In spring 2020, the IVL Swedish Environmental Research Institute organised a series of workshop events on behalf of the national council of experts for climate adaptation (Nationella expertrådet för klimatanpassning). Experts from different areas came together to discuss the risks, opportunities and consequences with regard to the indirect effects of global climate change on Sweden. Below follows a summary of these discussions. The complete documentation is available in the right-hand column.
Trade
Non-existent redundancy for major crises in Sweden
Much of Sweden’s trade flows and trading structures are entirely dependent on production that takes place outside of Sweden and the full functioning of transportation to the country. To a great extent, there are no strategies in place for coping with unexpected events or disruption that could arise as a result of climate change. There are limited stockpiles of foodstuffs, as well as limited storage opportunities and preparedness for strategic goods, such as pharmaceuticals, medical equipment, drinking water chemicals and fuel. This is expected to have major consequences for Sweden, and they could become even worse if these vulnerabilities are not managed and prioritised.
Reduced global access to certain imported foodstuffs
As a result of extreme weather and gradual changes to farming conditions in other countries, there is a risk of reduced access to foodstuffs and other input products on the global market. This could lead to rising prices and a reduction in quality of imported foodstuffs, as well as other knock-on effects with regard to resource distribution, policy changes and political tension. There is a risk that this could happen with increased severity and increased frequency, resulting in shortages of certain foodstuffs, stockpiling and price rises, which will also have an impact on the politics of distribution. Changing farming conditions result in a need for adaptation, both to the direct effects in Sweden and to the indirect effects and events in the world around us.
Adverse effect on trade and industry as a result of gradual climate change and extreme weather events
The effects of global climate change represent a risk of the disruption of production and transportation on a worldwide basis, as a result of factories closing, and transportation routes disappearing (either entirely or partially) or becoming unusable. Sweden will experience greater vulnerability due to the reliance on just-in-time systems and long supply and value chains. In combination with non-existent or inadequate risk analysis and reporting in companies’ supply chains, this represents obvious vulnerabilities in relation to trade and industry.
Opportunities for increased level of self-sufficiency and exports of foodstuffs
A changed climate may present greater opportunities for the cultivation, storage and exporting of more and different types of crops in Sweden, as a result of extended growing seasons here and a deterioration in the production conditions in other regions. Potential obstacles that could prevent the exploitation of these opportunities include a shortage of both processing companies and skills in Sweden – for example, knowledge of water shortages is low when compared to that in other countries that have already spent a long time working to address this problem. It is also problematic that much of Sweden’s usable land has been built upon, for example for housing.
Finance
Weak resistance of financial stability to climate-related risks
In conjunction with climate change, new types of risks and uncertainties will need to be managed within the financial sector. It is not clear how this would be achieved, nor its potential consequences for financial stability. Many questions remain concerning the possible implications of unknown risks, as well as the consequences of adverse effects on the global financial system. One problem is a lack of quality in assessment processes with regard to both data and calculation models, and this must be improved if vulnerability is to be minimised. There are potential threats to financial stability if changes are made too late – or too quickly. Because the financial system is so interconnected, companies in the finance sector must incorporate climate-related risks into their risk management and business models.
Financial systems do not direct investments to climate-resilient activities because climate risks are not currently priced
The difficulties lie in the fact that there are often failings in the transparency of the reporting of and access to good quality data concerning physical risks. The risks are present in different parts of the companies, including with regard to supply chains, the companies’ production facilities, and the sales markets for the companies’ products. Unsuitable calculation models for physical risk also contribute to the inadequate pricing of risks. These difficulties are already present today, and the effect will be that decision-making and placements will not be directed towards more resilient activities.
Increased insurance costs in Sweden due to changes in the global re-insurance market as a result of extreme weather events worldwide
Increased costs for re-insurance, caused by the increased occurrence of extreme weather events on a global scale, may have implications for insurance in Sweden. More extreme weather events, together with gradual changes to the climate, are expected to affect the insurance industry in Sweden, even if no significant changes have yet been identified in the Swedish insurance market. Changes in the insurance market may also change the ways in which municipalities plan and build, as well where companies will place their activities.
Increased global competition for strategic goods (e.g. certain foodstuffs) may be problematic for Sweden
Sweden may experience problems in the event of greater worldwide competition for strategic goods, such as certain foodstuffs, as Sweden is a small country with relatively little global influence.
