 55 package with strengthened climate targets, which in certain areas exceed Swedish national climate goals in ambition and scope. First, Swedish climate policy across several domains – mainly the base industry – is deeply interconnected with the EU’s climate law, legislation, and instruments under the new Fit for 55 package, which includes a reformed EU ETS, stricter ESR regulation, and national targets for net storage in the LULUCF regulation. Consequently, given the EU’s strengthened climate legislation, Sweden’s ability to achieve the 2045 net-zero emissions largely rests on accelerating its emission reductions in the transport sector, land use, and forestry sector, as well as the agricultural sector. Second, in the non-trading sector covered by the Swedish ESR allocation (e.g., transport and agriculture), the Swedish record on reducing emissions is less impressive. Domestic transport emissions need to be reduced by 50 percent compared to 2021 to achieve the 2030 transport sector target. This is hampered by Sweden’s large and heavy car fleet, which offsets the gains made in fuel efficiency and electrification. Moreover, the incumbent conservative government has pledged to change the law requiring biofuel blending in petrol and diesel to a minimum EU requirement. Agriculture emissions have followed a similar pattern and reductions are much slower. This begs the question as to whether the low-hanging fruits have been picked and those that are hard to reach have been left behind. Third, Sweden’s emission reductions are partly a result of global changes in production, where the burden of emissions is placed on lower-income countries and countries in transition. A study of Swedish consumption-based emissions and its carbon and ecological footprint suggests that, in the unlikely event that the national emission targets are achieved under the current accounting rules, this may be at the expense of the ability of other countries to decarbonize, in particular in the Global South. Thus, this chapter has attempted to nuance the portrayal of Sweden as a global climate leader. While the country has come relatively far in reducing its emissions compared to other advanced industrialized states, Sweden has had favorable conditions because of an early phase down of fossil fuels in reaction to the oil crises in the 1970s and decarbonized electricity production with hydropower, nuclear power, and renewables (wind power, solar power, and bio energy). This highlights the important role of political decisions in driving change. This chapter also highlights how Sweden both influences and is influenced by the global context. While Sweden seeks to lead in some areas, such as the sharing of best practices on carbon pricing, it has played more of a delaying role and has been a veto player in the regulation on land use and forestry and the EU’s nature restoration negotiations. The chapter thereby contributes to a better understanding of multilevel governance in the EU and international climate cooperation and shows the EU’s close interactions with domestic politics in Sweden.