Sweden uses a variety of economic instruments to influence energy use. Its environmental taxes include a carbon tax, enacted in 1991 on the use of fossil fuels and currently at $150/tonne CO2 emitted, plus sulphur and energy taxes. Industry, forestry, agriculture, aquaculture, and heat production are exempt from the energy tax and operators can pay up to five times below consumer rates.

In spite of an intense regulatory environment, Sweden is headquarters to numerous multinationals, including retailers IKEA and Hennes & Mauritz (H&M), packaging company TetraPak, and telecommunications firm Ericsson. A composite of international competitiveness ratings (including those of the World Bank and World Economic Forum) put Sweden first and Canada ninth. The International Centre for Trade and Sustainable Development found in 2007 that competitiveness does not suffer when exporting countries impose a carbon tax, suggesting that subsidies and exemptions for energy-intensive industries may compensate for the negative effects.

It’s clear that a country can balance strong environmental regulation with economic success. So why has Sweden triumphed while we’ve fallen short?

The secrets of success
Much like Canada, Sweden began as a “country of farmers,” says Westermark. “There is a strong feeling for the environment.” The country enshrined allemansrätten, or ‘every man’s right’ to have access to nature, in its Constitution in 1940. Meanwhile, Environment Canada wasn’t established until 1971.

When acid rain and the pesticide effects mentioned in Rachel Carson’s book Silent Spring impacted Sweden in the 1960s, that tradition galvanized the population around environmental activism.

“Sweden was hit hard earlier than most countries,” explains Dr. Karl-Henrik Robèrt, a Swedish scientist and founder of The Natural Step (TNS), an international non-profit organization which seeks to create a sustainable society. “People really reacted, and it moved up on the political agenda relatively quickly.” The oil crises of the 1970s also affected Sweden, and spurred investments in energy efficiency.

The first United Nations Conference on the Human Environment occurred in Stockholm in 1972.

“The Conference has kind of followed us,” says Magnus Schönning when I reach him in late January at his job at the County Administrative Board in Skane, Sweden. A Swedish ex-diplomat, Schönning was posted in Canada for six years. “My generation was thoroughly schooled in the need to keep Sweden clean.” An awareness campaign called “Keep Sweden Tidy” began in 1963, and its effects are felt to this day.

“The worst thing you could call someone when we were eight years old was ‘environmental crook,’” Schönning laughs. “I think a lot of that is still rubbing off on my—and my children’s—generation.”

Swedish politics have reflected this understanding. “The goal to create a truly sustainable society was more or less universally accepted,” says Schönning. “It stopped being a partisan issue.” This was aided in part by Sweden’s party-list proportional representation system, which many commentators view as a better political vehicle for reflecting a population’s concerns. In 1999, all seven political parties of the Riksdag adopted 15 environmental quality objectives to be met by 2020.

This environmental consciousness has also permeated the Swedish corporate context, where businesses use a broader time horizon than their North American counterparts. “It has always been a long-term mindset in Sweden,” says Åsa Bjering, project manager for the Swedish Institute Management Program.

Ingrid Schullström, head of Corporate Social Responsibility at H&M, agrees. “We’re not looking at only the next year, we’re thinking about how we’re going to be successful for many years,” she says. “So we tend to think in a more sustainable way.”