Governing the Green Economy in the Arctic

doi:10.21203/rs.3.rs-1840030/v1

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Governing the Green Economy in the Arctic

https://doi.org/10.21203/rs.3.rs-1840030/v1

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published 27 Mar, 2023

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In Sweden’s Norrbotten County, a “green transition” driven by market demand and new normative structures is underway, creating a regional mega-project designed to put Sweden at the forefront of emerging green industries. These industries, such as carbon-neutral steel fabrication, battery production, and data center hosting, all require large amounts of energy, land, and minerals. This paper applies the regional environmental governance framework to Arctic data to examine which stakeholders have the capacity to impose their agenda on the Arctic environment and the points of conflict and collaboration during this period of accelerated growth. The paper tests the hypothesis that regional governance performs better than other levels in accommodating a plurality of interests. A case study on Norrbotten County’s industrial mega-project centered around Luleå, Sweden shows the dominance of EU norms for reducing greenhouse gas emissions in this region. However, the existing regional governance model does a poor job of integrating the local Indigenous Sami preferences for land use. At the core of the difference between actors advancing the green economy and the local reindeer herders are different conceptions of nature and sustainability.

Sustainability

Regional Environmental Governance

Arctic

Green Economy

This analysis tests a key argument of the Regional Environmental Governance (REG) literature, namely that regional governance is open to a wide diversity of interests and can integrate them into a coherent environmental policy that gains greater legitimacy among the population. Looking at a case study of the region of northern Sweden, we find considerable support for this thesis. Our overall conclusion is that REG works in the sense that it facilitates one dominant approach to the green transition across the region but fails in that it does not sufficiently incorporate the plurality of voices and actors present. Nearly all actors in northern Sweden accept the European Union (EU)-defined goals for reducing greenhouse gas emissions and transitioning the economy away from the current reliance on fossil fuels. However, northern Sweden’s regional governance does not account for different understandings of the environment and by extension, land use, that are contributing to conflicting interests in the region. Most stakeholders—various levels of government, industry—favor a vision of weak sustainability in which growth and consumption are still prioritized. But, a small minority—Indigenous Sami organizations, youth advocates, environmental conservationists—favor strong sustainability, in which social and ecological elements are given primacy.

Climate change requires states, and increasingly non-state and subnational actors, to engage in mitigation efforts (International Panel on Climate Change, 2022). The EU has adopted an integrated strategy to address climate change through its Emissions Trading System, Effort-Sharing Regulation, and other land-use, forestry, agriculture, and energy legislation, assigning targets to specific countries based on their GDP per capita. The Nordic Council of Ministers adopted a Strategy for Sustainable Development as early as 2001 (Wøien Meijer & Orsolya, 2021), and after the 2015 UN Paris Agreement, released a Declaration on Carbon Neutrality, comitting to accelerate climate policy (Weber & Søyland, 2020). Within this context, Sweden is committed to reaching or surpassing many of the climate goals set by the EU and the United Nations, particularly around eliminating greenhouse gas emissions, even as it increases current energy usage. The national parliament has adopted the goal of zero net emissions of greenhouse gasses by 2045. The ambitious national renewable energy targets to be implemented (such as the targets under the Swedish Climate Act to reach a fossil-free Swedish car-fleet by 2030 and 100% renewable Swedish electricity production by 2040) will precipitate institutional, social and capacity challenges (Avelino & Wittmayer, 2016). Immediate and long-term sustainability in northern and rural areas therefore requires novel approaches to ensure governance and institutional arrangements account for different regional objectives (Meadowcroft & Steurer, 2018).

The push to reduce emissions and reach international climate goals is drawing attention to northern Sweden and its energy, mining, and manufacturing mega-project. A successful green transition in the north has the potential to reduce Sweden’s greenhouse gas emissions by nearly 10% (Bonde et al., 2020). Such a transition requires access to an abundance of renewable energy (Avila et al., 2018), making the region’s hydroelectric and wind power resources a growing focus for both domestic and foreign investors. However, the development of new data centers, iron pelletization methods, green steel production, and lithium-ion battery manufacturing will place intense pressure on local energy production capacity. Combining new ‘green’ industries with renewable power generation creates social and environmental sustainability challenges (Bergek, 2010; Knaster, 2010) including competition for land use that elucidate contradictions in sustainability (Gual, 2019; Xue, Weng, & Yu, 2018).

While the benefits from increased hydroelectric and wind power, fossil free steel, and batteries for electric vehicles are undisputed, there are clearly costs. Energy production reduces biodiversity in local rivers and repurposes land away from traditional uses. Indigenous Sami reindeer herders face new constraints on where they can move their herds. Cities and urban areas in northern Sweden now must address housing shortages, attract new workers, and expand infrastructure and services.. These challenges bring to the fore the trade-offs between environmental protection, economic growth, and social equity, the crux of the sustainability issue.

Debates on the matter of sustainability emerge due to different understandings of its integration into decision-making (Biermann, 2013; Bruff & Wood, 2000; Bulkeley & Castan Broto, 2013). Specifically, much of the debate surrounding sustainability is attributed to strong and weak versions of the concept (Huang, 2018), where weak sustainability allows for trade-offs, or substitutions, between economic, social, and environmental goals, while strong sustainability prioritizes environmental protection.

These divergent views on sustainability place focus on the governance arrangements in their ability to account for different interests in reaching and implementing decisions. Because of the historic ineffectiveness of environmental agreements at the global level, increased coordination at the regional level aims to reduce the scale of the challenge and improve the prospects for coordination (Balsiger & VanDeveer, 2012). Thus, a growing body of scholarly work on REG focuses on analyzing the relationship between key actors and themes within a distinct geographic area. Northern Sweden is one such geographic region.

