energies

Article
Trade in the Carbon-Constrained Future: Exploiting
the Comparative Carbon Advantage of Swedish Trade
Hana Nielsen * and Astrid Kander
Department of Economic History, Lund University, 223 63 Lund, Sweden; [email protected]
* Correspondence: [email protected]; Tel.: +46-46-222-03-45




Received: 26 May 2020; Accepted: 8 July 2020; Published: 14 July 2020


Abstract: This paper introduces a new concept of comparative carbon advantage as a potential
climate mitigation tool. According to the concept, welfare gains in terms of reduced global CO2
emissions can be achieved by exploiting cross-country sectoral differences in carbon intensity and
decarbonized electricity system. The paper empirically tests the concept by utilizing annual data of
Sweden between 1995 and 2008. Overall, the results show that Sweden contributed nearly 590 million
tons of potential CO2 emissions savings through its exports by having an efficient and low-carbon
production and electricity system. This total amount of 590 million tons of CO2 emissions relates
to the total savings made if the same amount and composition of Swedish exports was produced
using the world average technology. Furthermore, the contribution of Sweden’s low carbon electricity
generation was over 34% of the total savings, of which some 20% were direct exports of electricity and
80% was electricity embodied in exported products. This research provides a critical understanding of
the impact of efficient production and low carbon electricity in generating relative comparative carbon
advantage—a policy relevant aspect for the increasingly globalized, and carbon-constrained, world.

Keywords: foreign trade; comparative carbon advantage; carbon emissions

1. Introduction
Since the 1970s energy consumption has stabilized in Western Europe, while economic growth has
continued [1]. Structural changes (away from heavy energy-intensive industrial production towards
lighter industries) together with technological changes (efficiency in energy use) have been put forward
as the proximate drivers of this decoupling, while the underlying (ultimate) reasons are open to debate.
Ultimate reasons could be a natural shift over to more demand of services than industrial goods as
countries develop [2], but it could equally well be a sign of the outsourcing of heavy industrial activities
to emerging economies. Naturally, if developed countries live in the service economy and import
their heavy industrial goods, the pollution problem is not solved but merely shifted around in the
world. So what is the evidence on outsourcing? The magnitude of international trade has increased
substantially and so has the amount of energy and emissions embodied in trade. Between 1970 and 2009,
the global trade increased by some 7% annually [3]. Numerous studies emerged over the last decades
to quantify the energy and carbon content of these increased trade flows. In general, most studies find
that developed countries are net importers of embodied emissions while developing countries are net
exporters [4]. Furthermore, production is often moved to countries that lack stringent environmental
legislation and efficient modes of production, where relative carbon intensity is far higher than that of
the developed countries. Clearly, this poses a threat to any ambitious global and national sustainability
goals if this means that the developed world is shifting emissions to other non-regulated countries,
rather than solving the urgency of global climate change. Still, the evidence is not clear cut on the
outsourcing issue: the conventional way of measuring outsourcing has flaws because it overlooks that
a significant part of what appears to be outsourcing is actually only different technology and energy

Energies 2020, 13, 3613; doi:10.3390/en13143613 www.mdpi.com/journal/energies

Energies 2020, 13, 3613 2 of 25

systems [5]. In fact, for the period 2000–2014, 20 EU-countries and the US, emissions decreased over the
period regardless of measure, and the same was true for the EU. Since Gross Domestic Product (GDP)
grew in 18 of these countries, the results provide unambiguous evidence for absolute, albeit modest,
decoupling of economic growth from carbon emissions [6]. Similarly, other research has found recently
some evidence of both relative and absolute decoupling in a number of world countries [7]. The large
increase in global emissions that nevertheless occurred during the period was driven almost entirely
by increasing domestic consumption in China and developing countries. Still, international trade has
the potential either to lowering the global emissions or to increasing them, depending on how that
trade is organized; if it is climate smart or not.
Overall, the world is intensifying its efforts to reduce carbon emissions, though much of the
efforts remain localized in a handful of regulated countries. The current absence of a global effort
to curb greenhouse gas (GHG) emissions thus becomes increasingly problematic in a world with
virtually free trade and carbon emissions embodied in traded goods. As a result, there is a danger
that emission reductions in regulated countries with clear absolute reduction targets become offset
(or exceeded) by emission increases in unregulated areas or areas with only relative carbon reduction
targets. If this is the case, then any national efforts in lowering emissions may be undermined, and
lead to an overall increase of global carbon emissions. So far, much attention has been devoted to
the studies on the potential danger of carbon leakage [8–12]. However, trade does not only lead to
geographical shifts in global production and structural change. Trade can also contribute to reduced
global emissions if countries with access to low carbon energy and energy efficient production in goods
that are normally associated with very high energy intensity, are the exporting parties. Thus national
efforts can contribute positively to the global climate if production increasingly takes place in more
carbon-efficient countries as this could potentially lead to a net decline in global emissions.
The major aim of this study is to quantify the magnitude of potential global carbon savings if
trade patterns increasingly exploit national differences in carbon intensity in a climate smart way.
The focus will be on the role of efficiency and decarbonisation of the energy system applied on the case
of Sweden and its impact on the embodied emissions in its trade. Sweden is a particularly interesting
example: a country with good access to cheap and virtually low carbon electricity, energy efficient
production as well as substantial exporter of energy-intensive industrial goods. In 2008, the carbon
intensity of the Swedish economy was one fifth of the European average carbon intensity and less
than one tenth of the global average. We argue that this substantial difference in carbon intensity gives
Sweden an absolute as well as comparative carbon advantage as opposed to other producing countries.
It is beneficial for the global climate if heavy industrial production is located to Sweden rather than to
other places. The major hypothesis is that countries with a comparative carbon advantage in a certain
productive sector can have a beneficial effect on the global environment by increasing exports from this
specific sector. Sweden, for example, with its ambitious environmental protection laws, could possibly
contribute to welfare gains in terms of reduced global carbon emissions by exploiting differences in
sectoral carbon efficiency through international trade. In this paper we show that Sweden contributed
nearly 590 million tons of potential CO2 emissions savings through its exports by having an efficient
and low-carbon production and electricity system. This total amount of 590 million tons of CO2
emissions represents the absolute savings made at a global scale if the same amount of Swedish exports
was produced elsewhere using the world average technology (and world average carbon intensity).
Furthermore, we find that the decarbonized electricity system accounted for over one third of the total
savings, far more than for any other country. Contrary to most other papers, the role of trade is thus
studied as a potential climate mitigation tool.

