Understanding GHG emissions from Swedish consumption - Current challenges in reaching the generational goal

Highlights

• Only 35% of Sweden's CB GHG emissions occur in Sweden.

• Large emission reductions from domestic heating and road transport.

• From 1995 to 2014 GHG emissions from Swedish consumption increased by 18Mt abroad.

• Large GHG emission increase in China due to Swedish consumption of clothing.

• Non-compliance with the generational goal, due to increasing foreign emissions.

Abstract

The Swedish generational goal is a unique initiative governing all Swedish environmental policy, aiming at solving all major domestic environmental problems for the next generation without increasing environmental damage abroad. Without a good understanding of greenhouse gas (GHG) emissions from Swedish consumption, the formulation of efficient and well targeted policy initiatives to reach the generational goal is difficult. We have analysed the impacts of Swedish consumption in detail, investigating the impacts of different final consumers and different consumption clusters as well as the geographical location of where GHGs are emitted to satisfy Swedish demand. We use environmentally extended multi-regional input-output (EEMRIO) analysis and the database EXIOBASE3 to compute Swedish consumption-based (CB) GHG emissions over a time period of 20 years. Our study shows that total CB GHG emissions fluctuated but remained rather stable over the years. However, the origin of the emissions changed from within Sweden to outside Sweden's borders. CB emissions within Sweden have decreased substantially through a reduction of direct emissions associated with domestic heating and mobility, whereas GHG emissions outside Sweden have increased, especially in China and in the rest of Asia. We show that manufactured products are responsible for a large share of this development, displaying a strong trend toward future increases. This calls for policy measures targeting consumption, especially of manufactured products such as textiles, clothing and furniture that cause large impacts in other countries.

Introduction

“The overall goal of Swedish environmental policy is to hand over to the next generation a society in which the major environmental problems in Sweden have been solved, without increasing environmental and health problems outside Sweden's borders.” Generational goal (Riksdagen, 2010)

Many high income countries have managed to substantially increase the efficiency of industrial production at home and, with that, decrease domestic environmental impacts (Barbu et al., 2014; Weidner and Mez, 2008). Much too often this has occurred by outsourcing environmentally damaging and/or emission heavy production lines to low-wage countries with less strict environmental policy or by satisfying growing demand for consumer goods through imports from other countries (Wood et al., 2018). Like many other OECD countries, Sweden has successfully reduced greenhouse gas (GHG) emissions from domestic production (SCB, 2018). However, production emissions within Sweden are not the only impacts Sweden is responsible for. When taking a consumption perspective, the whole value chain of products and services consumed in Sweden needs to be measured, including impacts that happen during the production phase outside Sweden. Several studies have been conducted that focus on understanding how socio-economic factors influence energy use and emissions abroad from domestic households (Jones and Kammen, 2014; Lenzen et al., 2006; Ornetzeder et al., 2008). With its generational goal, Sweden is on the forefront in acknowledging this need to address the issue of displaced emission resulting from a country's consumption.

The question that arises is how well Sweden's climate policy measures align to this generational goal. Recent Swedish climate policy focus can be classified into three main areas (Isenhour and Feng, 2016):

• policies that target emission intensity improvements in Swedish production

• technology transfer programmes to countries that Sweden imports a lot from

• improvement of easily understandable/accessible information about products environmental performance, in order to facilitate voluntary consumer choice

Emission intensity improvements have been part of Sweden's policy packages for a long time. In 1991, a green tax reform was initiated that explicitly targeted fossil fuels as a tax base (Sterner, 1995). Some of the taxes are on energy and others on emissions, making it more expensive to use fossil fuels and making biofuels more attractive. Subsidies or investment schemes urging households to change from fossil fuels to other energy systems are also part of these policies. The energy mix that was created in the wake of the oil crisis meant that hydropower and nuclear power are dominating the electricity generation in Sweden. For heating in urban areas, large scale solutions are common, and biofuels have surpassed oil as main fuel used. In the mobility sector, there are policies in place aiming to increase the use of biofuels and establish distribution systems for such fuels. Schemes for lowering the price of environmentally friendly cars have also been used. New proposals have been developed in order to reach a newly adopted target of reducing CO₂ emissions from transport in Sweden by 70 percent 2005–2030. (Nilsson, 2017). Furthermore, initiatives to get industry on board with voluntary energy efficient management are part of the work of the Energy Agency (2009).

Sweden has technology transfer programmes with several countries, its main target being China (Isenhour and Feng, 2016). The Centre for Environmental Technology (CENTEC) has been established with the specific goal to “contribute to the decrease of carbon dioxide emissions in China” (Froberg et al., 2013), in order to reduce Swedish consumption impacts in China.

On the consumer side, the biggest NGO in the country has established a system for the marking of green electricity so that consumers can purchase certified electricity, ensuring that the payment is allocated to renewable energy sources. Likewise, energy-marking schemes for energy-efficient electronic products (such as fridges and washing machines) aim to help consumers in reducing the use of electricity by households, and municipalities also provide information about how to best insulate houses as well as tips on how to save energy in the household (see e.g. Energy Agency (2009)). Furthermore, regulations require that all houses put for sale are accompanied with an energy declaration.

These initiatives show the pronounced interest by the government to tackle Swedish emissions. However to evaluate the effectiveness of the policies, especially regarding areas of major mitigation potential from a consumption viewpoint, it requires detailed knowledge and understanding of the supply chain impacts of consumer goods. Insights into who consumes what are crucial to develop future efficient and well target policies.

A comprehensive method for the evaluation of the global environmental impact of consumption is environmentally-extended multi-regional input-output (EE-MRIO) analysis (Energimyndigheten, 2016). As a top-down approach it is suited to assess impacts caused by a country's total consumption (Hertwich and Peters, 2009) in a given year. In contrast to product-specific environmental footprints calculated by life-cycle analyses, it is a macro-economic approach, which due to the global coverage, gets around the problem of truncation errors (Lenzen and Dey, 2000) and captures regionally specific technology in international supply chains. Using EE-MRIO framework, we can compute GHG footprints showing all the impacts of Swedish consumption, no matter where they occur.

The generational goal refers to environmental problems at a much larger scope than only climate impacts. Many more environmental pressures are related to consumption than only GHG emissions and tackling GHG emissions can result in problem shifting by creating other environmental problems, such as biodiversity loss or water scarcity. Hence, to avoid this, it is of utmost importance to assess the overall environmental impact before formulating policies.

In this study we focus on GHG emissions only, investigating how Sweden's consumption is driving those in Sweden and abroad, analysing the international sources of Sweden's CB emissions and the change over time. To better understand where policies targeting CB emissions have the highest impact, we investigate in detail which particular consumption clusters are causing large GHG emissions and where and which final consumer (households, governments, etc.) are mainly responsible for buying them. With the results of our study we discuss how well recent and planned Swedish environmental policy measures address the challenge of reducing GHG emissions not only in Sweden but also outside of Sweden for Swedish consumption.

Our study is structured as follows: In the following section, we provide an overview of the model and data used as well as the methods for calculating CB footprints, detailed on source country and consumption cluster, and the structural decomposition analysis (SDA). In the result section, we present Sweden's GHG CB footprints, their development over time and space, analysing in detail how different consumption clusters' impacts differ. In section 4, we discuss our findings within the context of Swedish recent and future environmental policy. In the last section we conclude with a remark on challenges and opportunities for Sweden to reach its generational goal.