Environmental Growth, Trade and Policy
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Environmental Growth, Trade and Policy
In the development of a state, the environment, economic growth, and policies positively and negatively influence each other (Bretschger & Mollet, 2015). In most cases, there is a scale to which trading will influence pollution. The governments involved form policies to manage or control the effects of economic growth on the environment. Most of the adopted policies are implemented from the uniform global price (Wiedmann & Lenzen, 2018). In Sweden, environmental policies focus on reducing emissions and the costs incurred in environmental regulations. The government Swedish government first focused on nature conservation. Then plans were formed to control and manage emissions from the industries. Over the years, as the industries evolved and adopted the use of fossil fuel, production git easier, and economic growth was rampant. However, the emissions increased, and the government was forced to introduce new policies that would be more effective (Bretschger & Mollet, 2015). This means that trade and growth eventually influence pollution but can be sustainable if there is a reliable regulatory framework to protect the environment.
In Sweden, the gross development product (GDP) reduced by about 0.3 percent in the first quarter of this year. A significant percentage of Sweden’s GDP comes from exports, with the least contributions coming from the gross fixed capital formation. However, the GDP grew by 0.2 percent in the last quarter of 2019, preceding a 0.4 growth in quarter three of the same year. Generally, the GDP of Sweden is highly used in household consumption, 46%, the government uses 26% while the gross fixed capital uses 23% of the total. While exports give close to 45% of the total GDP, imports give 41% (Lindmak, 2019). Between the years 2000 and 2012, Sweden introduced policies that helped manage greenhouse gas emissions. The emissions were reduced by 16%, and the GDP grew by 30 % over those years.
Following this change, the government focused on limiting emissions and resolving the next generation’s environmental problems. It focused on improving the air condition, reducing artificial acidification to zero, and no eutrophication (Lindmak, 2019). In 2010, the government formed an air ordinance that set the quality standards for outdoor air. This was followed by the air pollution control ordinance that was established in 2018, controlling the emissions reduction directives. Similarly, in the same year, a climate policy framework was adopted (Bretschger & Mollet, 2015). The framework had three sections, climate act, climate policy objectives, and the Swedish climate policy council. The strong environmental policies were at first a threat to the labor forces since most of the systems limited the productions that would cause harmful emissions into the environment. However, the use of other resources from the environment that do not breach the environmental protection policies made the creation of a sustainable trade possible (Sampaolesi, 2014). Cooperation from the industries and their employees made the goals and speculations of the company potential. Natural capital is the most significant aspect of economic growth and environmental management. The natural resources that are needed for economic growth like land, water, and trees. Natural capital plays a part in the carbonic and nitrogen cycle, which is a significant concern for environmental pollution and control.
Similarly, the recycling of these resources has reduced the disposal of wastes into the environment. The use of natural capital, which includes the different types of fossil fuel and greenhouse gas emissions, can be measured using a framework developed by the organization for economic cooperation and development (OECD) (Sampaolesi, 2014). The use of natural capital and control of greenhouse gas emissions has been termed environmentally-adjusted multifactor for productivity growth. This technique has been adopted in Sweden following the introduction of the environmental policies that reduced the permissible industrial emissions and banned the emission of artificial grasses.
In the analysis or measurement of the environmental policy stringency in any country will be limited by the lack of reliable measurements that can be used for comparison against other countries. However, some indexes were formed to measure the environmental policy stringency in OECD countries (Destek & Sinha, 2020). The chosen indexes relate to climate and air pollution. The proposed indexes are for the energy sector and the broader economy. The indexes have been used since the late years of the nineteenth century to the first decade of the twentieth century. The indexes used in the estimation of the environmental policy stringency are the first tangible measures dedicated to measuring the effect of the environmental policies used in OECD countries. The results from these indexes are similar to those obtained from surveys and other measurements of the environmental outcomes from the policy-based measures (Destek & Sinha, 2020). In Sweden, the policy stringency index ranges from 0.9 to 0.3 between 1990 and 2012, with the highest index being in 2009 with a 3.34 stringency index. This index focused on the air and climate, water, waste disposal, environmental and health risks, material resources, land resources, biodiversity, other natural capital resources, and the expenditures on the environment related to revenues.
The world trade organization focuses on the protection and preservation of the environment (Patterson, 2018). This organization aims at eliminating trade barriers and eliminating and mistreatment or discrimination between international traders’ relations. The import carbon emissions from fossil fuel may remain constant over time, allowing the scale and composition to vary over time. In the United Kingdom, including Sweden, domestic emissions have significantly reduced between 1990 and 2014(Patterson 2018). The total percentage for emissions was 27%, however out of this total drop emissions, 11% are from imported emissions. The imported emissions scale in Sweden ranges from 99.06 to 148.93. The highest being in 2009 and the lowest in 1997.
Range of carbon tax in Sweden from 1991 to 2019
The environmental sustainability indicators are contributed to by the success of trade and the development of the country’s economy. One of these indicators is poverty and economic growth, which is indicated by the country’s gross domestic product growth. Another used indicator is the environmental change and climate outcome measured by the cases of environmental-related health conditions, the level of education directly influenced by the country’s economic growth (Lindmak, 2019). Traditionally, the indicators used for environmental pollution were agriculture, forests, climate, and gas emissions only. However, with research and continuous studies, the impact of climate change on the economic status of a country, the development in trade, and the influence on the level of education have been linked to environmental change. The growth in trade has increased overtime at the expense of the environment (Wiedmann & Lenzen, 2018). However, the introduction of mitigation and management policies have helped in the control of pollution and emissions.
In line with the agreements to control environmental pollution, the Sweden government put measures to regulate greenhouse gas emissions and reducing the vulnerability of the effects of climate change. They formed policies to ensure that their country’s emissions only from natural fossil (Patterson, 2018). However, the measures are not very practical because the industries and processing plants in the organization do not rely entirely on fossil fuel. However, this goal was over-ambitious because more than a decade down the line, the emissions have only been reduced by 27%. In a projection of constant progress throughout the proceeding years, Sweden will only have achieved 50% of its goal (Pattersson, 2018). Generally, environmental policies to manage pollution are essential. Still, they greatly influence the country’s economic growth, especially if there are no alternative natural sources of energy that can be relied on for production.
References
Bretschger, L., & Mollet, J. (2015). Prices vs. Equity in International Climate Policy: A Broad Perspective. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2561326
Destek, M., & Sinha, A. (2020). Renewable, non-renewable energy consumption, economic growth, trade openness, and ecological footprint: Evidence from organisation for economic Cooperation and Development countries. Journal of Cleaner Production, 242, 118537. https://doi.org/10.1016/j.jclepro.2019.118537
Sampaolesi, A. (2014). Optimal Environmental Policy under Endogenous Terms of Trade and Economic Growth. Theoretical Economics Letters, 04(07), 608-611. https://doi.org/10.4236/tel.2014.47076
Harring, N., & Sohlberg, J. (2016). The varying effects of left-right ideology on support for the environment: Evidence from a Swedish survey experiment. Environmental Politics, 26(2), 278-300. https://doi.org/10.1080/09644016.2016.1244965
Lindmark, M. (2019). Rethinking the Environmental State: An Economic History of the Swedish Environmental Kuznets Curve for Carbon. In Search of Good Energy Policy, 139.
Pettersson, K. (2018). Sweden, a country with high economic growth and low emissions? A study about the relationship between economic growth and the CO2 emissions in the transport sector in Sweden.