Media advisory 21 October 2022
Today, Mistra Geopolitics and Stockholm Environment Institute launch a report that addresses an emerging and highly topical global challenge: climate risks via global trade. The report analyzes Sweden’s role in the global trade system and identifies climate risks facing Sweden as a result of its international trade relations.
The analysis in “New risk horizons: Sweden’s exposure to climate risk via international trade” shows that Sweden’s most stable trade relations tend to be with countries that are both close to Sweden and relatively resilient to climate change. However, by adopting innovative data-driven methods, it also reveals the true extent of the country’s dependence on more vulnerable countries – particularly emerging economies in Asia and Africa – that play an increasingly critical role in Swedish supply chains.
The report provides a number of recommendations to decision-makers ahead of the revision of Sweden’s national strategy for climate adaptation, COP27 climate negotiations and Sweden’s EU Presidency in 2023.
“With new and more detailed research results, we see how vulnerable Sweden is, as a small, open country in the global market, to the effects of climate change in countries far away,” said Frida Lager, SEI Research Associate and Mistra Geopolitics project leader. “Climate change threatens to disrupt global production and distribution chains, and thereby negatively impact Swedish consumption, posing risks to food supply and business continuity. The country’s resilience depends on international cooperation and a strong, global climate adaptation agenda to reduce these risks.”
Sweden’s climate risk exposure
The report shows that traditional methods for assessing Sweden’s climate risk exposure present a relatively reassuring picture and highlights the dominant role played by geographically close trading partners such as Germany and the Nordic countries – some of the least vulnerable countries in the world. In addition, Sweden trades largely with EU countries and other relatively resilient markets.
“Trading partners earlier in the supply chain, such as producers of agricultural commodities, manufacturing inputs and critical minerals, are more difficult to track in the statistics, but they play a crucial role in the Swedish economy,” Lager noted. “The risks of climate change disruptions via trade are greatest in these economies and their influence on Sweden’s climate vulnerability has not been visible until now.”
Global trade and climate vulnerability
The effects of the pandemic and ongoing, interlinked food and energy crises have – and continue to – open the eyes of Swedish society. They serve to remind us of our deep interconnections with and dependence on faraway parts of the global economy. They also revitalize questions about the level of preparedness in Sweden to external shocks and remind stakeholders across business, government and society of how international events and trade shocks can disrupt life in Sweden.
“We are already seeing how the effects of climate change are leading to heat waves, droughts and forest fires, both in Europe and globally. Climate risks interact and are reinforced by other geopolitical risks with broad effects at the societal level. Despite this, climate adaptation is almost exclusively, even in Sweden, treated as something that takes place within the country’s borders,” Frida Lager said.
The report highlights what climate adaptation should really be about for countries like Sweden, where trade issues, business and international cooperation should be the key components. As similar research results from Germany and Austria show, the impact on trade of climate change in Sweden may be greater than the risks we face within the country’s own borders.
Climate risks linked to global trade are a relatively unexplored area of research and countries’ climate vulnerability is challenging to map. The report is a significant advance in terms of innovation in methods for evaluating transnational climate risks. It provides new insights of importance for climate adaptation policy and global governance.
Sweden’s dependence on soy from Brazil is highlighted as an example of a commodity where climate risks in production (on Brazilian farms) and transport (via Brazilian inland road, rail and shipping networks, and beyond) are expected to drive risks for consumers and businesses in Sweden. The flow of risk from farm to fork is mapped and analyzed in the report.
Revision of Sweden’s national adaptation strategy
Ahead of the annual global climate conference in Egypt – COP27 – and the revision of Sweden’s national strategy for climate adaptation, as well as Sweden’s upcoming presidency of the EU, the authors make the following recommendations to Swedish decision-makers:
- Prioritize cross-border climate risks as a risk area in the new climate adaptation strategy.
- Establish a new working group that spans several sectors to improve and clarify the management of cross-border climate risks, especially those related to trade. It should include decision-making bodies for trade and foreign policy as well as civil contingency planning.
- Establish a position with responsibility for coordinating adaptation efforts across government and by other actors in Sweden to cross-border climate risks.
- Sweden should press for ambitious operationalization of the Global Goal on Adaptation (part of the Paris Agreement) as part of the Glasgow-Sharm El-Sheikh work programme, which will be discussed at COP27 in Egypt. Sweden is in a unique position to lead international coalitions and raise the level of understanding and management of cross-border climate risks.
Sweden’s climate adaptation strategy
Based on the report’s results, the authors have supported the work of the National Expert Council for Climate Adaptation in developing data for next year’s revision of Sweden’s climate adaptation strategy, which should be in place by 2023. The Council’s recommendations to the Government include prioritizing cross-border climate change risks and adaptation for Sweden, with a particular focus on food security, business and energy supply.
Mistra Geopolitics’ team and further information
Frida Lager is a Research Associate at SEI Headquarters. Within Mistra Geopolitics, Frida is engaged in research on transboundary climate risk for Sweden via trade. Within SEI’s climate, energy and society unit she focuses on transboundary effects of climate change and climate change adaptation.
Magnus Benzie, Research Fellow at Stockholm Environment Institute (SEI), is focusing on climate change adaptation. His research includes 15 years of professional experience in climate change research with a focus on climate impacts, vulnerability, risk and adapatation. Magnus is active in decarbonization, and previously within the work package ‘Impact pathways in a changing environmental and geopolitical context’.
Ylva Rylander is a Communications Officer at SEI. As a core member of SEI’s communications team and previous Press Officer of SEI, Ylva writes and edits press releases, develops communication plans and creates news stories. With 15 years of experience in public relations, awareness raising and external communication, she also provides strategic advice to SEI and Mistra Geopolitics researchers to help them maximize the impact of their research.
Telephone:+4673 150 33 84
Frida Lager, SEI Research Associate and Mistra Geopolitics project leader. Magnus Benzie, SEI Research Fellow and researcher within Mistra Geopolitics. Media advisory written by Ylva Rylander, Mistra Geopolitics Communications Officer at SEI, Frida Lager, Magnus Benzie and Ulrika Lambert, Senior Press Officer at SEI.