2. Theoretical Considerations
In general, there are two main mechanisms that can reduce the negative consequences of our
energy use: making more economic use of the existing energy resources (efficiency) and gradual
transition to low carbon energy resources (sustainable transition). A sustainable transition furthermore
Energies 2020, 13, 3613 3 of 25

does not only involve the transition to a fossil fuel-free society but is also largely embedded in other
areas, such as technological, social, institutional and economic change [13,14]. Yet, without any global
emission reduction target it becomes problematic if these efforts to limit future emissions of greenhouse
gases (GHG) remain constrained to a handful of countries, as trade may erase any improvements
achieved. This research paper shows that trade, together with the predicted future increase in the
global trade flows, can also be used as a climate mitigation tool. This is because of the theoretical
potential to limit the global greenhouse gas (GHG) emissions if countries increasingly exploit the
national differences in productive efficiency and carbon-intensity levels of its traded goods. This paper
studies and quantifies the global environmental benefits of Sweden’s foreign trade. The role of foreign
trade as a possible emission reduction tool has rarely been explored in the past, but the continuous
rise in emissions (and energy) embodied in foreign trade provides an important motive to study this
phenomenon further.

2.1. Efficient and Decarbonised Economy

Historically, there have been substantial differences in the efficiency of global production,
particularly in energy and carbon efficiency. After 1970, energy productivity differences across
countries are larger than the differences in labor productivity [15]. Indeed, although there has been
some degree of energy productivity convergence in world manufacturing sectors since 1970 and
particularly after 1990s, the cross-country differences in the utilization of energy, and resources in
general, remain larger than those in labor productivity [15–17]. The cross-country variations in energy
productivity are often closely related to cross-country difference in carbon efficiency [18].
Decarbonisation of the economy is one of the prerequisites of meeting our climate objectives.
Decarbonised economy (sometimes referred to as low-carbon economy (LCE) or low-fossil-fuel
economy (LFFE)) is an economy generating much of its Gross Domestic Product (GDP) with the help
of low-carbon energy resources and thus with a minimum level of CO2 emissions. The process of
decarbonisation does not only ‘require a reduction in the energy intensity of GDP, but also in the carbon
intensity of GDP’ [19]. Decarbonisation can be induced through increased energy efficiency, material
efficiency and reducing the carbon intensity of the energy system (low-carbon energy production or
carbon capture and storage (CCS)) [20]. It was thus proposed, that an increased electrification of the
major energy-intensive processes could be one of the potential drivers of the decarbonisation of the
economy. Previous research has shown that improvements in energy efficiency through applying best
available technology in industry can potentially reduce the energy intensity by 20–25%, before the limit
for maximum energy efficiency is exhausted. Even though this represents potentially satisfactory levels
of carbon efficiency, clearly other mechanisms will need to be employed. The increased deployment of
bioenergy and the diffusion of the CCS technology have been explored in other studies as a potential
to combat some of the carbon emissions [18]. Although the potential for savings has been found
substantial for the four most energy intensive industrial sectors (cement, iron and steel, chemicals and
paper and pulp) and in a range of 70–90% reduction of the sectoral carbon emissions, the feasibility of
this large-scale transformation remains uncertain.
In the light of this development, an attempt has been made to model the potential carbon savings
if electricity is increasingly used in the energy and feedstock supply for the production of seven key
basic materials in EU28 [20]. Clearly, for this to be beneficial in terms of carbon reductions much of the
electricity must be produced using renewable sources. The authors argue that all energy and feedstock
needs can be substituted by electricity produced from low-carbon sources and thus that the potential
for future decarbonisation of the EU28 industrial sector is large [20]. Electricity can be regarded as the
main future energy carrier in a decarbonized world. Although theoretically feasible, this additional
electrification of the industrial processes would result in tremendously increased demands on electricity
production and an integration and adaptation of the existing electricity system would be necessary.
It would also entail ‘substantial changes in relative prices for electricity and hydrocarbon fuels’ [20].
Energies 2020, 13, 3613 4 of 25