Governing this construction of a regional mega-project requires managing rapid and sweeping change. Several tasks stand at the heart of this governance process. First, policymakers must make tradeoffs among benefits of new energy, resources, and manufacturing with the potential costs to the local environment, Indigenous community, and urban standard of living. Second, policymakers seeking to govern the region must coordinate among a variety of different actors, including levels of government (EU, Swedish, county, and municipal), corporations, Indigenous people’s organizations, non-profits groups, as well as current and prospective residents of the area. Third, those involved in governance need to address the rapidly changing social and built environments of the sub-Arctic urban settlements, which includes investing in infrastructure and services to attract a new workforce. Finally, governance requires integrating across multiple regions and scales. In our case study, Luleå, the capital of Norrbotten County, is far from an isolated component in the green transition. At the regional level, the evolving green economy requires a network of supporting resources and industries which affects the development of the surrounding towns in Norrbotten and neighboring counties. At the national level, northern Sweden will interlink with the drivers present in southern Sweden, where much of the country’s economy is based. At the EU level, Sweden has the advantage of resources and cheap energy. It is a logical supplier of steel for Germany’s car and appliance industry. In the broader international context, Russia’s war on Ukraine is speeding the transition and reshaping the structure of the international economy.

The key findings of this paper show that in northern Sweden the regional governance arrangement positions the industrial players as the driving force behind the green transition, with the government officials playing a largely supportive role. There is little pushback from the population except for specialized interests, such as the Sami reindeer herders who lose access to land due to the new development and possess few opportunities to shift the overall direction. While the new economy growing in Sweden’s north may produce fewer greenhouse gasses, the power relationship looks similar to the old economy.

The article proceeds in the following way. Following this introduction, we provide a concise overview of the Regional Environmental Governance framework, using it to identify what is important in understanding the nature of the green transition in northern Sweden. It then analyzes the position of key actors in relation to weak and strong sustainability and their perception of the transformation to a green economy. Finally, the article discusses the REG approach in understanding actors’ perceptions and its effectiveness in highlighting the power dynamics in the environmental governance of a geographical region.

REG as a framework for governing the green transition in northern Sweden

Along with the other articles in this special issue, we situate our analysis within anREG framework. As a field of study, REG lacks a consistent definition of “region,” with understandings ranging from environmental landforms, supranational organizations, multi-state legal agreements, or even collective social movements (Debarbieux, 2012, p. 120). Balsiger proposes that regions are at the very least transboundary, potentially involving both state and nonstate groups, yet does not specify what type of boundary is to be crossed (Balsiger & VanDeveer, 2012, p. 8).

While much of REG literature considers “regional” governance to occur between or across multiple states (Badenoch, 2002; Balsiger & VanDeveer, 2012; Conca, 2012; Obydenkova, 2022; Selin, 2012), our research focuses on a geographic area mostly within one state, Sweden, for several reasons. First, the industrial mega-project in the North is transboundary in that it transcends the purview of any one actor yet involves a multiplicity of stakeholders within the private, public, and third sectors, who at times collaborate, cooperate, or form symbioses in various formal and informal institutions. Second, the transition concerns multiple environmental entities (such as rivers, mountains, forests, etc.) which have uses and services upon which multiple actors depend. Third, the many actors hold competing views of how these environmental entities are to be governed. In this sense, the “regional” denotes not only the literal geographical area in which this green transition is occurring, but also the complex network of actors, environmental entities, and interests which together form an ecosystem of governance.

There is also a wide variety of perspectives of what the “environmental” concerns, from climate change policy to specific environmental entities or sustainable development more broadly (Balsiger & Debarbieux, 2011). Studying environmental governance at the regional level allows for analysis of how actors make decisions about specific environmental entities and how their ontological approach towards the environment informs that decision-making (Balsiger & VanDeveer, 2012). In northern Sweden, for example, environmental entities might include the Kiirunavaara mountain (which contains a large iron ore body) or the Lule River. Different actors might approach these entities with diverging ontologies, understanding the Kiirunavaara mountain as a natural resource, potential ski slope, or grazing land for animals, or the Lule River as a source of hydroelectric power or fish, or as a transportation route.

Analyzing the diverging ontologies of the environment in northern Sweden plays a large role in understanding how REG unfolds because it provides insight into the ways in which actors prioritize their interests in relation to environmental entities. The global demand for carbon-free raw materials production, climate policies set by supranational organizations, a national interest in reducing carbon emissions, a local push for population growth and job creation, as well as corporate interests, Indigenous economic and cultural activity, tourism, and other considerations all set expectations for the use and development of environmental entities.

To examine the relationship among actors, environmental entities, and interests, we explore ontologies of the environment through the framework of weak and strong sustainability. Weak sustainability makes substitutability necessary, where costs to the environment are compensated by social and economic benefits (Giddings, Hopwood, & O’ Brien, 2002). Therefore, sustainability harmonizes policy with existing markets through measures such as carbon taxes, “green” technologies, and socially responsible trade. Weak sustainability corresponds to a “Triple Bottom Line” perspective which incorporates environmental and social outcomes to the conventional economic outcomes (Elkington, 1998). Strong sustainability, in contrast, requires decision-making that precludes existing markets (Stål & Bonnedahl, 2016) and instead argues that protecting the environment and its functions is a precondition to reaching social and economic goals (Daly, 2005; Hopwood, Mellor, & O’Brien, 2005). Rather than looking to off-setting environmental damage through pricing and technological solutions, priority should be placed on decision-making that accounts for planetary boundaries (Steffen et al., 2018), and restoring environmental functions (Stål & Bonnedahl, 2016). The various actors involved in the governance of northern Sweden’s mega-project effectively subscribe to one of these conflicting approaches to sustainability, rooted in fundamentally different ontologies of the environment.

