Shortcomings in central government efforts on climate transition in agriculture
Progress on the agricultural sector’s climate transition is slow. The Swedish National Audit Office’s audit shows that this is partly because central government efforts are too limited. This is despite the fact that there are measures available within agriculture that could contribute to achieving the climate goals cost-effectively.
The Swedish National Audit Office has audited the central government’s efforts on the agricultural sector’s climate transition. The audit covers the following policy instruments: Klimatklivet (the Climate Leap), the subsidy for biogas production from manure, compensations schemes for the cultivation of catch crops and intermediate crops, and advisory services on climate measures.
The overall conclusion is that these policy instruments are largely efficient, but only cover a minor part of greenhouse gas emissions from agriculture. At the same time, the Swedish National Audit Office considers that the Government’s management has not led to the agricultural sector contributing effectively to attaining the climate goals.
For example, the Government has not presented any plan for how the agricultural sector is to help reach the 2045 climate target and how conflicting objectives are to be managed. The Government has also not developed policy instruments for a large proportion of emissions from the agricultural sector, even though cost-effective measures are available that could help meet the climate objectives.
“For the individual farmer, climate measures are not usually commercially viable. However, with state aid they could help reduce emissions or increase carbon sequestration in a cost-effective way for society,” says Mia Bivered, project leader for the audit.
The Swedish National Audit Office also notes that the Government has, so far, not advanced the proposals submitted to replace tax reductions on diesel in agriculture with other competitiveness-enhancing support that does not subsidise fossil fuels. Such a change has the potential to reduce emissions without adversely affecting agricultural production or profitability.
On the other hand, the Government has decided on a new compensation scheme for the cultivation of forage crops to increase carbon sequestration, even though the Swedish Board of Agriculture has considered that this support will not significantly increase the cultivation of forage crops and will therefore have a limited climate impact. This support is being introduced because there is a risk that Sweden will not meet the EU’s minimum requirements for budget allocation to environmental and climate measures in Sweden’s Strategic Plan for the EU’s Common Agricultural Policy for 2023–2027. It is the assessment of the Swedish National Audit Office that the Government could use this EU funding for more cost-effective measures.
Irregular national funding of the existing forms of aid has been another problem, which has created uncertainty as to whether support will be available. For example, the Swedish Environmental Protection Agency has been unable to use a significant part of its allocation for the Climate Leap and new application rounds have been cancelled because, in budget proposals over several years, the Government has not adapted the Climate Leap authorisation framework to the size of the allocation. This has also affected which measures have received support, leading to a risk of failure to allocate funds to the most cost-effective measures.
“The Government’s efforts on the agricultural sector’s climate transition need to be more effective. More policy instruments for climate measures in agriculture could improve Sweden’s potential to reach the climate goals cost-effectively,” says Auditor General Christina Gellerbrant Hagberg.
Recommendations in brief
More measures are needed for Sweden to reach the climate goals. The audit shows that more climate measures in agriculture are possible and are cost-effective alternatives. The Swedish National Audit Office’s recommendations to the Government include:
- developing and presenting a plan for how the agricultural sector is to contribute to achieving Sweden’s long-term target and climate commitments in the EU
- introducing policy instruments for cost-effective climate measures in the agricultural sector
- replacing tax reductions on diesel for agricultural, forestry and aquaculture machinery and vessels with other competitiveness-enhancing support that does not subsidise fossil fuels.