2.2. Absolute and Comparative (Carbon) Advantage

The concepts of absolute and comparative advantage date back more than two centuries. According to
Smith, a country has an absolute advantage if it produces and exports those goods which it can produce
cheaper than other countries [21]. Comparative carbon advantage, on the other hand, relates to the
opportunity costs of production and how these differ across countries, less so the actual absolute
costs of production given the countries factor endowments. According to the Ricardian theory, it is
mainly the relative differences in countries’ abilities to produce goods and services that determine
their pattern of trade [22]. Since certain production factors like natural resources or labor are less
mobile than capital, countries can benefit from specialization in goods in which they are relatively more
productive (have comparative advantage) and importing other goods where they lack this comparative
advantage. Absolute and comparative advantages are not mutually exclusive. Countries can have
comparative advantage in sectors where they do not have absolute advantage, yet the exploitation of
their comparative advantage will lead to increased welfare gains. Sources of comparative advantage
are often dynamic and complex, but usually a result of specific factor endowments required for the
production, stemming from the constant interaction between the industries and countries and their ability
to provide these requirements. Everything else equal, countries with weak environmental regulation
tend to have a comparative advantage in polluting industries and tend to export relatively more from
polluting industries [23]. On the other hand, decarbonized countries tend to have comparative advantage
in ‘clean industries’.
Increased trade involvement and specialization can, in turn, allow for increased economies of scale
and further improvements in its comparative advantage, the so called ‘gains from trade’. Gains from
trade can be both static as well as dynamic. Static gains from trade according to comparative advantages
are unevenly distributed among the trading partners. This idea relies on Ricardo’s idea of trade
according to comparative advantages which will lead to systemic gains: overall productivity in the
system will go up, and the extra production will be shared among the trading partners. There will be
internal losers and winners inside the countries, but all nations will gain from trade to some degree.
Dynamic gains from trade do not stress the role of trade per se, but rather innovations and structural
change within nations as a result of increased trade involvement. What matters for economic growth
and development is diversification of the economy, technological development and labor productivity,
rather than trade per se. If trade contributes to diversification and technological change it is good for
the nation; if not, it is bad.
Absolute advantage in carbon efficient production—one that is characteristic for countries such as
Sweden—is often seen as a costly measure and in a sense not an advantage when compared to other
countries as the additional costs for low-carbon technologies may lead to the loss of competitiveness
in the international markets, as long as there is no globally enforced tax on carbon emissions.
Climate change is largely an externality to the economy and not priced into decisions or trade patterns.
But this situation is gradually changing. An increasing number of countries in the world are pricing
carbon emissions. Around the world, almost 60 carbon pricing initiatives had been implemented in
2018, or were scheduled for implementation, covering about 20% of global greenhouse gases [24].
Many countries have individually determined carbon taxes on goods and consumption that cannot
easily move abroad, such as gasoline for driving one’s car. These taxes are in some cases very high,
like in Sweden of about 1000 SEK/ton or reasonably high like in British Columbia of 40 dollars per ton
(in 2019). In other cases, like India it only amounts to a few dollars per ton.
Not even with carbon cap and trade schemes (such as EU-ETS), will more carbon efficient
production always be better positioned due to oversupply of the emission allowances (given the
uncertainties in the future emissions) and consequently low carbon prices. To limit the competitiveness
effect and prevent carbon leakage in the absence of realistic carbon prices, several instruments have
been proposed. A climate club of more ambitious countries putting up carbon tarrifs against others
has been proposed as a reasonable way forward [25,26]. Border Carbon Adjustments (BCA) have
flooded the political debate in recent years. Although some argue that border carbon adjustments
Energies 2020, 13, 3613 5 of 25

(BCAs) may result in trade wars while having only a very limiting impact on the global climate
gains, other proponents highlight the ability of BCA to enhance the competitiveness of domestic firms,
especially energy-intensive and trade-exposed industries [27]. Imposing border carbon adjustment on
certain goods would then lead to additional costs and make the European market less attractive to a
number of countries given their high energy intensity. A simulation exercise has shown that the total
sales of EU firms (to domestic and foreign consumers) increase if border carbon adjustment (BCA)
measures are implemented as opposed to situation without such measures [28]. On the other hand,
there are some significant re-distributional effects associated with BCAs as changes in the terms-of-trade
against the developing world shift the burden of emissions abatement to developing countries which in
turn further intensifies existing income inequalities [29]. BCAs are also a politically sensitive topic, and
possibly not compatible with World Trade Organization (WTO) rules on free trade [29–32]. Certainly a
uniform carbon tariff or global carbon tax has been discussed as more optimal option—likely to be
compatible with the WTO rules than border carbon adjustment (BCA) tariffs that differentiate between
exporting countries [30], but this first best solution is so far from being realistic to impose that actually
border carbon adjustment is a prominent feature of Europe’s Green Deal, launched by Ursula van der
Leyen in December 2019 [33].
The concept of comparative carbon advantage entails very much the same characteristics as that
of comparative advantage. In a cross-country study of comparative advantage in polluting industries,
Broner and colleagues found that countries with weaker environmental regulation export relatively
more in polluting industries [23]. The authors find the impact of environmental regulations to be
important and comparable in magnitude to traditional sources of comparative advantage such as skill
and capital [23]. Against this, the concept of comparative carbon advantage is a result of the interaction
between industries and the governments yet conditioned upon the availability of factor endowments in
relation to other countries. Importantly the gains from specific factor endowments (such as low-carbon
electricity) are exploited only in conjunction with stringent environmental regulation and national
climate targets.
In the Swedish case the sources of comparative carbon advantage could be summarized as a
dynamic interaction between the legislative forces and industries (stretching for number of decades),
together with the availability of relatively cheap and low-carbon electricity. Effective interaction
between the industry and the government can thus be seen as an important aspect of the comparative
carbon advantage, through for example reduction of the transaction costs. This is because this
interaction precedes the actual firms’ decision on industrial location by establishing the renewable
infrastructure and designing efficiency frameworks, but also at a later stage regulates other further
environmental consequences of the increased concentration of energy intensive sectors (such as
hazardous waste et cetera).
The role of electricity has been especially important in the case of Sweden. Historically, Sweden
has had some of the world’s lowest electricity prices with a bulk of electricity produced in carbon-free
hydropower and nuclear power plants. This has contributed to the competitiveness of Swedish
electricity-intensive industries in an international perspective. Comparative carbon advantage thus
relates to the differences in cross-country carbon efficiency of production. In terms of comparative
carbon advantage, the further electrification of the Swedish industrial production would likely be an
important driver of the increases in the comparative carbon advantage. Other example of a country
which exploits its comparative carbon advantage is Iceland. This small, export-driven economy in the
Atlantic Ocean has access to hydro and geothermal power and has used this specific factor endowment
for aluminum smelting. In fact, in Iceland aluminum smelting accounts for up to 90% of total electricity
consumption. The flow of foreign investments in aluminum smelting was, however, still very much a
result of government negotiations and bargaining starting already during 1960s [34].
Energies 2020, 13, 3613 6 of 25

2.3. Environmental Policy and Competitive Advantage

Commonly, stringent environmental regulation has been perceived as having detrimental
properties on the levels of global competitiveness. Environmental regulations impose costly
adjustments, often leading to slower productivity growth and reduced competitiveness in the
international markets [35]. Forcing companies to adapt to more stringent rules and limit the amount
of negative externalities produced has been perceived as a driver of reduced profits [36]. This has
been a common belief among academics and policy makers until the publication of, what has since
then been referred to Porter’s hypothesis (1991). In the past, Porter not only pioneered the field of
global comparative advantage, but his 1991 contribution to the magazine Scientific American radically
transformed the field. According to Porter, ‘strict environmental regulations do not inevitably hinder
competitive advantage against rivals; indeed, they often enhance it’, yet the evidence remains mixed [37].
In Sweden, assessing the static and dynamic effects of environmental policy on productivity among
industries has led to mixed results [38]. Win-win solutions have been stressed by Lindmark and
Bergquist [39], Bergquist and Söderholm [40] and Bergquist et al. [41], but also efficiency losses
(win-lose) by Broberg et al. [42]. It seems however that regulations generally have had a positive effect
on innovation and efficiency in Sweden [38].
Carbon tariffs are intended to discourage emissions of carbon in foreign-produced goods by
placing additional tariffs on goods imported from mainly unregulated areas (countries delayed in the
adoption of environmental legislation). Among highly regulated countries, carbon tariffs represent
a popular policy instrument as it offers a way to “protect the competitiveness of energy-intensive,
trade-exposed industries” [43].

