Zweeds voorzitterschap wil voortouw nemen in Europese strijd tegen klimaatverandering (en)

Speech by Prime Minister Fredrik Reinfeldt, 9 september 2009 in Brussels. Check against delivery.

Your Royal Highnesses, Excellencies, Ladies and Gentlemen,

It is a great pleasure to have this opportunity to exchange views with such a distinguished audience. You, as European policy-makers, business leaders and representatives of civil society, have a crucial role to play in meeting the challenges that we are facing.

The Swedish Presidency of the EU is taking place under very special circumstances. New Members of the European Parliament have just taken office; a new European Commission is about to be appointed; the worst financial and economic crisis since the 1930s has turned into an employment crisis, and we receive  more alarming reports about the climate than ever before.

It’s not a coincidence that the slogan of the Swedish Presidency is “Taking on the Challenge”.

But as you can understand, we can’t take on the challenge alone. We must act together, to deal with the economic crisis and unemployment, and to unite the world to tackle climate change.

The top priorities for our Presidency are handling the economic and employment crisis, and getting a new international climate agreement in place in Copenhagen.

This is a big responsibility, but experience shows that it is possible.

For example. In the last eighteen years, Sweden's CO2 emissions have decreased by ten per cent at the same time as our economy has grown by nearly fifty per cent!

And the whole EU area shows that it is possible to combine continued growth with an ambitious climate policy. The EU pledge of a 30 per cent reduction by 2020 as part of a global agreement is more than anyone else has put on the table so far. Add to this our suggested support towards reduced global deforestation and the EU is clearly wearing the yellow jersey in this race.

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In the debate  sustainable development is often said to be in contradiction with market economy, when in reality these two notions are closely interlinked. Without market economy, development is not possible – and without sustainable development market economy will not prevail.

I believe we can turn crisis into opportunity: if we look into how business can benefit from transition to a more energy-efficient and low-carbon economy.

It’s high time to focus on the opportunity for change that this crisis is bringing.

Let me share some of my ideas with you.

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The international climate negotiations are at a critical juncture.

To effectively limit global temperature increase to no more than 2 degrees Celsius above pre-industrial levels – the target set by the UN – developed countries need to reduce their emissions by 25 to 40 per cent by 2020. And developing countries need to reduce their emissions by 15 to 30 per cent below business-as-usual by 2020. No question, this is a big challenge: but it is not impossible.

The meetings of the leaders of G8 and Major Economies Forum in Italy this summer showed some progress. There was agreement on the 2 degree target, which was significant.

Though on this note, I must say that even the scenario of a temperature increase of 2 degrees is not a very comforting one. We would still be facing serious consequences; changing weather and the extinction of many species of plants and animals.

In drawing the rest of the world to the 2 degree target path, we need to use all kinds of actions – including improved methods of energy efficiency and new low-carbon technology. This creates rich opportunities for businesses to contribute to a sustainable climate – and to economic growth. There are large opportunities in the green sector, believe me.

The European Commission published a study in June showing that the European 20 per cent renewables target can give jobs to 2.8 million people and generate a total value added of around 1,2 per cent of GDP.

Let us not fool ourselves. These jobs do not fall down from the sky. They require more financial support in the short term through investments in innovative technologies – for example offshore wind, solar thermal electricity and second-generation biofuels. But these technologies are the key to reaching the EU’s 2020 target, which in turn will help maintain the EU’s current competitive position in the global market and increase employment and GDP in the mid term.

There are already numerous examples of businesses that are prospering and making major gains thanks to long-sighted climate politics. Examples include Isover, the French insulation business that warms and protects more than 1 in 3 homes in Europe and 1 in 5 in America. Vestas, the Danish wind-farm company that installs one new wind-turbine every three hours. Germany and Spain have prominent firms in the solar business. Many more could be mentioned.

The conclusion is. Inaction is not an option. The costs resulting from global warming increases for every day of inaction. But if we act now, we can not only limit these costs we can also create new jobs and business opportunities. In the long run our green policies will pay off also financially.

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I see green technologies as a step in the industrial revolution. In our own development. It started with automated flour mills and steam engines. It continued on to cars and airplanes. Technological wonders at that time in history.

But when land, sea and air no longer constitute barriers for mankind we meet new challenges. The positive aspect of this is: We can do it by developing even more.

There will be both winners and losers among companies. It’s up to the companies to choose side. And the companies that have taken their seats on the green train are better equipped to face the future than those who are left on the platform.

And so, prospects and values will change. And financial markets and businesses will have to learn to assess the economic impact of climate change.

And there is increasing awareness of this among consumers and small investors. Increasing responsibility among households to buy products that are environmentally friendly. Increasing interest in ethical funds for those who want to see their savings grow, and who also want to take some responsibility for the future.

So far, Europe is ahead, but rest assured: others will try to catch up. Competitors in other parts of the world are discovering the opportunities: the US and China are rapidly becoming large markets for wind power. Japanese and American car manufacturers investing heavily in electric and hybrid vehicles. So Europe needs to keep up and intensify its efforts.

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So which are the carbon-efficient technologies of the future? Or to put it in another way, what is the role of politicians in promoting a low-carbon future? Well, we may have some ideas about what these technologies might be, but we do not have a crystal ball. And we can be sure of the ability of the human mind to come up with unexpected solutions to existing problems.

To fully capture this, policy instruments need to be technology-neutral. That is, politicians should take care to avoid trying to pick the winner at an early stage. Instead, our policies should provide the incentives for a broad range of innovation and investment that foster an economy with lower emissions of greenhouse gases.

This only works if we have functioning markets. For this to happen, it is absolutely necessary to put a price on emissions. The more countries that apply economic instruments such as national CO2 taxes and emissions trading the stronger the signal to the market.

This is also a powerful engine for technological development. It’s still a problem that it’s cheaper to use high-emission technologies than more carbon-effective ones. If we put a price on carbon, this will change. As we speak, efforts are being made to ensure that this will happen. And when it does, new markets and new opportunities will open up.

I want to emphasize one thing: these are the kind of policies that maintain the liberty of individuals and firms to make choices. I am firmly against those who say that the threat of climate change means that we must restrict choice, reduce our economic welfare or even close our borders. That is not the way forward.

The principle of an ‘open market economy with free competition’ is not only compatible with, but necessary for, an effective climate policy that safeguards the freedom to make choices.

So let us all focus on the possibilities and opportunities that are created. Let us learn how we can take advantage of them, to generate new jobs, businesses and economic growth.

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But still a lot remains to be done in the UN negotiations. I believe that we need an injection of political will. Tonight I’m leaving for an EU summit in South Africa, where we obviously will discuss these matters. And ahead of us we have important meetings between world leaders in the United Nations General Assembly in New York and in the G20 in Pittsburgh.

Those meetings are opportunities to speed up work and promote a successful outcome in Copenhagen. But the task is large and it’s time to step up our efforts.

One of the founding fathers of the European Union, Jean Monnet, worked to build strong European institutions and use the instrument of law to ensure cooperation - the strength of which went far beyond political pledges. In developing its climate policy the EU has been able to draw on its strong institutions, its shared political values and its economic integration.

I think the EU:s achievements  in climate policy over the last decades are impressive. The Swedish Presidency of the EU will work hard to preserve our unity throughout the climate negotiations. We will continue to push for EU leadership, to convince our international partners of the necessity of reaching an ambitious international climate agreement in Copenhagen.

Thank you for your attention!