Two attitudes to Energy in Sweden: the A and B plan

Having recently attended two conferences arranged by the Swedish Energy Ministry and read a good deal in the daily press I would like to summarize my general impressions of attitudes to the energy situation in Sweden. These are purely my own reflections, and not the expressed opinions of anyone in the Ministry or invited speakers.

Basically, there is an “A plan” and a “B plan”. Many are on the fence as to which is the best to follow, and as A represents “Business as usual” fence sitters are de facto on the “A plan” side.

The “A plan” goes roughly like this: whilst we accept that economic growth does not in itself bring life quality and living standards increases, it does offer the best conditions for improving living standards and life quality. Alternatives like the planned economies of the Communist era have proved a failure and a dead end as a tool for development. Energy intensity proportion of GDP is declining, so we take this as evidence that economic growth can continue even as energy prices hike. The Swedish economy is robust enough to cope with outsourcing to China and other threats by re-inventing its services and selling value-add back to, for example, the Chinese. Supplies of energy at least for the next 20 years will be plentiful, cheap and in surplus of demand.

The system we live under today, the capitalistic and debt-based economy, will work well even without increasing supplies of cheap energy. Swedes will not feel any pain from rising energy prices. Investment in alternatives will force through all necessary changes. Living standards will be maintained or slightly better in the next decades. Therefore the compelling argument is for the “A plan”: Business As Usual.

Under the “A plan” environmental goals of CO2 output will not be met but the A planners do not really accept there is evidence that energy intensity is destabilizing the global climate.

The “B plan” looks hard at the mathematics of energy supplies. The intensive users of energy today (Sweden included) are increasingly dependant on these huge amounts of energy for the way they live. This makes them vulnerable because 1) as they are not the energy suppliers a free market says the buyer can dictate price as scarcity arises and 2) suppliers are not always close allies. B planners point at how rises in energy prices always reduce economic growth and reducing economic growth always increases unemployment, poverty, etc. Those with less will feel inequalities harder but everyone will feel the pinch.

B planners point to Peak Oil, - discoveries of oil are dwindling as production is increasing. Sooner or later production will start to fall compared to demand. We need to get ourselves off fossil fuel energy intensity while we can. If we wait to long, we will not have the economic resources to invest in alternatives.

A framework plan for reducing energy intensity (renewables cannot be used at the level fossil fuels are) is therefore the “B plan”. And we should start now. The Prime Minister’s announced intention to be oil independent by 2020 is an example of a “B plan”.

Under the “B plan”, environmental goals of reducing CO2 output will be met naturally as the amount of fossil carbon needed to be burnt to cause more global warming is simply not available.

Sweden is in an interesting situation, where the Government is calling for a ”B plan” to be followed, but experts are saying the ”A plan” will not cause enough hurt for anyone to want to abandon it. Watch this space.