Geopolitics
Increased tensions in areas close to Sweden due to the melting of Arctic ice
As melting ice in the Arctic causes the Northwest Passage to open up, the future consequences for shipping will need to be monitored. This will not only involve the opening of new trade routes but may also result in changes to military presence and new questions concerning resources and their distribution. International and intergovernmental collaboration with regard to the Arctic region is also likely to change as a result of this.
Uncertainty concerning the importing of Russian oil from Siberia as a result of thawing permafrost
The thawing of Siberian permafrost may have an impact on Sweden’s ability to import Russian oil. Pipelines and other infrastructure have been designed for permafrost conditions, and these may be affected or damaged as the ground begins to thaw. The effects of this are largely dependent on how Russia manages this problem. Sweden may need to reconsider its dependence on Russian oil, and should already begin to prepare for the potential effects of this with regard to both geopolitical changes and access to resources.
Poorer conditions for the production of hydroelectric power in southern Europe, and better conditions in northern Europe, could benefit Sweden’s exporting of hydroelectricity
There may be an opportunity for increased exports of Swedish hydroelectricity, as climate change results in improved conditions for the production of hydroelectric power in Sweden. It may also be possible to increase production and exports of biofuels from Sweden, as climate change could result in the increased production of biomass. The opportunities for increased energy production in Sweden may contribute to a reduction in import-dependency.
Swedish opportunities for greater bilateral/international collaboration, knowledge transfer and increased aid
Sweden is a country with a relatively large amount of skills and technological development with regard to climate adaptation. This should be shared with other countries in order to minimise their vulnerability to climate change, which could also lead to reduced global unrest and migration, thereby indirectly reducing our own vulnerability. The fact that it is countries in the West that are predominantly responsible for causing climate change may also mean that, from a moral perspective, we should help to strengthen the capacity of other parts of the world. This is something that could take the form of aid, but also other types of collaboration.
People
Changes to migration patterns and climate zones will affect the spread of disease and infection
Climate change will affect people’s movements, both voluntary and involuntary, which increases the risk of the spreading of disease and infection. A changed climate will also create beneficial environments for infection-spreading insects, with an increased risk of the spreading of infectious matter (e.g. anthrax) from dead animals that have previously been frozen in regions of permafrost. Changes to migration patterns will generally increase the risk of zoonoses, pandemics and vector-borne diseases. In addition to the direct implications for health, this could also impact and alter countries’ economic conditions.
Increased migration due to a deterioration of living conditions in certain regions of the world
How Sweden will be affected will partly depend on the UN, EU and Sweden’s management of migration flows, as well as Sweden’s acceptance of new immigrants. However, Sweden already needs to make preparations in order to ensure adequate preparedness for when something happens. Increased migration could be an indirect consequence of climate change, but will often depend on a combination of different factors. There may be risks in both the long and the short term. The presumed area of greatest risk is linked to courses of events that unfold rapidly, such as we have seen in conjunction with the spreading of COVID-19. This could have several knock-on effects, which are difficult to predict but may have major consequences.
Uneven resource distribution and socio-economic differences in Sweden reinforced by indirect effects
The uneven distribution of income, and differences in access to healthcare, veterinary care and other societal services in Sweden may be strengthened by indirect effects caused by climate changes in other countries and highlight the conditions of fairness on a national basis. Groups in Sweden that are already vulnerable will suffer the most as a result of increases in the price of imported foodstuffs and of more widespread contagion and disease. Socio-economic differences within Sweden may also become more prominent in the event of increased climate-driven migration. In addition, many towns and villages in Sweden may experience greater exploitation as a result of increased tourism. Such places seldom have the same levels of societal services, which could affect both residents and tourists. It may also be that they don’t have the same local or regional resources to cope with the adverse effects caused by increased tourism.
Increases in tourism and labour-driven immigration generate increased revenues and greater skills
Increased tourism and the influx of foreign labour as a result of climate change could also create opportunities, such as in the form of international collaboration. However, opinion is divided as to whether increased tourism is to be regarded as more of a risk than an opportunity. This demonstrates the importance of analysing the implications of more people coming to Sweden (as tourists or for other reasons) and which types of effect this could have for different sectors.