Will emission rights be a way forward for the climate?

Climate experts Lars Zetterberg and Jessica Henryson want to see a climate policy where Sweden can act as a pioneer for the other European countries in terms of emissions trading. Following the National Institute of Economic Research's report, the Swedish government was critical.

Swedish domestic policy is dominating the debate and leadership sides right now. Unsurprising given the tumultuous government formation. In light of this, Lars Zetterberg, climate expert at IVL Swedish Environmental Institute, and Jessica Henryson, business area manager at Westander Climate and Energy, call on the next government to form a more ambitious and holistic Swedish climate policy that can, at best, guide EU climate policy. work.

The debate is based on the EU reform EU ETS, regarding emission rights. It is a kind of economic instrument corresponding to "rations" of emissions for companies in different sectors. The reform means that the number of emission rights will decrease as European companies become more environmentally friendly. The more sectors that are included in each country's rationing distribution, the greater the environmental benefit.

Zetterberg and Henryson therefore believe that Sweden should include the trade sector in its climate policy, as this sector will reduce its climate emissions and thus contribute to the environmental benefits when emission rights are reduced. This, they say, can in the long run contribute to reducing both Sweden's and the European countries' climate emissions, in line with the Paris Agreement.

However, the previous Swedish government was critical. When the EU reform was implemented, the government commissioned the National Institute of Economic Research (KI) to investigate the issue of including the trade sector in the system. KI then stated that there were certain effects that motivated more climate policy measures - but that in the long run they do not see this imbalance of allocation and emissions in the system. Sweden will therefore not be affected by the new regulations in the EU, nor will it need to extend the domestic emissions regulation to the trade sector. In a reply to Zetterberg and Henryson's debate posts, the National Institute of Economic Research responds to the criticism (see the links to both debate posts below).