Governance in this case expands beyond formal policy-making actors, tapping into social and professional networks and other institutions that facilitate the diffusion of environmental norms (Balsiger & VanDeveer, 2012; Conca, 2012). Due to the plurality of actors, entities, and interests that participate in the green transition in northern Sweden, we approach governance as the diffusion of norms among and across actors in multiple sectors and levels of decision-making. The governance of environmental entities thereby becomes a process of negotiating “trade-offs” between ecological, economic, and social aspects of sustainable development (Balsiger & VanDeveer, 2012) so that the prevailing norm diffuses across the political ecosystem.

REG has, in some cases, been proven to more effectively diffuse norms and facilitate the implementation of environmental policies than governance at a global or national level (Conca, 2012; Klinke, 2012). This may be due to the relative proximity of decision-making to local political issues and environmental entities, as well as enjoying a legitimacy not found at higher levels of government (Balsiger & VanDeveer, 2012; Schwindenhammer, 2018), or the ability of regional-level governance to take into account a plurality of affected and relevant stakeholders (Tiwari & Joshi, 2015; Wallington, Lawrence, & Loechel, 2008). However, other studies of REG demonstrate that regional supranational organizations or frameworks do not necessarily have significant impacts on local environmental governance (Selin, 2012).

Perhaps the most significant question determining the effectiveness of REG is for whom or to what end it diffuses environmental norms (Klinke, 2012). Successful diffusion of norms may take the form of one prevailing understanding or agreement being accepted by formal and informal decision-makers and stakeholders. In our case, this would take the form of either strong or weak sustainability principles being comprehensively pursued and implemented by public, private, and third-sector actors. However, effective REG might also take the form of the plurality of actors and their environmental norms being taken into consideration. In the case of northern Sweden, this might materialize as actors agreeing upon a middle-ground in how they conceptualize the sustainable principles that guide the green transition, or a negotiation in which different environmental entities are governed by different sets of environmental ontologies.

Formal governance in Sweden

While the focus of this research is the ecosystem of governance of the green transition in northern Sweden, it is crucial to consider the facilitating role of the state and other levels of political organization. Examining state-level mandates draws attention to the political, economic, and social structures that inform secondary and tertiary levels of governance (Duit, Feindt, & Meadowcroft, 2016). Although a unitary state, Sweden functions within a multi-level governance system. The national government sets several environmental and climate objectives, particularly around emission reductions, that meet international commitments but require regional and local implementation. Thus, to fulfill many of the commitments made, national, regional, and local stakeholders are required to coordinate around shaping future sustainability. Previous research on topics such as water, wildlife, bioenergy and climate governance indicate that the coordination of policy is one of the main challenges for implementing Swedish and European environmental and climate policy (Matti, Petersson, & Söderberg, 2021; Sandström, Söderberg, Lundmark, Nilsson, & Fjellborg, 2020; Söderberg & Eckerberg, 2013). Northern Sweden is a region central to the governance of natural resources, indigenous rights, and renewable energy production, which brings to light the challenges of managing the implementation of different policy goals and the interests of different stakeholders.

Formally, all legislative powers reside at the national level in Sweden, within the Swedish Parliament (Riksdag), but various responsibilities are delegated to subnational levels. Municipal and regional authorities bear the responsibility of implementing environmental and planning legislation at the local level. Municipalities handle building permits and, as a result, play a significant role in infrastructure development. For example, the Swedish Board of Housing, Building and Planning requires municipalities to include suitable areas for wind power in their comprehensive plans. Included in these plans are consideration of shared land use, environmental impact, cultural heritage, and socio-economics, which involves gathering input from different interests. However, when these considerations include matters of national interest, the County Administrative Boards at the regional level are engaged.

As the home for the majority of mineral extraction, hydro power generation, and reindeer herding in Sweden, Norrbotten already faces competing interests over land use. Plans for expanding wind power, electrifying the vehicle fleet, ‘greening’ steel production, and all the related infrastructure require significant development in the coming years. A regional environmental governance perspective puts focus on the coordinating capacity within the region to handle the challenges related to the green transition, particularly the ability or willingness to account for interests that run counter to the current strategy.

Accordingly, the REG framework sets our research question: Which interests shape regional environmental governance in northern Sweden? Though a concern to be able to compete in the evolving global green economy is driving rapid economic and social change in the region, does the existing form of governance adequately consider the various competing interests in northern Sweden?

To investigate these questions in the context of northern Sweden, we performed an informant interview study (Esaiasson, 2017) with relevant actors across the region, in combination with site visits and document analysis. Drawing on a set of semi-structured interview questions, we asked 27 public officials and engaged stakeholders about how they perceived the costs and benefits of the industrial development related to sustainability goals in Norrbotten (Meyer & Sanklecha, 2014; Wang & Lo, 2021). This focus maps out the expectations and the perceived preconditions (related to technology, policy, infrastructure, scientific knowledge, and social/cultural activities) for sustainability amongst relevant regional organizations and municipal actors in both small and medium-sized municipalities located in the rural area of northern Sweden.

Interviews were conducted with representatives from Luleå Municipality (including in city planning, societal development, labor market development, and other sectors), a leading Luleå politician, and municipal companies, including a youth center, the public transit authority, the municipal waste and water management company, and a business development agency. Outside of Luleå, we interviewed private actors in the data center industry, municipal actors in Boden and Kiruna, as well as Indigenous community leaders in Jokkmokk. We talked to Norrbotten County-level actors addressing public transit and regional development. The interviews were conducted between May 22^nd and June 7^th, 2022, each taking roughly one hour.