2.4. Exploiting Carbon Efficiency under Changing Trade Patterns

Optimal resource allocation and its consequences for the global CO2 emissions have been studied
in the past. Fujii and Managi assessed the CO2 emissions reduction potential for 13 manufacturing
sectors in 39 countries between 1995 and 2009. More effective resource reallocation would imply that
firms can relocate their production to countries that are more carbon efficient, which will reduce the
global carbon emissions. Through the application of a Data Envelopment Analysis (DEA) model,
the authors calculate the optimal level of resource reallocation on CO2 emissions and quantify the
potential CO2 savings if production was reallocated to the most efficient countries. This exercise has
shown that applying optimal production resource reallocation has a reduction potential of 2.54 Gt-CO2
in the year 2009. The largest potential to reduce CO2 emissions was then identified in the case of
former communist countries; in sectoral analysis the potential was the largest in basic material industry
including chemical and steel sectors [44].
Shifting trade patterns in order to reduce global carbon emissions was also studied by
Strømman et al. [45]. The authors find that in a global model with tighter carbon constraints,
some production located in carbon intensive economies would move out, as countries lose their
comparative advantage to economies using cleaner fuels and/or more energy efficient technologies.
Clearly, a follow up question arises as to what extent production resources reallocation is realistic
in the global world. This is because any large scale reallocation of a country’s production will have
numerous dynamic effects on the overarching economic structures, in particular social implications
in form of increased unemployment or incomes from corporate taxation [44]. Also, the increased
production concentration in some countries might lead to growth in trade and thus an overall increase
in trade-related CO2 emissions. Last, the study does not include the electricity sector from being
traded, either directly in exports of electricity or indirectly as electricity embodied in the manufacturing
goods. As the empirical results of this paper show, this omission might change the overall results
especially for countries with fossil-fuel based electricity transformation sector, as electricity intensity of
some manufacturing sectors is very high. For example, the production of electronic goods primarily
uses electricity as one important input factors, though in the traditional accounts of carbon intensity
(CO2 emissions/produced unit) related to the actual production of the electricity are not considered.
Energies 2020, 13, 3613 7 of 25

3. Methods and Data

There are two mainstream approaches to account for carbon emissions at a national level.
The production-based account, which is based on emissions within a country’s borders and
the consumption-based account, which holds the final consumers responsible for all upstream
emissions caused by the production of a good regardless of where the emissions occur in the world.
Besides traditional production-based accounts (PBA) and consumption-based (CBA) approaches,
some versions of shared responsibility between producers and consumers have been launched [46–48].
As a result of the continuous expansion of global trade and its impact on the global carbon emission levels,
researchers have ventured into integrating carbon emission transfers into the actual policy-making [49].
However, the current UN emission scheme remains confined to only those emissions which were
incurred during the production process within a country (production-based accounts: PBA) [50].

3.1. Consumption-Based Approaches

Although there have been heated debates around the need for new measures of national carbon
accounting which would take into account the country’s actual consumption pattern (CBA), climate
negotiations targets remain set to production-based accounting methods (PBA). The major drawback
of the production-based (PBA) perspective is the fact that it encourages displacement or carbon leakage
as countries simply relocate part of their production abroad. At the same time, countries producing
export goods are being penalized for doing so [51]. Additionally, as empirical evidence has shown,
this relocation of carbon-intensive production to the often emerging economies can lead to even
larger emissions, as developing countries are more likely to lack the more energy and carbon efficient
technologies of the developed world. This difference in energy and carbon intensity between countries
does not only raise the global carbon emissions, but also penalizes countries with ‘cleaner’ production
and stricter environmental regulation [48].

3.1.1. Shared Responsibility Addressing the Blind Spot of Export Technologies

The method employed in this paper departs from the consumption-based approach (CBA) of
carbon accounting but addresses the weakness it contains: the blind spot of export technologies which
countries clearly can take responsibility for. According to traditional consumption-based method
(CBA), countries should not only be responsible for the emissions of their domestic production but
also for the emissions embodied in imports which are then consumed domestically. But they do not
need to take any responsibility for their export technologies. The introduction of consumption-based
(CBA) approach was largely due to the fact that policy makers and academics became concerned about
the absolute improvements in domestic carbon emissions and were puzzled to what degree these
domestic improvements are due to carbon leakage to other countries. The basic formula of the CBA
approach thus considers the flow of CO2 emissions which are finally consumed within a country and
is a sum of territorial emissions or PBA (production-based emissions) and emissions embodied in
imports, from which emissions embodied in exports are deducted:
X X X
CBAS = fsi + qri , xrs
i − qsi , xsr
i (1)
i i,r,s i,r,s

where fsi refers to direct emissions, q is an emissions multiplier, , is elementwise multiplication, xsr
i
is
the output from production sector i in country s that is produced for final consumption in country r.
The emissions multiplier is then calculated simply by dividing the direct emissions with total
output allocated amongst all final consumers for the relevant sector as shown in Equation (2). According
to Equation (2), y is defined as a collection of final demand bundles and L is the classical Leontief
−1
inverse, L = (I − Zk̂−1 ) , where I is the identity matrix, Z is a multi-region input-output table of
Energies 2020, 13, 3613 8 of 25

economic flows between countries and sectors, k̂ is the diagonal of k, and ki records gross output of
sector i.
fs fs
qsi = P i sr = P i st tr (2)
r xi j,t Lij y j

