On Wednesday, President Barack Obama held a meeting and press conference with Fredrik Reinfeldt, the Prime Minister of Sweden, in which he was asked what the US could learn from Sweden. He replied:
“What I know about Sweden, I think, offers us some good lessons. Number one, the work you have done on energy I think is something the United States can and will learn from. Because every country in the world right now has to recognize if we are going to continue to grow and improve our standard of living while maintaining a sustainable planet, we are going to have to change our patterns of energy use. And Sweden I think is far ahead of many other countries.”
That begs the question, why is Sweden so far ahead of other countries, and how can the US benefit?
Firstly, thanks to extensive investment beginning in the 50s and 60s, Sweden now generates most of its electricity from hydroelectric and nuclear power plants. And with the recent rise in wind turbine installations, the country now gets over 47% of all consumed energy from renewable sources.
Think Progress explains that this high level capacity of renewable energy generation was not luck, but the result of a strong desire to reduce dependence on imported fossil fuels, which in the mid-70s accounted for nearly 75% of energy.
Oil now only accounts for 27% of Sweden’s energy supply, and is constantly falling due to the increased popularity of biofuels. Natural Gas contributes just three percent, and coal is only really used for industrial purposes and is almost unused as a source of electricity generation. The IEA states that “Sweden has the lowest share of fossil fuels in the energy supply mix among IEA member countries.”
The biggest driver behind the push to increase renewable and clean energy generation was an early carbon tax adopted back in 1991. The carbon tax system has changed a bit over the years, increasing from $133 per tonne to $150 per tonne, and forcing consumers to pay more, and industry less, but it has been essential to help persuade people to pursue clean energy sources, and raise money that the government could invest in developing renewable energy generating capacity.
Daniel Engström, the director of the Forum for Reforms, Entrepreneurship and Sustainability in Sweden, commented that fewer people in Sweden deny the existence of climate change compared to the US, meaning that there is less opposition to investing in renewable energy. He also remarked that because oil is so expensive, and the carbon tax has been effect for such a long time, that no one actually notices it anymore.
And for any of you who think that Sweden has only reached this level of renewable energy development by over investing in one sector at the expense of the rest of the economy, Fred Bergsten, the director emeritus at the Peterson Institute for International Economics in Washington, DC, said that, “Sweden has one of the lowest inflation rates in Europe; it runs a budget surplus every year; its corporate tax rates are considerably lower than U.S. rates; and it spends more on research and development, as a share of its economy, than we do.” Whilst the most European economies collapsed in recent years, Sweden managed to thrive economically, proving that economic success does have to go hand in hand with high carbon emissions.
This piece is cross-posted with OilPrice.com with permission.