Flag of Sweden. Source: Public Domain Media
Economist Sofia Lundberg warns that municipalities and regions may bear too many risks during the green transition in the north—such as Skellefteå in the Northvolt case.
The green transition in northern Sweden involves major municipal investments and risks, according to new research. Now the state and the EU must step forward, economist Sofia Lundberg believes.
“Municipalities are leading the way with billions in investments, but without guarantees,” she says.
In her new report, the professor of economics at Umeå University points out that the risks in the green transition should be distributed according to the role and capacity of the actors. The actor that can benefit the most from an industrial investment should bear the greatest risk and cost. Commercial risks should be taken by the companies and systemic risks by the state or the EU.
“The whole of society benefits from reduced climate emissions, but it is important that those who can benefit the most financially from an investment also bear the greatest risks. The climate issue cannot be solved locally,” says Sofia Lundberg.
Criticism From Skellefteå
The report is partly based on in-depth interviews with municipal representatives, including from Skellefteå, where Northvolt’s rise and fall left deep traces. Boden is also included, where the steel company Stegra wants to produce a groundbreaking product that can significantly reduce carbon dioxide emissions.
Skellefteå’s municipal councillor Lorents Burman said this spring that he had hoped for clear support from the government when the major Northvolt announcement came. But that this was not the case.
“We have had dialogue, but the constructiveness has not been there,” he says.
Clear National Responsibility
To make it easier for the municipalities involved, Sofia Lundberg wants the government to take on a coordinating role between different state actors, for coordinating skills, experiences and decision-making processes. But there also needs to be a clear national responsibility for infrastructure investments, for example in road and rail networks, Lundberg believes.
The Tax System Is Not Built For This
When it comes to small municipalities that take on large financial risks in green establishments, she believes that our tax system is not built for local responsibility.
According to her, the municipalities want some form of guarantee when they take on larger risks in the form of, for example, housing construction.
“If the establishment does not take place, the municipality will be left with excess capacity.”
SVT has been in contact with Ebba Busch, Minister of Energy and Enterprise. She does not want to comment as she has not read the report.
Source: SVT (in Swedish)