Site visits were conducted in key industrial locations across Norrbotten County,including the LKAB iron ore mine in Kiruna, the Northvolt battery factory in Skellefteå, hydroelectric plants throughout the region, the massive Markbygden wind farm near Piteå, and several data centers, as well as sites of prospective industrial development, such as the Kallak mine northwest of Jokkmokk.

Document analysis was conducted on gathered materials including strategic plans and reports from EU, Swedish, county, and municipal level governments as well as informational brochures provided by interviewees and at site visits.

Data: Actors supporting weak sustainability dominate those backing strong sustainability

Table 1. Public, Industry, and Societal Stakeholders in Northern Sweden

NAME	TYPE	INTERESTS
Luleå Municipal Government	Public	Seeks to support industrial expansion and offset aging population by adding 20,000 residents, works to facilitate addition of new housing communities to attract and support new workers, holds sole rights over land use and harbor.
Norrbotten County Government	Public	Coordinates municipal and national government agencies, supports industry with goal of increasing population of region by 100,000; County Regional Board holds authority over environmental permits
Sámediggi (Sámi Parliament)	Public	Consults with Swedish government on issues of Sámi land use rights, health, social equality; concerned about industry encroachment on traditional lands
Swedish National Government	Public	Promotes industrial development; ensures Sweden’s leading role in combating climate change, protecting the environment
Luleå University of Technology	Public	Drives regional economic growth, trains next generation of leaders and workers, spurs industrial and policy innovation through research (e.g., technology, labor market statistics, supports business, space, and physics research in Kiruna satellite campus)
RISE	Public	State-sponsored independent research to make Swedish companies more competitive through research on new technologies (data center optimization, recycling heat for food production in Luleå, Boden)
LKAB	State-owned company	Processes iron ore in Kiruna mine and other locations to produce pellets; plans to stay competitive by producing fossil-free sponge iron and steel
Vattenfall	State-owned company	Operates hydroelectric plants throughout northern Europe; provides electricity for steel industry, data centers, other energy-intensive production
SSAB	Publicly traded company	Steel production plant with plans to build new green steel mill in Luleå (HYBRIT collaboration with LKAB and Vattenfall)
H2 Green Steel	Publicly traded company	Plans to build new green steel mill in Boden using hydrogen instead of fossil fuels
Facebook	Publicly traded company	Global tech firm with data centers in Luleå, part of the growth of the "Node Pole"
Svevind	Privately owned company	Operates and expands Markbygden Wind Farm near Piteå
Northvolt	Privately owned company	Operates a factory producing lithium-ion batteries for electric vehicles in Skellefteå
Dalvvadis	NGO	Economic association representing Sámi businesses and reindeer herding in Jokkmokk municipality and greater area
Sáminuorra	NGO	Youth nonprofit seeking to secure Sámi land use rights from industry encroachment; concerned with future viability of reindeer herding, culture, language
Kiruna Artist Collective	NGO	Artists interested in the politics of Kiruna and the mine
Fridays for Future	NGO	Sweden-based international youth organization promoting climate change policy; opposes building new iron ore mine in Jokkmokk

As the REG framework anticipates, northern Sweden boasts a multiplicity of public, corporate, and third sector actors who each play a role in governing the transition to a new green economy. Map 1 shows how the overall industrial megaproject of northern Sweden fits into the broader Arctic and European contexts. Map 2 displays the geographic location of the various components of the northern Sweden industrial mega-project. Table 1 lays out the key public, private, and third sector players in the system along with their key interests.

Analyzing the various actors in the region, their interests, and preferences for land use demonstrates that they hold different understandings of the natural environment. The industrial actors and their allies at various levels of government support a weak conception of sustainability, with its focus on continued consumer consumption and economic growth. A small minority, consisting of Indigenous Sami reindeer herders, youth advocates for addressing climate change, and conservationists, backs a strong form of sustainability, with an emphasis on preserving nature and traditional lifestyles. These different conceptions of the natural environment underlie conflicts between the two coalitions on how land in northern Sweden should be used. Figure 1 displays the two main coalitions.

Within this context, the needs of industry shape the overall form of governance. Iron ore and other resource extraction, electricity generation, and industrial production define land use policies and generate the need for additional labor, meaning that urban areas must grow to meet the new demands. State entities at the national, county, and municipal levels cooperate closely with the industrial sector in terms of supporting the expansion of the industrial infrastructure on northern lands and attracting new residents to work in the growing facilities. The industrial expansion and the urban growth needed to support it occupy the very land that the Sami and other advocates of strong sustainability seek to preserve. In the existing system of governance, these actors have a voice, but little ability to implement their preferences in practice.

Advocates of Weak Sustainability (Industry and Government)

With their weak conceptualization of sustainability, Swedish industry and government view the environment primarily in terms of resources that can be extracted and used to promote their goals of achieving a green economy. In this case, a green economy is one that reduces greenhouse gas emissions but does not take into consideration the extensive land that must be sacrificed to generate the electricity needed to make it work. This conception of sustainability means that consumers can continue their existing lifestyle without having to consider the interests of groups that want to use the land needed to support that lifestyle for different purposes. Electric cars made from fossil-free steel and lithium-ion batteries can replace existing models that burn gasoline and rely on coal-fired iron smelters.

Industry: The mining companies of northern Sweden extracting iron ore and other environmental products are the foundation of the regional economy. Although mining has long been part of the traditional economy, the need for steel and batteries makes it crucial for the green economy of the future. Converting traditional mining practices into ones that require no fossil fuels marks a first step in developing the green supply chain (Muslemani, Liang, Kaesehage, Ascui, & Wilson, 2021).

With its main operations in Kiruna, the state-owned mining company LKAB is currently developing a hydrogen-based process to produce carbon-free sponge iron. This product is a key component of green steel and will reduce the climate footprint of the automobiles and domestic appliances that are made from it. The production of fossil-free steel would make northern Sweden competitive in the global supply chain of industries that plan to market climate-friendly steel, with European car and appliance manufacturers prominent among them.

