Fredrik Reinfeldt, Prime Minister of Sweden

Baltic Development Forum Summit

Tallinn, 5 November 2007

Keynote Speech by Fredrik Reinfeldt

Prime Minister of Sweden

[Check against delivery]

Your Excellencies, Ladies and Gentlemen,

I would like to express my gratitude to the organisers for arranging this important Baltic Development Forum. My Government is a strong believer in Baltic Sea cooperation. The reason for this is very simple – the Baltic Sea Region has already become one of Europe’s fastest growing regions and has the capacity – with the right policies – to create even more jobs, higher standards of living and better education and infrastructure for its inhabitants. This is something we need to work on together. 

But there are also other reasons – of growing magnitude and importance – for us to intensify our cooperation, that is the protection of the environment and climate change. We share for example a beautiful coastline and common sea that is of immense importance as a source of recreation for millions of people.  It is also of great importance as a means of transportation. This is a resource that we simply cannot continue to allow to deteriorate. 

The topics of this session – climate change and energy – are key themes for a flourishing Baltic Sea region. They represent substantial challenges for the future, of course. But handled in the right way they can indeed be turned into important opportunities. 

Let us start by looking at possible future scenarios in the field of energy.

The International Energy Agency has provided a baseline vision of how energy markets would be likely to evolve if current trends were to prevail. In such a scenario, global primary energy demand would increase by 53 per cent between now and 2030. Over 70 per cent of this increase comes from developing countries, led by China and India. Global carbon dioxide emissions would reach a 55 per cent increase above today’s level. China has already overtaken the US as the world’s largest emitter of carbon dioxide. 

The continuation of these trends would mean two things: 1) oil-consuming countries would become even more vulnerable to supply disruption and resulting price shocks in a situation where 80 per cent of the world’s oil reserves are in the hands of state-controlled entities – the risk for energy becoming a strategic instrument is obvious, and 2) the very severe impact of a 55 per cent increase in carbon dioxide emissions is hard to imagine, when we are today saying that carbon dioxide emissions have to be halved – at least – if we are to avoid the worse consequences of climate change.

This does not appear to be very good news! But it is not the only possible future scenario. 

An alternative policy scenario – according to the International Energy Agency – demonstrates that the energy future can be substantially improved if governments around the world implement the policies and measures that they are currently considering. In this scenario, global energy demand would be reduced by 10 per cent in 2030  – equivalent to China’s entire energy consumption today. In the same time frame, global carbon dioxide emissions would be reduced by 16 per cent. 

By investing in energy efficiency and renewables,  we not only secure our energy supply and counteract climate change – we also save money. There are additional upfront costs involved, but these are quickly outweighed by savings in fuel expenditures. In other words, this scenario has all the advantages.

Let me dwell for a moment on the seriousness of climate change. Following on  to the IPCC- and Stern reports, there has been new reports that the situation is even more serious than previously estimated; the content in the atmosphere is for example growing faster than expected; the ice mass in the Arctic is melting faster than ever before. We are risking irreversible processes within the global climate system. I believe that during the last 12 months alone, the climate change issue has surfaced as one of the most urgent issues on the agendas of the world’s leaders.  

The reports give us plenty of reasons for acting now. So what can we do?

1) First of all, it is imperative that the UN meeting in Bali in December is a success. This is the forum for engaging major emitters such as China and the US, which together account for about 40 per cent of the world’s greenhouse gas emissions. An international climate agreement without these major emitters simply will not work. There is a heavy responsibility on all of us to make sure that we can start negotiations on such a comprehensive agreement in Bali.

2) Secondly, the EU has already made significant steps to reduce its emissions and to convert its energy supply to more renewable sources. The European Council last spring was historic in this regard with pledges to reduce greenhouse gases by 30 per cent within an international agreement and 20 per cent unilaterally as well as a target of 20 per cent renewable energy by 2020. 

3) Thirdly, and this is the most important point that I would like to make here today, we need a European Baltic Sea Strategy that can serve as a model for combining growth and competitiveness with taking on our responsibilities in the field of the environment and climate change. 

Today eight out of the nine Baltic littoral states are EU Members which implies a fundamental change of situation compared with the 1990s when most of today’s Baltic Sea cooperation initiatives were taken. This means that there is both the need and the opportunity to address many of the main challenges for the region through EU policies and instruments, open to EU and EEA members alike. 

Against this background, the first aim of a strategy should be to reinforce the region’s competitiveness and growth – and thereby also its contribution to overall EU competitiveness and to the fulfilment of the Lisbon targets. One of the key objectives in this respect would be to contribute to common long-term planning in policy areas crucial for economic development such as infrastructural and major environmental projects.

A second aim of this strategy would be to show the world that economic growth is compatible with environmental protection and reducing greenhouse gases. We need to work together on how to further develop various mitigation policies and measures such as carbon dioxide taxes, increased use of renewable energy sources, green electricity certificates and improvements in energy efficiency. 

There are also a number of acute and profound challenges facing the survival of the Baltic Sea. They are on such a scale that they need to be regarded in a broader European context and to be seen as an overall European concern. 

Another challenge is the rapid expansion of energy transits, in particular oil shipments, through the Baltic Sea, which in a few years will double to 150 million tons of crude oil annually. An accident involving a 100,000-ton tanker in the Baltic Sea would risk creating a much greater disaster in this shallow, enclosed sea than the 70,000 ton Prestige catastrophe in the Bay of Biscay in 2002 and could – if not handled decisively – lead to the collapse of the Baltic Sea for a period of 30 years

Your Excellencies, Ladies and Gentlemen,

We are facing many challenges in the years ahead, but my final word is still one of great optimism. Let us remember that our region is a fortunate one. We are rich in resources and skills. We all have the political will to create a more prosperous and greener future. Let us now work together to ensure that we make the right choices!