Aiming to be Environmental Leaders, but Struggling to go Forward: Sweden and Norway on Energy System Transformation

Abstract

To achieve the needed 95% reduction in greenhouse gas emissions, almost all energy consumed globally will have to stem from low-carbon sources, not least from renewable energy. Sweden and Norway have long sought to become world environmental leaders, institutionalizing policies on environmental and climate issues as well as taking ambitious positions in the global climate negotiations. They are comparably well placed to become carbon-neutral societies, with large renewable energy resources and substantial financial and institutional capacity to invest in reaching this target. Focusing on the production of new renewable energy in their energy system transformations from 1960 until the present, this paper investigates why the two countries have pursued such different paths, and what might be learned. The method used is the ‘most similar systems design’; data sources are public documents and 16 interviews with key persons in Sweden and Norway. The results show that politics and public policies have had profound impacts on which renewable energy sources have been developed, when and how. Sweden, lacking access to new cheap hydropower after 1970, has generally implemented more ambitious and comprehensive policies, leading to much higher production of new renewable energy than in Norway. Differences might thus be explained by differences in resource endowments, long-term research and innovation efforts, combined with creation of markets and predictable policies. Enhanced new renewables production has boosted energy security and stabilized the energy systems in both countries. The Swedish-Norwegian green certificate market has mainly contributed to expansion of already cost-competitive or nearly cost-competitive technologies: small-scale hydropower in Norway and biopower and wind power in Sweden.