Saleemul Huq and Karl-Petter Thorwaldsson on the road to a post-fossil economy
For Saleemul Huq, the climate debate has gone far beyond a simple environmental issue. According to the Director of the International Center on Climate Change and Development (ICCCAD), the climate crisis is a matter of justice, equity and equitable development that concerns everyone. Karl-Petter Thorwaldsson is Swedish Minister for Trade, Industry and Innovation and former President of the Swedish Confederation of Trade Unions. Sweden, he says, has shown that being an environmentally friendly country can be more profitable than being dependent on fossil fuels. Equal times recently sat down with the pair to discuss solutions to ensure workers are not left behind in the transition to a fossil-free world.
Mr. Thorwaldsson, what have been the challenges and opportunities of the transition to a low-carbon economy in Sweden?
Karl-Petter Thorwaldsson: It’s been a big question for companies ever since we started working on the goal of being fossil-free by 2045. In the beginning, a lot of companies were just talking about the extra cost, loss of jobs, etc. But when they started evaluating their business, they saw that they could actually make more money by transforming into zero-carbon industries. For example, the biggest challenge is in the steel industry. In Sweden, they have launched a project called “hybrid” between the state mining company LKAB and the largest electricity company, Vattenfall. It started a few years ago and they produced the world’s first fossil free steel in early 2022. And in fact the demand for fossil free steel in the rest of the industry, the rest of Europe, the rest of the world is very big. So they actually decided to make this change 15 years earlier, so in 2030, because they can make more money selling fossil-free steel than they actually make when competing with d others in the fossil-dependent steel sector. So for them and for many others, we see that when they make these changes, the market can be very welcoming towards these new products.
Mr. Huq, how would you define just transition (in the context of energy transition?)
Saleemul Huq: Just transition refers to industrial workers in the fossil fuel sector who may have to sacrifice their jobs, so that we wean ourselves off fossil fuels as soon as possible, but they need to be recycled; they need to be taken care of. They are not the ones who have to suffer the consequences of this transition. And that is what we mean by just transition. And it’s good to see that unions around the world are coming to this. They are not fighting to preserve those jobs, but they are fighting to have good and better jobs in the future.
How do you think social dialogue can contribute to a just transition?
SH: Well, I think one of the realizations that we’ve had in the last 30 years of climate awareness, and the climate problem has gotten much worse over that time, is is that it is a whole-of-society approach. . It’s not something we can leave to our leaders to solve on their own. First of all, they didn’t. And second, they can’t do it, even if they want to. They need the involvement of all sectors of society, employers and employees, in the formal sector, in the informal sector, the people who work there, the farmers, the fishermen, the schoolchildren – everyone must be involved . The good news is that it is starting to happen. Almost all people with some level of literacy and knowledge, general knowledge, around the world are aware of the problem of climate change; is aware of the problems they face in their own localities, in their own countries.
And by the way, climate impacts are now happening everywhere, even in rich countries. It is therefore no longer just the poor countries that have to worry about it. Even rich countries have to worry about it. And so it’s a uniting factor for all people to realize that this is something that needs collective action and that all sectors of society need to be involved in discussing what needs to be done, obviously, at the local level, at the national level, but also at the global level. And more and more you see that the meetings of the United Nations, the COPs, that are held every year, are not just the heads of government sitting behind closed doors and negotiating. There are thousands of other people who go there. I’m not going there as a negotiator. I go there as a spotter and network with other spotters. And there are many, many more people trying to solve the problem now, which is a good sign. The question is that it is not going fast enough. We need to make this happen faster.
Mr. Thorwaldsson, how can Sweden achieve carbon neutrality by 2045?
KP.T. : We have divided our objective into 22 programs, in collaboration with the industry. Then we talk to all the companies and try to address the issues together. For example, for electric mobility, cars, trucks… Sweden is a huge producer of trucks and cars and the industry is now saying that by 2030 they can change all fossil fuel engines to battery. So what we’ve done in government is invest with industry in three e-mobility centers where they can actually test and evaluate their battery products. And this was supported by the state and by the European Union. Working with industry, we have now invested some $350 million [Swedish crowns, about €34 million; US$38 million] in this technological change. And after that, battery factories came to Sweden and asked if they could also invest. So now one of the big new industries in Sweden is the battery industry. It all started in Skellefteå in the north, where we have cheap electricity, by a company called Northvolt. They are now building a whole new battery industry. They will employ around 3,000 people, so this is a record for a new company. Thus, there are more jobs created by this change than there are jobs that will be lost in the old economy dependent on fossil fuels. So we are very optimistic.
How are Swedish workers reacting to these changes?
KP.T. : At first they were very skeptical about the rapid changes we want to put in place in Sweden to be carbon neutral by 2045. So there was an agreement signed between the employers and the unions, where they also asked to the government for support to retrain people who are in their 40s. This was put in place on January 1, 2022 and it’s actually a fantastic plan and we’re really happy to deliver it to the market. For many people who started out in an industry, whether as managers or blue collar workers, changing careers in their 40s is very difficult, especially if you are supporting your family or have a mortgage on your home. It’s too expensive to take a gap year, so this new plan gives everyone in Sweden the opportunity to have a training year with 80% of their old salary in order to retrain.
Mr. Huq, what needs to change, at the political level, for the transition to be just?
SH: Well, politics is always a difficult process and politics is always very short term. Politicians have very short periods in power, and anything they do that will have long-term fruit is given very low priority. They need results very quickly. So it’s a very difficult thing and that’s why we didn’t have as much movement as we should have. But nonetheless, an electorate that understands the need to make investments now that will pay off years from now is the one that needs to make politicians realize that they will actually vote for them if they make that promise. And I hope that will happen.
Mr Thorwaldsson, how can European trade unions be fully involved in this just transition?
KP.T. : I think the dialogue with the unions is crucial and it’s really easy in Sweden, Norway, Finland… The countries around here have a dialogue with the employers. And I want to send a message to my political friends across Europe, especially in the former Eastern Bloc like Slovakia, Czech Republic, Poland, Bulgaria. There they have just transition programs funded by the European Union but they don’t even invite the unions to the just transition talks. I think Europe should say to all the member countries: ‘If you don’t invite the workers, if you don’t invite the trade unions, I don’t think you should be able to access these funds, because they have to part of this rapid transition of the economy, so I strongly believe that we should always invite the unions.
Mr. Huq, how can we fight climate change without risking more inequality in the world?
SH: It has to be approached in a system of solidarity throughout the world. If we don’t have solidarity, we can’t face it. And at the moment we don’t. What we have are rich people looking after themselves. And if it costs them US$1, they won’t spend that US$1. On the other hand, the poor lose 100 US dollars. And the rich don’t care. So people are losing right now. The cost is felt by the poor in poor countries with the rich who cause the problem who don’t care. So we need them to care.