The major advantage of this approach is the fact that countries are now also made accountable for
the emissions embodied in the importation of goods which are then consumed domestically. Obviously,
this is a very valid concept which shifts responsibility onto the final consumer. Consumption can
then be seen as one of the potential factors which nations can influence, either through changes in
absolute volumes or its composition. However, as [48] has shown, although the consumption-based
(CBA) concept captures the changes in domestic consumption which a nation can influence, it does
not capture a country’s efforts to improve its domestic carbon efficiency for exports (only efficiency
improvements that relate to domestic consumption). In the CBA concept, thus, two countries trading
identical product (let’s say one ton of steel) may look entirely different in the balance of emissions in
trade. Sweden, an example of energy efficient low-carbon economy produces one ton of steel with
considerably lower CO2 emissions than for example China. If those two countries, Sweden and China,
only trade in one specific good and exchange equal amounts of steel, Sweden becomes a net carbon
importer while China will be a net carbon exporter. In this respect, energy and carbon efficient Sweden
would be penalized for exporting its carbon efficient steel as its CBA carbon balance would be larger
than its PBA emissions (and conversely for China where responsibility for inefficient carbon-intensive
steel production was shifted onto Sweden). Therefore, Kander et al. [48] developed an adjustment
to the traditional CBA accounting of emissions to accommodate for technology differences between
countries. In the adjusted CBA framework (the technologically adjusted CBA or TCBA), the emissions
multiplier is calculated using the world average technology instead of the specific carbon intensity of
the domestic production (for a more elaborate discussion of the method see Supplementary Information
of Kander et al. [48]):
net trade balance
z }| {
X X X .r
s
TCBA = fis + qri xrs
i− qi xsr
i (3)
f i,r,s i,r,s
| {z } | {z }
imports exports
P s sr
. s,r,s qi ,xi
where the emissions multiplier is calculated by the expression qi = P sr .
s,r,s xi
The use of world average technology (and thus world average emissions) can be understood
as emissions which would have occurred if the traded good was not produced in a specific country.
For countries like Sweden which have an efficient and low-carbon production the amount of emissions
embodied in exports would therefore increase (as world average carbon intensity is higher than Swedish
carbon intensity). Higher volumes of emissions in exports would then, following the Equation (4),
lead to lower balance of TCBA. Conversely, for countries with polluting production (more than the
world average), the level of TCBA would then increase.
The difference between the newly computed TCBA and the traditional CBA approach has been
named NEGA emissions [48]:
NEGAsi = CBAsi − TCBAsi (4)

NEGA is a measure of global emissions that have not occurred as a result of production being
located in a less, instead of a more, carbon-intensive country. NEGA emissions can be both positive
(credits) when production is located in countries with better than world-average technology, as well
as negative (penalties). Negative NEGA emissions are extra emissions generated because of the
production being located in countries with worse than average technology. These EXTRA emissions are
than penalties that can be assigned to the respective countries for having either inefficient production or
fossil-fuel dependent energy system or both. In the above mentioned comparison of Sweden and China,
Swedish technology-adjusted carbon accounts (TCBA) would be lower than its consumption-based
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Energies 2020, 13,

production or 3613
fossil‐fuel dependent energy system or both. In the above mentioned comparison 9 ofof
25
Sweden and China, Swedish technology‐adjusted carbon accounts (TCBA) would be lower than its
consumption‐based accounts (CBA) and Sweden would receive NEGA credits (a ‘reward’ for having
accounts (CBA) and Sweden would receive NEGA credits (a ‘reward’ for having a better than world
a better than world average carbon efficiency in the production of steel). China, on the other hand,
average carbon efficiency in the production of steel). China, on the other hand, would be held
would be held responsible for its carbon intensive production of steel for exports (more carbon
responsible for its carbon intensive production of steel for exports (more carbon intensive than the
intensive than the world average) and its technology‐adjusted consumption accounts (TCBA) would
world average) and its technology-adjusted consumption accounts (TCBA) would be higher than the
be higher than the traditional consumption‐based (CBA) approach. China would therefore receive
traditional consumption-based (CBA) approach. China would therefore receive EXTRA emissions
EXTRA emissions compared to CBA approach, a penalty for not cleaning up its export sector.
compared to CBA approach, a penalty for not cleaning up its export sector. Importantly, to avoid
Importantly, to avoid double calculation of international trade, imports are treated differently than
double calculation of international trade, imports are treated differently than exports. As in the
exports. As in the conventional consumption‐based (CBA) approach, countries must take full
conventional consumption-based (CBA) approach, countries must take full responsibility for all the
responsibility for all the emissions related to their imports. But countries only take responsibility for
emissions related to their imports. But countries only take responsibility for carbon intensities of
carbon intensities of their export industries in relation to similar industries in the world, so in the
their export industries in relation to similar industries in the world, so in the technology-adjusted
technology‐adjusted consumption accounts (TCBA) model the sum of all NEGA credits and EXTRA
consumption accounts (TCBA) model the sum of all NEGA credits and EXTRA penalties at a global
penalties at a global scale equals 0, and the sum of all nations’ consumption‐based accounts (CBA)
scale equals 0, and the sum of all nations’ consumption-based accounts (CBA) equals a sum of all
equals a sum of all nations’ technology‐adjusted consumption based accounts (TCBA). This is an
nations’ technology-adjusted consumption based accounts (TCBA). This is an important criterium
important criterium and the method does not change the volume of global CO2 emissions, but instead
and the method does not change the volume of global CO2 emissions, but instead redistributes the
redistributes the NEGA credits and EXTRA penalties geographically. Figure 1 shows visually the
NEGA credits and EXTRA penalties geographically. Figure 1 shows visually the results of the new
results of the new technology‐adjusted carbon footprints for Sweden.
technology-adjusted carbon footprints for Sweden.

