Researchers: Active policies needed for the green transition
With Northvolt's crisis, commentators have questioned the Swedish state's involvement in the green transition. Their comments share the common theme that they do not propose any alternative to the necessary transition. Researchers within Mistra Carbon draw other conclusions.
Their opinion article was published in the Swedish financial newspaper Dagens Industri on 23 October 2024. You can read the article (Swedish only) here: https://www.di.se/debatt/forskare-aktiv-politik-kravs-for-gron-omstallning/
Based on a new study, the researchers from IVL Swedish Environmental Research Institute, Luleå University of Technology, and the Chalmers University of Technology draw seven conclusions about what is needed for the transition to succeed.
The failure of investments in new technologies is not unique. Innovation is associated with risk-taking. However, not having the courage to invest in green technologies will likely involve an even greater risk. The development of green technologies is a necessity for the climate and a growth opportunity for industry.
From their analysis the research group draws the following conclusions:
The EU ETS must not be loosened. Emissions trading has been strengthened through the Fit for 55 climate package and will create good incentives for the transition in the long term. However, there is a risk that emissions trading will be loosened in future reviews. Sweden has much to gain from a continued clear and ambitious climate policy. The Swedish government should, therefore, actively push for the Fit for 55 package to be retained.
Additional investment support and risk mitigation are needed. Companies developing new technologies face a number of investment risks (technical, market, political) that traditional financiers find difficult to manage. This justifies the government's involvement in providing financial support and risk mitigation at the beginning of the transition.
Necessary infrastructure must be secured. The government has an important coordinating role to ensure that supporting functions, such as electricity transmission capacity and transport infrastructure, are in place on time.
Attractive communities must be created. The investments in green steel in northern Sweden require an extensive supply of skills and inward migration. It is reasonable for the municipalities to receive help from the state to meet this increased need for housing and public services that extensive industrial investments entail.
Local value sharing in connection with the establishment of new wind power. Until the mid-2030s, mainly wind power can provide the increased electricity production required by industrial investments. The proposal that an amount corresponding to wind power's property tax should be transferred to the municipalities is suitable for increasing acceptance. However, it is essential that this support is long-term and predictable and corresponds to the property tax generated from wind power within the municipality.
More efficient authorisation processes are needed. The stakeholders identify inefficient authorisation processes as one of the main obstacles to the green transition. The government must live up to its promises of shorter processing times and more predictable processes.
Creating a shared vision. The green transition represents a major societal change. It depends on the actors involved—industry, government agencies, municipalities, and regions—having a common vision with a consensus on direction and pace. This is why current and future governments must take responsibility for ensuring that climate objectives are integrated into all policy areas and reflected in the governance of government agencies.
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The opinion piece was published in Dagens Industri (Swedish only): Aktiv politik krävs för grön omställning. The authors are Lars Zetterberg, IVL Swedish Environmental Research Institute, programme manager for Mistra Carbon Exit, Filip Johnsson, Chalmers University of Technology, vice programme manager Mistra Carbon Exit and programme manager Mistra Electrification, Johan Rootzén, IVL Swedish Environmental Research Institute, Anna Krook Riekkola, Luleå University of Technology, Patrik Söderholm, Luleå University of Technology and Kersti Karltorp, IVL Swedish Environmental Research Institute. A Mistra Carbon Exit webinar was held in October, showing the results of two reports on this subject.
The report from researchers within Mistra Carbon Exit is fund here: Report: Framväxten av nya fossilfria värdekedjor från malm till fordon – styrmedel som möjliggör omställningen (IVL, Luleå University och Technology and Chalmers). Swedish only.
The Swedish Technology and Growth Analysis concluded the other (Swedish only): Stålindustrins val av teknikspår - statens roll.