Despite its efforts to transition to the green economy, the mining sector incurs costs in terms of land use. The LKAB mine in Kiruna has historically interrupted Sami reindeer herding routes, violating development limits set by the Swedish parliament in 1867 (Myhr, 2015, p. 118). Additionally, extracting the iron ore is causing the ground under existing downtown Kiruna to sink, forcing the mine to finance construction of a new city center three kilometers eastwards. Since the city is dependent on the mine for its survival and many residents work for LKAB, there is little protest visible beyond a few opposition posters from the Kiruna Artist Collective. Many residents would prefer to maintain the existing city but accept the priority of the mine for their town’s current and future livelihood.

The construction of the new city center and living areas abound with contradictions. Planners have designed the new part of town to promote a green lifestyle, with denser housing than existed earlier. Nevertheless, there are some questions about the sustainability of the new construction: it located downhill from the former center and therefore 10-15 degrees Celsius, incurring higher heating costs and on land that may contain iron ore, potentially requiring another move in the future. In this sense, moving Kiruna’s downtown may not solve the problems that the mine faces, but simply postpone them.

Given Kiruna’s interruption of Sami reindeer herding paths, it is not surprising that the Sami are protesting the British mining company Beowulf’s plans to build a new iron ore mine at Kallak, northwest of Sámi cultural capital Jokkmokk. As with other mines, the new facility would squeeze the Indigenous population out of lands they traditionally use. The project is currently on hold until it produces an environmental impact report.

The iron ore flows to steel plants, which have operated for decades with a heavy reliance on coal but are also planning a transition to fossil-free production techniques (Hoffmann, Hoey, & Zeumer, 2020). Luleå’s SSAB, collaborating with LKAB and Vattenfall, established HYBRIT, a project to convert fossil-free iron pellets into green steel. Similarly, newcomer H2 Green Steel (H2GS) plans to build a fossil-free steel mill in Boden, 35 km northeast of Luleå, launching construction in July 2022. Once operational, plant operators anticipate that the Boden plant will remove 90 percent of the carbon dioxide generated during traditional steel production (Liljas, 2022). Steel accounts for approximately 7-9 percent of global anthropogenic CO₂ emissions and therefore is a prime target for decarbonization strategies. The municipalities of Luleå and Boden have a close relationship due to their aligned goals of expanding the regional economy and take advantage of the shared proximity to grow their similar industries and workforce.

Crucial to the local production is the region’s abundant green and cheap electricity. Historically, numerous hydroelectric dams in the north have generated this power. New sources of electricity come from the construction of Europe’s largest onshore wind farm, Markbygden, just west of Piteå. Again, the green energy these sources provide is not cost free. Construction of the hydropower dams in northern Sweden eradicated the salmon that used to swim in its rivers. The wind farms require a huge amount of land for the giant turbines, each of which requires its own road and extensive clearing of the forest for servicing.

The new processes for making steel are energy intensive. The HYBRIT and H2GS plants are estimated to increase Sweden’s annual electricity consumption by up to 50 percent, requiring significant expansions of local renewable production or imports (Sveriges Television, 2021). The intense demand for additional electricity generation will only intensify the existing demands for land with its costs to local biodiversity and Indigenous lifestyles.

The vast energy and other natural resources in the area are attracting a variety of new industries which put additional pressure on local land resources. Facebook brought northern Sweden to international prominence as a tech hub with its announcement in 2011 that it would build its first data center outside the U.S. in Luleå, adjacent to the Luleå University of Technology campus (Petersens & Viden, 2014). Northern Sweden is attractive to the data center industry because of its cheap and renewable energy, stable energy grid, cold climate, abundant land, strong connectivity, and stable political system. Facebook has continued to invest in the area and grow its capacity. In its wake, Boden has attracted additional data centers, including several devoted to mining cryptocurrency.. With the construction of Northvolt’sbattery factory, the region will move into new types of production to power the green economy which seeks to electrify transportation and many other applications. Northvolt claims to be “one of Europe’s first gigafactories,” which “produces batteries with the lowest environmental footprint in the world” since “All power is renewable, all batteries are recycled,” according to a sign posted outside the plant. When it reaches full capacity, the factory will produce 70 million batteries while consuming 2 percent of Sweden’s overall energy.

Government: All levels of Sweden’s government support the drive for a greener economy. The need to balance between industrial growth and environmental protection is enabled by both government and industry subscribing to basic norms focused on the idea that it is necessary to fight climate change and that it is possible to do so while developing a thriving economy.

Municipal: Sweden’s governmental structure is designed around the principle of local self-government and places significant decision-making power with the municipality as the entity closest to the individual. Municipal governments have jurisdiction over many public services including schools, utilities, geriatric care, and social services. Sweden’s tax system is structured so that municipalities are funded primarily by the income taxes of their residents, while sales, property, and other taxes are routed to the state. Municipalities receive varying levels of funding from the state and regional governments, who distribute non-income tax revenue according to needs and priorities. Because all income tax revenue remains at the local level, municipalities are incentivized not only to retain residents within their jurisdictions, but also to ensure that their working population does not decrease (through increased unemployment, population decline, or an increasing proportion of retired to employed adults). Municipalities also own a considerable amount of land, which they can sell to developers to promote new forms of development. This structure gives Swedish municipalities, including Luleå, considerable capacities in developing and maintaining their cities.