Figure 1. Technology-adjusted CO2 footprints (TCBA) of Sweden and China compared to national
Figure 1. Technology‐adjusted
territorial CO2 footprints
emissions (or production-based (TCBA)
account: of Sweden
PBA) and nationaland China
carbon compared
footprints to national
(or consumption-
territorial emissions (or production‐based account:
based accounts: CBA). Note: million tons CO2 emissions. PBA) and national carbon footprints (or
consumption‐based accounts: CBA). Note: million tons CO2 emissions.
In the case of Sweden, the difference between consumption-based accounts (CBA) and
In the case of consumption
technology-adjusted Sweden, theaccounts
difference between
(TCBA) consumption‐based
is positive and Sweden thusaccounts
has NEGA (CBA)
creditsand
for
technology‐adjusted
its relatively efficient consumption
production. Inaccounts (TCBA)
other words, theisamount
positiveof and Swedencredits
the NEGA thus has NEGA credits
corresponds to the
for its relatively
amount efficient
of emissions production.
which In other
did not occur words,
owing to thethe amount
Swedish of the NEGAmore
comparatively credits corresponds
climate-efficient
to the amount of emissions which did not occur owing to the Swedish comparatively
exports. It is a theoretical assumption with the same global demand as in reality, but since Sweden more climate‐
did
efficient
not produceexports. It is a theoretical
the exported goods, theassumption
same volumewithofthe same
goods globalbedemand
would produced as elsewhere.
in reality, but since
Since we
Sweden
cannot know did not produce
where it wouldthe take
exported
place, goods, the sameisvolume
the assumption that anyofexporter
goods would be produced
on the world market
elsewhere.
might replace Since we cannot
Sweden, know
and this where itparty
unknown would take place, the
is represented assumption
by the is that any
use of a weighted exporter
world on
average
the world market
technology for eachmight
sector.replace Sweden, and this unknown party is represented by the use of a
weighted world average technology for each sector.
3.1.2. NEGA Credits with Electricity
3.1.2. AnNEGA Credits
initial with Electricity
investigation into the sectoral composition of NEGA credits in Swedish exports, however,
assigns
An the largest
initial contributioninto
investigation to the
theelectricity
sectoral transformation
composition ofsector.
NEGA This is because
credits electricity
in Swedish sector
exports,
is treated assigns
however, as any other productive
the largest sector, though
contribution to the much of itstransformation
electricity production is channeled
sector. Thisfurther in the
is because
production
electricity of final
sector goods/exports.
is treated as any other productive sector, though much of its production is channeled
furtherWithin
in thea production
traditional input-output (I-O) framework, the largest share of improvements in electricity
of final goods/exports.
generation
Withinisaassigned to theinput‐output
traditional utilities sector. Thisframework,
(I‐O) is because electricity assigned
the largest sharetoofother sectors such in
improvements as
paper andgeneration
electricity pulp or iron is and steel only
assigned to theincludes
utilitiesdirect emissions,
sector. whereaselectricity
This is because emissionsassigned
embodied in the
to other
actual electricity
sectors such as papergeneration
and pulp (theorindirect
iron and emissions)
steel onlyare allocated
includes to the
direct electricity
emissions, generation
whereas sector.
emissions
As a result, efficiency gains in electricity generation are visible primarily in the utilities sector while
economy needed to remain equal after redistributing emissions to the final consuming sectors.
To capture the real contribution of Swedish low‐carbon electricity generation, the NEGA credits
from the electricity production sector were redistributed to the respective productive sectors
following:
𝑁𝐸𝐺𝐴 𝑁𝐸𝐺𝐴 ∑ , 𝑁𝐸𝐺𝐴 𝑥 (5)
Energies 2020, 13, 3613 10 of 25

Wherefrom
gains 𝑁𝐸𝐺𝐴 is the use
electricity previously defined measure
in the manufacturing of global
sectors emissions
and others remainthat have not This
understated. occurred
may asbe aa
result of production
problematic assumptionbeing
whenrelocated to a less,
quantifying instead
gains of a more,consumption
from electricity carbon‐intensive country
in the Swedishand which
industry
are the
and sum of the
its exports; alsodirect NEGA emissions
as discussions about thewhich occurred
increased at the individual
electrification productive
of industrial sector
processes and
emerge
thea secondary
as 𝑁𝐸𝐺𝐴 reduction
potential emissions emissionstoolwhich
[20]. Toareaddress
a resultthisofissue,
the Swedish carbon‐free
indirect emissions electricity
of electricity
production were
generation and which are assigned
redistributed to the
to each specificsector
economic consuming
in ordersectors. Overall
to capture theNEGA emissions,
combined be it
emissions
from direct primary energy sectoral consumption as well as from the electricity
of each sector (see Figure 2). Simultaneously, the same proportion of carbon was deducted from sectors can be both
positive
the (credits)
electricity as well as
generated as total
negative (penalties)
emissions of thedepending on the specifics
Swedish economy neededoftothe national
remain equalenergy
after
system.
redistributing emissions to the final consuming sectors.

Figure 2. Re-distributing emissions from the utilities sector to the productive sectors (an illustrative
example based European Energy Agency data).

To capture the real contribution of Swedish low-carbon electricity generation, the NEGA credits
from the electricity production sector were redistributed to the respective productive sectors following:
X .
NEGAsi = NEGAsi + NEGArelect , xrs
i (5)
i,r,s

where NEGAsi is the previously defined measure of global emissions that have not occurred as a result
of production being relocated to a less, instead of a more, carbon-intensive country and which are
the sum of the direct NEGA emissions which occurred at the individual productive sector and the
secondary NEGArelect emissions which are a result of the Swedish carbon-free electricity production
and which are assigned to the specific consuming sectors. Overall NEGA emissions, be it from direct
Energies 2020, 13, 3613 11 of 25

primary energy sectoral consumption as well as from the electricity sectors can be both positive (credits)
as well as negative (penalties) depending on the specifics of the national energy system.
The reallocation of the NEGA credits from the electricity transformation sector to the productive
sectors had two major consequences (see Figure 2 that visualizes the process of reallocation):

(1) The volume of the NEGA credits from the electricity generating sector decreased substantially.
The remaining NEGA credits which can still be seen reported are NEGA credits embodied in
the direct exports of electricity, so only foreign sales of Swedish produced electricity (here the
final product is the electricity, and not a product with embodied electricity as is the case for the
remaining sectors).
(2) On the other hand, other productive sectors increased their absolute volumes of NEGA credits,
which is a sum of NEGA credits stemming from the primary energy consumption and the NEGA
credits from the outsourced/purchased in electricity (electricity derived NEGA credits).

