A common debate against sustainable development is that climate action will stunt the economy.

Sweden is proving this argument wrong, showing how sustainability and economic growth are not mutually exclusive and can grow in tandem.

To achieve "net zero" by 2045, countries need to cut their emissions by 85%, compared to 1990. Sweden has achieved an 80% reduction since 1990, securing its place as the second most sustainable country in the world after Finland.

And yet, Sweden’s economy has been growing steadily since 1970 and ranked sixth in the IMD World Competitiveness Ranking Report. 

So how did Sweden achieve such leaps and bounds in sustainable development?

The country recognized the importance of reducing fossil fuels early on and the need to balance social, economic, and political aspects of sustainability in its climate actions. Most importantly, sustainability is a priority for the country in every aspect from energy to housing, with strong engagement and partnership between its government, businesses, people, and various stakeholders. 

Policy

Sweden has adopted an aggressive carbon tax as part of tax reform. A carbon tax is a fee on carbon to incentivize businesses to reduce their emissions and find renewable alternatives.

The tax rate has increased steadily since the 1990s and currently covers 40% of Sweden’s carbon emissions. Instead of facing backlash, the carbon tax was accepted by the Swedish public. Meanwhile, the nation maintained stable growth and may have even seen economic improvement as it had reduced other taxes to account for the new carbon tax. Sweden also established a Climate Policy Council that evaluates the compliance of government policies with their climate goals.  

Energy

Though Sweden is a heavily industrialized country with energy-intensive sectors such as steel and cement, it has managed to massively decarbonize its economy.

Naturally, Sweden has a great supply of wind and water, and forests that cover 70% of its land that sequester carbon dioxide. Sweden took advantage of these natural opportunities. It began cutting fossil fuels in the 1970s during a global oil crisis, choosing that time to build on nuclear energy, and further establish hydropower and wind energy.

In terms of electricity generation, their greenhouse gas emissions are almost at zero, with 70% of energy sourced from renewables!

Sweden also helped reduce emissions from heating and energy-intensive industries by investing in district heating systems powered by biofuel and waste incineration. District heating systems, though expensive, are more efficient since they distribute heat to multiple houses and industrial areas instead of requiring separate heating units in each building.

Sustainable Living

Swedish citizens have been engaged in making sustainable choices, such as buying eco-labeled products and sorting waste. Data shows 40% of Swedes purchased eco-labeled products in July, more than the European average, according to the European Commission. Also, 88% of all aluminum cans and PET bottles were recycled.

By focusing on a circular economy and improving consumer choices, Sweden is a prime example of why public education in sustainability is important.

Challenges & Future Plans

Unfortunately, Sweden has faced challenges during the Russia-Ukraine war and COVID-19 in maintaining sustainable consumption and production. Due to the war, the government cut petrol and diesel taxes and abolished incentives for electric vehicles. This led to about a 5 million tonne increase in carbon emissions annually. 

Despite these challenges, the government promised to keep these measures only short-term and hopes to make transportation and agriculture more efficient, as they are Sweden’s largest emitters. The country is also looking forward to addressing biodiversity loss and the social equality goals of the SDGs.  

As countries around the world struggle to meet climate goals, Sweden has shown that collaboration between governments, businesses, and the public is key to building a sustainable economy and addressing the challenges of climate change. 

Sources: DW, UNFCC, Sweden.se, naturvardsverket.se, IMD