KTH Royal Institute of Technology: Economics researcher: Invest more in the climate

Larger investments in the climate even if it means less money for other things now, but that can easily profit future generations. This is an important step along the way to meet Sweden’s climate goals according to Cecilia Hermansson, an economics researcher at KTH and vice chair of the Swedish Climate Policy Council.

Portrait of Cecilia Hermansson.
Cecilia Hermansson.
“I would like to see a big picture perspective when we ask ourselves what is the most important thing to do. Generations that follow us can benefit more from what we invest in today for sustainable development than if we save this for the future. Over a ten-year period, we may have to have the courage to accept a deficit in our finances,” says Cecilia Hermansson, one of eight researchers on the Swedish Climate Policy Council.

This interdisciplinary expert body scrutinizes whether government policies are aligned with climate goals and would genuinely lead to Sweden no longer contributing to increased levels of greenhouse gases in the atmosphere by 2045. So-called net zero emissions. In its latest report, the Council argues that the government is still not doing enough.

“There is scope to do a whole lot more. Right now, Sweden is in the process of building up an emissions liability, we are falling behind the rate necessary for emissions to fall.”

One focus issue ahead of the next report to be released in March 2022, is what political instruments and investments are needed to reach these goals.

Tougher policies
Economic policy is important and Hermansson hopes the government budget can be a more effective tool in the climate reset.

She would like to see a review of the rules that govern the government budget structure, the fiscal policy framework. The directives on how big the national debt can be and that government finances should deliver a certain surplus may need amending to offer scope for bigger climate investments for a period, she believes.

She names political courage as one key to Sweden achieving its climate goals.

“There can often be conflicting goals in crucial issues. You cannot duck these as a politician if we are to make progress in the climate issue. It is therefore important not to let issues such as forestry or fuel remain unresolved, they must be dealt with instead, and tackled as soon as possible,” Hermansson says.

As alarming reports on the state of the planet arrive at an increasing rate, more and more people are wondering why the climate crisis is not being met with tougher climate policies. Hermansson feels the government should be clearer about what measures need to be taken to enable the transition to work. The enterprise sector is asking for regulation that means companies are able to compete on equal terms, she says.

“I also believe that it is important for us to be open about the climate consequences that will follow from the budget proposals that are presented.”

More charging stations
The issue of biofuels is high on the Climate Council agenda. Hermansson thinks there is too much faith in the so-called obligation to reduce emissions from private cars and the directives on petrol and diesel having to contain a certain proportion of biofuel. One problem is that other sectors, such as goods vehicles and industry, also need to use bioenergy.

“There is a risk that far too many people and companies are going to compete for this biofuel, and demand will outstrip supply.”

She would rather see a more rapid switch to electric vehicles instead. The expansion of charging points for electric vehicles along roads and in towns and cities needs to be implemented faster than planned, she argues.

Regarding COP26, the ongoing UN Climate Change Conference in Glasgow, she has a wish list concerning issues such as emission rights, air travel and concrete action plans.

“The most important thing is to review the goals and that they are combined with measures that mean we can reach the goals. But our expectations must not be too high. Having said that, it is incredibly important that politicians now turn words into action.