4. Results

4.1. Total NEGA Emissions Saved

Within the whole period of 1995–2009, the amount of emissions saved reached a cumulative
total of nearly 590 million tons of CO2 , emissions that would have been otherwise released into the
atmosphere if the same amount of production occurred using the world average technology instead
of the specific Swedish production system. This cumulative total is a sum of annual NEGA credits
(or emissions saved) as visualized in Figure 3. On average, Sweden has saved 39.2 million tons of
CO2 emissions each year between 1995 and 2009 with the year 2008 recording the absolute highest
levels of over 46 million tons of CO2 emissions. To put this into perspective, the cumulative volume of
590 million tons of CO2 (which were prevented between 1995 and 2009) can be compared to the total
CO2 emissions of EU28 in 2018 which was over 3460 million tons of CO2 , so roughly 17% of the yearly
total. This represents a relatively high share considering the fact that Swedish economy accounts for
roughly 3% of the European GDP (Eurostat, 2019). Figure 3 shows the annual developments in total
NEGA credits and the share of which that can be attributed to the Swedish carbon-free electricity
embodied in produced goods. The decline in the total amount of NEGA credits in 2009 is entirely
due to the drop of volumes of Swedish exports as a result of the global financial crisis. The growth of
annual NEGA emissions between 1995 and 2008 has been then primarily driven by the increase in
export volumes [52]. Overall, the volumes of exports have been increasing but accelerated especially
after 2002 with 2008 being one of the record years for Swedish exports. The year 2009 brought about
disruptions to the volumes of Swedish exports due to the international financial crisis and this is also a
major reason for why we have omitted this year from certain parts of the analysis.

4.2. Comparative Carbon Advantage in an International Perspective

Figure 4 illustrates how Sweden compares to other countries in respect to total NEGA credits and
the contribution of the electricity sector to the total NEGA credits. Negative signs for certain countries
can be interpreted as NEGA penalties, where respective countries exported goods manufactured with
worse than world average technology. Within the concept of NEGA credits, countries can thus be
penalized for not having carbon efficient production and this is then reflected in the negative values
for the obtained NEGA credits.
 Energies 2020, 13, x FOR PEER REVIEW 12 of 27

Energies 2020, 13, 3613 12 of 25

50,000,000

40,000,000

ton CO2 30,000,000

20,000,000
Energies 2020, 13, x FOR PEER REVIEW 13 of 27

10,000,000
throughout the period of study, which can be seen from the constantly negative NEGA credits. The
contribution of the carbon‐intensive
0 electricity production to this negative trend in China is relatively
high and averages at 50% of the total
1995 1996 1997 EXTRA penalties. In the USA, on the other hand, a period of
1998 1999
positive NEGA credits can be seen between 2000 19982001
and2002
20042003
which
2004 is likely
2005 a result of fuel‐switching
2006 2007 2008
from coal to gas; however, a more thorough sectoral decomposition would be needed 2009 to explain this
sudden and short‐lived increase. Otherwise, the pattern of development of the NEGA emissions for
Electricity NEGA credits Total NEGA credits
the USA identifies carbon efficiency of its exports below the world average level as was in case of
China.3.InNEGA
Figure the USA,
creditsthis negative
in the Swedishtrend is further
exports accentuated
(total NEGA) and ofby substantial
which embodied NEGA
NEGA penalties
credits
originating in
from electricitythe electricity
consumption
Figure 3. NEGA sector after
credits in(electricity
the Swedish2007.
NEGA).
exports (total NEGA) and of which embodied NEGA credits
from electricity consumption (electricity NEGA).

4.2. Comparative Carbon Advantage in an International Perspective

Figure 4 illustrates how Sweden compares to other countries in respect to total NEGA credits
and the contribution of the electricity sector to the total NEGA credits. Negative signs for certain
countries can be interpreted as NEGA penalties, where respective countries exported goods
manufactured with worse than world average technology. Within the concept of NEGA credits,
countries can thus be penalized for not having carbon efficient production and this is then reflected
in the negative values for the obtained NEGA credits.
Generally, in line with previous research [6,48] European countries have on average more carbon
efficient production and this can be seen in the relative surplus of NEGA credits. On the other hands,
countries differ to what extent these NEGA credits can be attributed to low‐carbon electricity
production. Sweden has, for example a relatively significant proportion of NEGA credits in exports
due to its specific electricity production system (between 26 and 28% of all total NEGA credits in
1995–2009). Denmark and Germany, on the other hand also generate NEGA credits but less so due
to their higher carbon emitting electricity sectors. The share of electricity in the total NEGA credits
was on average 11% in Denmark and 21% in the EU throughout the period of study. One exception
is the year 2008, where temporarily electricity’s contribution to the total NEGA emissions increased
to over 50%, both driven by drastic decline in NEGA credits from primary energy consumption and
an increase in electricity NEGA credits. For a full understanding of this deviation, however, a more
thorough sectoral decomposition would be required.
The Czech Republic illustrates an interesting example of how legislative changes can alter the
development. While the country has always been a net exporter of embodied energy, the relatively
high carbon intensity (at least compared to the world average) led to EXTRA penalties well into 2002
[53]. The newly acquired membership of the EU with its legislative pressures on efficiency
improvements and the further expansion of volumes of the Czech exports, led to an increase in the
absolute levels of NEGA credits. This transition from EXTRA penalties to NEGA credits of the Czech
exports was also driven by the declining share of coal‐fired electricity production. Between 1995 and
2009, the share of coal in electricity generation in the Czech Republic declined from 74 to 59%.
China and the USA represent counterparts to much of the European countries. China, as Figure
4 illustrates, had on the whole carbon efficiency of its exports below the world average level

Figure 4. NEGA credits in exports (total NEGA) and embodied NEGA credits from electricity
Figure 4. (electricity
consumption NEGA credits in exports
NEGA) (total NEGA)perspective,
in a comparative and embodiedin NEGA
M tonscredits
of COfrom electricity
2 emissions. Note:
consumption (electricity NEGA) in a comparative perspective, in M tons of CO2 emissions. Note:
Negative NEGA credits correspond to ‘penalties’ for having worse than world average carbon efficiency.
Negative NEGA credits correspond to ‘penalties’ for having worse than world average carbon
The scale of the y-axis differs by country.
efficiency. The scale of the y‐axis differs by country.