The municipal government of Luleå is pioneering efforts to grow the city from 80,000 to 100,000 residents by the year 2030 in order to provide the needed workers required for the planned industrial expansion and mitigate the costs of an aging (and retired) population (Dahlin, 2022). This goal is outlined in the municipal vision plan and is reiterated by municipal employees across departments, including the head of the municipal government, urban planners, economic developers, and societal strategists (Lulea Kommun, 2022). The relatively low levels of unemployment in Luleå mean that the city has to attract workers from outside the municipality (Luleå Kommun, 2020, p. 19). To attract this population, as well as accommodate such drastic anticipated growth, Luleå must invest in infrastructure and public services, which involves expanding and developing the built environment.

County: County governments in Sweden are relatively weak in comparison to municipal and national governments since they do not have the power to collect taxes, although they receive funds from the national government to be distributed to both public and private actors within the region. The county government promotes its priorities largely by facilitating collaborations with municipalities, businesses, industry, and Indigenous groups.

Norrbotten County has been identified among the top four of areas with greenhouse emissions-heavy industries that will require support in transitioning its economy and society in the coming years. Norrbotten has been undertaking a regional growth project since 2007 that developed in line with Swedish and EU goals for sustainable development. Most initiatives planned to facilitate a just transition concern supporting industrial facilities, funding technological innovation, developing a new workforce, and minimizing raw materials waste. Notably, the proposed actions skew towards facilitating the technological future necessary to pursue a green transition, rather than mitigating the social and cultural impacts of such a change (Moodie, et al., 2021).

Within the context of EU and Swedish goals, Norrbotten has a vested interest in the green transition as a major factor in the region’s future. The 2020 Regional Development Strategy says that “Norrbotten has to follow global developments and strengthen its competitive edge (Norbotten County Administrative Board, 2011).” The Swedish Arctic’s extractive capacities are highly beneficial to Sweden and the EU, so development there is inevitable (Khorrami, 2019). It is up to regional actors like the county and the municipalities to ensure that they reap the benefits of this development and ensure that efforts are in line with a green future.

National: Within the context of REG, the national government seeks to ensure that the country meets its climate change goals while continuing to develop along green lines. The national government is the actor that must deal with the most basic problem of ensuring that the economic changes do not undermine the interests of the most vulnerable segments of the population. In the case of northern Sweden, this means balancing the needs of the Indigenous Sami people with the effort to grow the new green economy. Since the Swedish government prioritizes the goal of reducing greenhouse gas emissions, the interests of the Sami often are overruled (Stjernström, Pashkevich, & Avango, 2020).

The Sami have been recognized as an Indigenous people with different standing in by the Swedish parliament since 1977 but were not written into the constitution until 2011. The Sami are formally represented in the Swedish government by the Sami Parliament, a popularly elected body designed to enable Sami to participate in political life. The Sami Parliament is both a politically elected representative body independent of the Swedish state, and a State administrative agency, both of which are legally recognized as bodies of self-determination. The Sami Parliament as an agency is primarily tasked with addressing issues of Sami culture, including the administration of reindeer herding. Nationally, the Sami are a small minority within Sweden and have only a handful of representatives in the Swedish parliament (Sami Parliament, Background 2022)

The Sami have a limited number of rights under Swedish and international law. A law signed in January of 2022 gives the Sami consultation rights, meaning all levels of government are required to consult with the Sami Parliament on issues of “special significance,” including questions of “land use, enterprise issues, reindeer husbandry, fishing, hunting, predator animals, mines, wind power, forestry issues, cultural issues, place names, and biodiversity on reindeer grazing grounds, as well as issues related to Sami preschools, education and research, and elderly care specifically for the Sami.” This law does not award the Sami Parliament a right to veto decisions, only to be formally consulted. If the two bodies do not agree on an issue, the Sami can be easily overruled (Sami Parliament, Consultation, 2022). Certain Swedish laws protect reindeer husbandry, but those protections are limited. For example, the Sami have a right to land and water, meaning that no public or private landowner may do anything to their property that would damage the land and water needed for reindeer husbandry. However, what land and water is needed for that purpose has a narrow definition, allowing for damages that do not fall under that definition. In sum, the Swedish political system gives the Sami representatives little political weight to advocate for their interests.

Supranational: Three inter/supra-national organizations with varying degrees of authority engage in the governance of northern Sweden’s green transition. The Nordic Council coordinates cooperation across Nordic States and territories, playing a key role in aligning priorities and opportunities for green growth. For example, the Council has explored the possibility of collaborating on energy research, integrating the renewable energy market, strengthening grid links, and establishing a joint end-user energy market to secure a reliable energy supply across the area (Nordic Council, 2016). The Council frequently proposes sustainability measures ahead of EU decisions, relying on exchanges of experiences and collaborations to strengthen Arctic Europe’s green growth initiatives. While the prospect of increased integration within Arctic Europe offers opportunities for greater transportation connections, industrial synergies, and energy cooperation (Stępień & Koivurova, 2017), few stakeholders dealing with sustainability in northern Sweden identify this project as integral to the regional green transition. Similarly, no key informants interviewed in this study identified the Arctic Council, the international body through which Arctic states can cooperate on common issues, as influencing the governance of the green transition.

The EU is mentioned frequently among high-level policy actors in county and municipal governments in northern Sweden, who attribute the origin of their goals for a green transition to the supranational organization. Through the European Green Deal, adopted by the European Commission in 2019, strategies for transitioning to a green economy while meeting Paris Agreement emissions targets set the stage for sustainability decision-making. As previously mentioned, the European Commission also grants funds to Norrbotten County to assist it in ensuring that the green transition is territorially just. However, the initiatives funded in pursuit of justice prioritize innovation, technological development, and capacity-building projects, rather than projects exploring the social and cultural consequences of this change, many of which would deal with the diverging understandings of the environment and land in question (Moodie et al, 2021).

