After years of criticism of the reduction obligation, the Swedish right-wing parties do a complete turnaround and raise it.
The big losers in this maneuver are the Sweden Democrats, who have been the strictest critics of the reduction obligation.
As a plaster on the wounds, they get further reduced fuel taxes, but the question is whether it is enough to convince voters who have seen SD conduct something of a culture war against the mixing of biofuels in petrol and diesel.
The news that the government is raising the reduction obligation looks set to be the budget’s biggest shock. After it was leaked in advance, the government was forced to manage the crisis and call a lightning press conference that gave so little information that the day was filled with various background briefings from various departments in the government.
What is clear afterwards is that there have been tough negotiations between the governing parties. The Liberals can possibly see themselves as winners, but would probably have liked to see an even higher reduction obligation – and probably also missed seeing that the government is now spending a total of 17 billion on keeping petrol prices down during this term. That investment is expected to significantly increase driving and thus carbon dioxide emissions from the transport sector.
Has lashed himself to election promises
The settlement itself puts the government’s biggest dilemma in the spotlight. Three parties have clung to election promises of sharply reduced fuel prices. At the same time, the government must work to reduce carbon dioxide emissions from car traffic – in order to reach Sweden’s climate commitments towards the EU by 2030.
The Liberals, who hold the climate minister post, have not made any election promises on lower petrol prices but have had a tough time in negotiations on this issue. The fact that they are now getting through a higher reduction obligation is probably a welcome breather for the hard-tested climate minister, but this is thus compensated with further reduced fuel taxes. In practice, this means that the government allows the treasury to pay for emission reductions from traffic.
Will it be enough?
The content of this policy reversal is that the government is seen as capricious and the policy becomes unclear. The government has to pick at it, even if the political negotiators in background talks state that the outcome has been for the good of everyone: the climate policy is tightened without car-dependent households suffering.
The only question is what do they do if this is not enough? Because climate policy continues to be one of this government’s toughest issues and there remain unanswered questions about how Sweden will achieve its goals. With or without reduction obligation.