Climate strategy is a welfare issue
Europe is facing a shift political agendas. This transition will place greater focus on welfare, in both the short- and long-term, and in both policy and action. The organizations and individuals involved in social dialogue feel that the political leadership is far too indecisive and slow-moving to create new models in this time of change.
We as citizens, voters or consumers will not sit quietly and wait for political action. Welfare societies are under threat and the gap between rich and poor has widened dramatically in the wake of the financial crisis. “Business as usual” is no longer enough.
The new year should mark an era of political maturity, where smarter decisions are made (and rules set) in both politics and finance. The interplay between climate change, energy efficiency and renewable energy is one example of an area where it should be possible to act more forcefully. All of our welfare depends on it.
By necessity, our dependence on fossil fuels will be phased out, step-by-step. New sustainable social goals can emerge, even with the pressures created by declining supplies of coal, oil and gas. The cost of the dirty energy sources is rising, while that of renewable energy will inevitably drop. A UBS analysis in 2013 argued that by 2017, 30 percent of gas, coal and oil production will be shut down – not necessarily to combat climate change or air pollution, or even to reduce imports, but because renewable energy will start forcing fossil fuels out of energy market. Take the price of nuclear energy for instance, where the UK government has guaranteed a 35-year price of £92.50 per megawatt hour (Mwh). This is more than the double the amount of today’s market price for energy. Another “business as usual” deal between politics and the energy market.
The economic incentives for renewable energy are becoming more apparent. European industry can increase profits by 9 percent and create 170,000 jobs through a greater focus on energy efficiency, materials efficiency and renewable energy according to a new report entitled The New Industrial Model. At the same time, this process will reduce greenhouse gas emissions by 1,200 MtCO2e tonnes (or 14.6 percent of Europe’s total).
Some companies are already realizing the benefits. The US-based carpet manufacturer Interface has set itself a target of reducing its energy use through improved operational efficiency, aiming to use 100 percent renewable energy by 2020. It purchases clean electricity from the grid and invests it in carbon-neutral, on-site power generation. Currently, 91 percent of the electricity the company uses is from renewable sources, as opposed to 30 percent globally. Interface also uses the option of carbon offsetting so customers can ensure their purchases are more sustainable.
Recycling is another sector that is growing. This is not only crucial to protect the eco-systems ravaged by our hunt for raw materials because, as with energy efficiency, recycling has huge economic and job-creation potential. A recent EU study estimated that 400,000 new jobs could be created through the recycling industry, saving €72 billion at the same time.
The EU needs to combine climate issues, energy efficiency and renewable energy into a coherent policy for sustainable growth, rather than separating them and moving away from holistic policy. The UK government, which is acting against this type of integrated target-setting would do well to read the Westminster Sustainable Business Forum’s report on building efficiency which proposes realistic efficiency targets and incentives, while arguing that UK businesses can achieve “a cost saving opportunity of up to £1.6 billion through investment in energy efficiency”.
The EU knows this only too well. According to its own long-term trend analysis, a policy based on “business as usual” will meet neither its target of a decarbonated EU by 2050 nor the climate change target of less than 2 degrees Celsius.
Nordic countries can show the way. With 25 million people and a combined GDP of about $1 trillion, they can have a direct impact and inspire followers in Europe and around the world. A report from the business-oriented Think Tank, Global Utmaning (Global Challenges), shows that carbon-neutrality is a possibility. It proposes a way to viably reduce energy-related CO2 emissions by 85 percent and cover the remaining 15 percent offset with international carbon credits.
As early as 2012, Sweden achieved the EU target for 2020 of using renewables for 10 percent of its transport sector and 49 percent of the total energy mix. Energy use from fossil fuels decreased and now bioenergy is more of a major resource than oil. Sweden’s total electricity consumption has decreased by about 1 TWh per year since 2001, with industrial energy use on the decline since 1970.
But of course there are challenges. Nuclear power energy loses has increased to 110 TWh in 2010 (as well as the additional cost, of course).
The transport sector, and especially Sweden’s vehicle fleet, also remains a problem. But change is happening in these areas too, thanks in part to some promising collaboration with forward-thinking Asian partners.
More can be done. The goal for 2020 should be further reductions in energy use, greater efficiency and setting new renewables targets for 2030. We are ready to realize the goal of a fossil-free transport sector when political decisions are in place, says Vice President of the Swedish Bioenergy Association, Lena Bruce.
There are also a number of areas in which Sweden and the Nordic countries can provide models of collaboration with other countries, within and outside Europe. Take the example of district heating and cooling, where the Nordic experiences can be used as a resource to stimulate improvements in similar, but less efficient, systems in central and eastern Europe. Sustainable urban development is a beneficial Nordic brand but it can also be a powerful force among other world cities.
The Nordic forestry and bioenergy industries already have leading global positions which can also mean a lot for the future development of society, especially when it comes to transport. The growth of these sectors can contribute with new fuels and the processing of raw cellulose for new industrial development.
Swedish multinationals such as Fortum, Eriksson, H&M, Skf, Abb and Ikea have successfully demonstrated attempts to be part of a global transition towards growing sustainability and renewable energy. Take Fortum’s and Abb:s sustainable urban development, Skf’s ball bearings for wind power, Ikea’s investment in solar energy and green technology, H&M’s supply chain reform and Ericsson’s work with Stockholm Royal Seaport and the UN Sustainable Development Goals. And there is now more space for small, green companies to produce solutions for huge growth markets in the US, China and Africa.
Now is time for politics to act decisively. Leadership must be braver and politicians must take a step towards Sustainable Development.
If they do, there might be more chance of attracting interest from voters ahead of both the European elections and upcoming Swedish election later this year.