Advocates of Strong Sustainability (Non-Governmental Organizations)

Battles over land use, whether for mining or power generation, are among the core reasons for non-governmental organizations to engage in Sweden’s political process. While there is a consensus among all actors that the planet must transition away from fossil fuels and adopt new forms of energy and production, there is a lack of agreement over what priorities should shape the new economy and ultimately who should bear the costs of bringing green steel and renewable energy to market. The non-governmental organizations (NGOs) stand out from the industrial and governmental actors in terms of their different conception of sustainability and their relative lack of political power. The key NGO actors are Sami organizations, youth advocating for climate policy, and conservationists. These groups seek to preserve the northern lands for their traditional uses rather than energy and steel production but have little ability to enforce their preferences.

The “green transition” in northern Sweden has massive implications for the Sami population. According to the Sami Parliament and environmental activist groups, mining and natural resource extraction constitute a threat to the traditional lifestyle of reindeer herding in northern Sweden (Kløcker 2022). The Sami people’s lack of political power to influence the decisions that affect them within greater Swedish politics is evident by decisions made surrounding the green transition that impact them.

As noted above, the new iron ore mine approved for development in Kallak is a major concern for several Sami communities in the region, whose seasonal herding paths cross the prospective mining site. In February 2022, the Sami Parliament submitted its final opinion opposing the mine, stating that it would devastate protected nature-based reindeer husbandry in the area and infringe on Sami culture and rights. They maintain that “reindeer husbandry in the area is the land use that in the most appropriate way promotes a long-term economy in an ecological, social and socio-economic perspective” (Sami Parliament viewpoint 2022). Despite the Sami Parliament’s official position, Beowulf mining was awarded a license for an iron ore mine in the Kallak region by the Swedish Parliament in March 2022 and plans to begin work after completing an environmental impact assessment.

The Sami have their own knowledge tradition that differs considerably from traditional Western understandings of what a green transition should look like. The Sami idea of a sustainable world adaptable to climate change is centered around the ability of the environment to support reindeer herding and therefore their traditional lifestyle. The reindeer are a natural part of the “mountain ecosystem” that the Sami seek to preserve (Sami Parliament Magnificent 2022). Reindeer herding hinges on careful management of grazing activities to preserve future food prospects for herds. Efforts backed by industrial and Swedish governmental bodies to extract resources from the mountain environment to promote sustainability appear to the Sami as directly detrimental to their own idea of sustainability. Similar intrusions come from the UN’s declaration of UNESCO Laponia World Heritage Site, which benefits tourists rather than reindeer herders and Swedish government protection for wolves, who hunt the reindeer (state compensation for reindeer lost to wolves is only one-quarter of their market value) (Kent, 2008, 268-9). Financial pressure to sell more reindeer meat can likewise deplete the herds.

Sami reindeer herders have few resources to make their case and compel action in the Swedish political system. Only about one-tenth of Sweden’s Sami population, 2500 people, engage in reindeer herding (Liljas 2022), most of whom need additional employment to supplement the income they receive from selling reindeer meat. These individuals typically work other part-time jobs in urban areas to support themselves and their families, a common practice since the 18th century (Kent, 2008, 119). Given the need to focus on income generation, there is little time to engage in politics.

Saminuorra, the Sami national youth organization in the Swedish part of Sapmi, seeks to influence Swedish policy on issues that matter to the Sami people, particularly youth, while also working to preserve Sami language and culture. Like other Sami organizations, the group is little match for well-funded industrial interests. It is working with broader youth initiatives, such as Greta Thunberg’s Fridays for Future, which has helped to give it additional publicity.

In some cases, the Sami are able to extract concessions from firms that build on their land. For example, the Markbygden wind farm takes up a considerable amount of reindeer herding land so the farm operators pay to truck the reindeer to lands farther away for winter grazing. Unfortunately, those lands do not provide sufficient sources of natural food, so it is necessary to feed the reindeer, forcing them into closer contact with each other and increasing the risk of disease (Liljas 2022).

Beyond the Sami, there is a growing concern among local interests who do not want to live with nearby windmills. Like the hydroelectric dams before them, the windmills come with some costs to the environment and aesthetics of the landscape. In 2021, local interests stopped 78 percent of plans to install new wind farms, according to the Swedish Wind Energy Association (Svensk Vindenergi) (Liljas 2022).

There is a general normative consensus among the various actors in northern Sweden in support of a transition to a green economy. This consensus is apparent in UN analyses and goals for the entire globe, EU directives for the continent, plans adopted by the Swedish state to play a leadership role in the transition, and efforts by the Norrbotten County and Luleå municipal authorities. The region does not depend on fossil fuel production so there are few interests advocating continuing dependence on it. Even the groups most affected by the transition recognize that the urgency of mitigating climate change requires a green transition.

The major industrial concerns in the region, even in traditional areas such as mining and steel making, have found ways to profit from the transition and are able to envision a future in the new economy for a modified version of their operations. The abundance of renewable energy in the area makes the changes possible.

The central issue of dispute is over land use and how the government and industrial players can implement their expansion plans in ways that have least impact on traditional reindeer herders, local interests who do not want windmills in their vicinity, and conservationists. In sum, despite the consensus that a new green economy must be built in order to pave the way for change, there remains considerable disagreement over how change should occur and, most importantly, whose lives should be impacted the most.

Currently, the industrial interests dominate government decision making at all levels drive changes in northern Sweden (Wøien Meijer & Orsolya, 2021). Sami and other local interests that prefer to maintain traditional forms of land use have much less impact.

What does bringing Arctic knowledge into dialogue with REG literature tell us? Is the regional governance system of northern Sweden open to a variety of voices and capable of integrating these diverse interests in a way that accommodates all their concerns?

