Researchers: A coherent policy is necessary to achieve an effective climate transition

The emissions of greenhouse gases are not reduced quickly enough. Achieving the set goals requires clearer policy instruments, according to three researchers in a new SNS report.

The Swedish Climate Policy Council recently noted that Swedish climate policy is not sufficient for achieving the set goals. Three researchers arrive at the same conclusion in a new SNS report, Economic development and climate change – principles for policymaking. Unlike previous industrial revolutions, however, the climate transition is not motivated by profits. Hence, arguments have been made that current policies need to set the direction and speed of these changes.

“The emissions of greenhouse gases are decreasing, but the rate is too slow to achieve the set climate targets. This is partly due to the fact that the policy instruments are insufficient,” says Fredrik N. G. Andersson, associate professor of economics.

In the report, the researchers discuss climate policy from a structural perspective while highlighting the importance of combining different types of policy instruments. In fact, they argue, there is no neutral political position, as passive policies help preserve what is unsustainable. However, they also emphasize that special policy initiatives are mainly needed in just a small number of sectors. This is due to the fact that a large portion of the emissions from the industry come from the energy and material-producing sectors.

“Clear climate targets are important to reduce the level of uncertainty regarding the future. So far, however, policies have mainly focused on supporting innovation and start-ups. In the future, we will also need initiatives with regard to scaling up, phasing out and closing down,” says Fredric Bauer, researcher in the field of environmental and energy systems.

Setting a price on greenhouse gas emissions – such as in the EU emission trading system – represents an effective policy instrument. According to the report, however, achieving zero emissions requires additional policy measures. Examples of such measures include reducing the risk level when it comes to large green investments, stimulating the demand for sustainably produced materials or expanding the electricity and transportation infrastructure.

“From a historical perspective, seeking to transform society based on time- and number-based goals represents a new political challenge. Initial difficulties are to be expected, but they can be corrected. What matters is that there are processes in place for learning, evaluating and changing the policy measures over time,” says Lars J. Nilsson, professor of environmental and energy systems.

about the project

The report Economic development and climate change: principles for policymaking is part of the research project The Green Transition and the Business Sector, which highlights how Swedish companies are affected by stricter climate policies and how regulations and policy instruments may be designed to benefit the climate transition. The project focuses on everything from investment needs and institutional conditions to conflicting goals and vulnerabilities in production chains. The goal is to contribute with knowledge and data used to design future measures. The project timeframe is 2023–2025.

about the authors

Fredrik N. G. Andersson is an associate professor of economics at Lund University.

Fredric Bauer is a researcher in environmental and energy systems at Lund University.

Lars J. Nilsson is a professor of environmental and energy systems at Lund University.