This case study of northern Sweden helps to integrate the regional environmental governance framework with Arctic studies. REG analyses have usually focused on institutions that exclude Indigenous interests while such an approach is unthinkable in the Arctic context. A better understanding of the interests of the Sami people in northern Sweden, and the frequent marginalization of these interests in the decision-making process, helps make a REG framework more applicable to Arctic realities. Although the Sami have expressed strong concerns about how the green economy and industrial development will affect their traditional lifestyle, there have been few effective examples of efforts to integrate these concerns into Swedish policies. In some cases, corporations have made concessions to Sami complaints, but these are typically on an ad hoc basis.

Although the concept of “region” is only loosely defined in REG, we have found it useful to apply it to the region of northern Sweden. Norrbotten County’s embeddedness in the EU and the Swedish national system has helped to spread the diffusion of green norms, supporting the creation of a consensus among the many regional players involved in the green economy transition (on the role of regional international organizations in diffusion of green norms, see, for example, (Ambrosio, Hall, & Obydenkova, 2021; Hall, Lenz, & Obydenkova, 2021; Lavelle, 2021)). In this sense the regional level of governance has worked effectively in instilling sustainability norms in Norrbotten County as the literature expects (Selin 2012; Klinke 2012; Conca 4 2012; Ostrom 1990; Libman and Obydenkova 2014). Similarly, the sustainability norms in this case are widely diffused among the population and accepted by industry, government, and NGO representatives alike.

However, if we consider sustainable development as “procedural norms for reconciling the tradeoffs between environmental, economic, and social dimensions of wellbeing” (Balsiger, 2012, p. 58), the northern Swedish case becomes more complicated. There the interests of the Sami are clearly given lower priority than the priorities of Swedish, European, and global actors in seeking to implement the “green revolution.” Northern Sweden has clearly made tradeoffs, in this case favoring those who support the green economy, which effectively sacrifices many of the priorities of the Sami people, who represent only a small group compared to the larger green coalition. In this case, in terms of the global politics of sustainable development (Fravel, Lavelle, Odgaard, 2021; Lavelle, 2021b), the overwhelming growth coalition favoring advancing the green economy is pitted against the Sami reindeer herders, who do not oppose the green transition but seek to shift its negative impacts off their lands.

Circum-polar Arctic management and governance structures are fragmented. What happens in Arctic areas is largely determined by which country the actions are happening in, due to the significant role of national public and financial policies, as well as dependence on national infrastructure (Wøien Meijer & Orsolya, 2021). Russia, with its authoritarian and centralized government, is starkly different from the rest of the Arctic and, even among the Western Arctic countries, there are considerable differences between the European and North American Arctic (Burns, Orttung, Shaiman, Silinsky, & Zhang, 2021). Likewise, there is considerable variation across northern Sweden.

Among international institutions, the role of the EU is the most important in terms of norm diffusion. The EU priority of reducing greenhouse gasses has clearly prevailed and is widely supported throughout the region of northern Sweden. While the Arctic Council addresses environmental rather than security issues, its work is on hold due to Russia’s war of aggression against Ukraine. Nevertheless, even when it was operating, its output had little influence over industrial development policies. The role of the Nordic Council of Ministers is also less visible in northern Sweden.

With its rich iron ore deposits, abundant renewable energy, and extensive human capital, Luleå and the surrounding region in many ways represent a relatively successful case of sustainable development in the Arctic. It would be hard to replicate this success in Alaska, northern Canada, or Russia, where many of Sweden’s assets are lacking. Also lacking in those areas is a consensus on the need to move forward with a green transition because those parts of the Arctic have relied heavily on fossil fuel production to spur their development. Perhaps this lack of agreement on an underlying norm is the most challenging obstacle in the other parts of the Arctic since it prevents investment of resources in green development.

This case study of northern Sweden contributes to better integrating the REG and Arctic literatures. In particular, it helps to confirm the hypothesis that the European regional level is the best for defining and disseminating green economy norms. Arctic realities and analyses of them are also helpful for highlighting the limits of the regional approach. Evidence from northern Sweden suggests that an understanding of the regional level of governance is incomplete without considering the costs of the green transition to Indigenous inhabitants. In northern Sweden, the Sami conceive of nature in different terms than those who see the environment mainly in terms of extracting resources. They prefer traditional uses for the land rather than using it for mining iron ore or generating electricity.

Future research investigating the nexus between REG and Arctic concerns can hopefully dig deeper into the institutional structure regulating Arctic life to better understand how these policy-making bodies can incorporate an in-depth understanding of Indigenous interests and ensure that they are better accounted for in future policies and development practices. Additionally, future studies should examine the consequences of the existing relationship for long-term economic and social sustainability in the region and seek ways to measure the benefits of a more inclusive approach.

Funding

This research was supported by the United States National Science Foundation through grant number 2127364.

Competing Interests

The authors have no relevant financial or non-financial interests to disclose.

Author Contributions

Each of the six co-authors participated in the field research and contributed to the text and editing the text. Zoe Garbis led writing the introduction and REG literature review. Gregory Poelzer led writing the sections on the introduction, Swedish government and methods. Robert Orttung led writing the sections on data, discussion, and conclusion. Erin McCarthy contributed to the data and discussion sections. Melissa Shaiman provided the figure and table. Jacob Tafrate provided the two maps. Zoe Garbis and Robert Orttung edited the text.

Data Availability

The datasets generated during and/or analysed during the current study are not publicly available due to the need to deidentify sources who spoke with the researchers, but are available from the corresponding author on reasonable request.

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Map 1 and 2 are available in the Supplementary Files section

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Map 1. Northern Sweden in the Context of Europe and the Arctic
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Map 2. The Industrial Mega-Project in Northern Sweden

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Governing the Green Economy in the Arctic

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Introduction

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Advocates of Weak Sustainability (Industry and Government)

Advocates of Strong Sustainability (Non-Governmental Organizations)

Results

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