4.3. Sectoral Differences

Throughout the period of study, Sweden had a comparative carbon advantage in majority of its
export sectors, both before the credits from the electricity generation were redistributed but also
including electricity credits. Figure 5 below summarizes the development in comparative carbon
Energies 2020, 13, 3613 13 of 25

Generally, in line with previous research [6,48] European countries have on average more carbon
efficient production and this can be seen in the relative surplus of NEGA credits. On the other
hands, countries differ to what extent these NEGA credits can be attributed to low-carbon electricity
production. Sweden has, for example a relatively significant proportion of NEGA credits in exports
due to its specific electricity production system (between 26 and 28% of all total NEGA credits in
1995–2009). Denmark and Germany, on the other hand also generate NEGA credits but less so due
to their higher carbon emitting electricity sectors. The share of electricity in the total NEGA credits
was on average 11% in Denmark and 21% in the EU throughout the period of study. One exception
is the year 2008, where temporarily electricity’s contribution to the total NEGA emissions increased
to over 50%, both driven by drastic decline in NEGA credits from primary energy consumption and
an increase in electricity NEGA credits. For a full understanding of this deviation, however, a more
thorough sectoral decomposition would be required.
The Czech Republic illustrates an interesting example of how legislative changes can alter the
development. While the country has always been a net exporter of embodied energy, the relatively high
carbon intensity (at least compared to the world average) led to EXTRA penalties well into 2002 [53].
The newly acquired membership of the EU with its legislative pressures on efficiency improvements
and the further expansion of volumes of the Czech exports, led to an increase in the absolute levels of
NEGA credits. This transition from EXTRA penalties to NEGA credits of the Czech exports was also
driven by the declining share of coal-fired electricity production. Between 1995 and 2009, the share of
coal in electricity generation in the Czech Republic declined from 74 to 59%.
China and the USA represent counterparts to much of the European countries. China, as Figure 4
illustrates, had on the whole carbon efficiency of its exports below the world average level throughout
the period of study, which can be seen from the constantly negative NEGA credits. The contribution
of the carbon-intensive electricity production to this negative trend in China is relatively high and
averages at 50% of the total EXTRA penalties. In the USA, on the other hand, a period of positive
NEGA credits can be seen between 1998 and 2004 which is likely a result of fuel-switching from coal
to gas; however, a more thorough sectoral decomposition would be needed to explain this sudden
and short-lived increase. Otherwise, the pattern of development of the NEGA emissions for the USA
identifies carbon efficiency of its exports below the world average level as was in case of China. In the
USA, this negative trend is further accentuated by substantial NEGA penalties originating in the
electricity sector after 2007.

4.3. Sectoral Differences

Throughout the period of study, Sweden had a comparative carbon advantage in majority of
its export sectors, both before the credits from the electricity generation were redistributed but also
including electricity credits. Figure 5 below summarizes the development in comparative carbon
advantage of Swedish export sectors relative to the world average in 2008. Of the total 35 productive
exports including in our dataset, Sweden had a comparative carbon advantage in 31 of them. The sectors
where Sweden scored below the world average were the agriculture, construction, water transport and
sale, maintenance and repair of motor vehicles. Overall, throughout the full period of study, Sweden
had a comparative carbon advantage in a vast majority of its export sectors. This means that exports
from these 31+ sectors actively contributed to increased global ‘welfare’ as they reduced the global
carbon emissions. Should the same volumes of goods be produced elsewhere using world average
technology, the total stock of carbon emissions would increase at a faster pace.
sectors where Sweden scored below the world average were the agriculture, construction, water
transport and sale, maintenance and repair of motor vehicles. Overall, throughout the full period of
study, Sweden had a comparative carbon advantage in a vast majority of its export sectors. This
means that exports from these 31+ sectors actively contributed to increased global ‘welfare’ as they
reduced
Energies the13,global
2020, 3613 carbon emissions. Should the same volumes of goods be produced elsewhere
14 of 25
using world average technology, the total stock of carbon emissions would increase at a faster pace.

Agriculture, Hunting, Forestry and Fishing

Mining and Quarrying
Food, Beverages and Tobacco
Textiles and Textile Products
Leather, Leather and Footwear
Wood and Products of Wood and Cork
Pulp, Paper, Paper , Printing and Publishing
Coke, Refined Petroleum and Nuclear Fuel
Chemicals and Chemical Products
Rubber and Plastics
Other Non‐Metallic Mineral
Basic Metals and Fabricated Metal
Machinery, Nec
Electrical and Optical Equipment
Transport Equipment
Manufacturing, Nec; Recycling
3693
Electricity, Gas and Water Supply
Construction
Sale, Maintenance and Repair of Motor Vehicles…
Wholesale Trade and Commission Trade, Except of…
Retail Trade, Except of Motor Vehicles and…
Hotels and Restaurants
Inland Transport
Water Transport
Air Transport
Other Supporting and Auxiliary Transport…
Post and Telecommunications
Financial Intermediation
Real Estate Activities
Renting of M&Eq and Other Business Activities
Public Admin and Defence; Compulsory Social…
Education
Health and Social Work
Other Community, Social and Personal Services
Private Households with Employed Persons

0 200 400 600 800 1000 1200 1400

World average carbon intensity Swedish carbon intensity

Figure
Figure 5.
5. Swedish
Swedish carbon
carbon intensity
intensity (CO2/$
(CO2 /$ of
of production, in green)
production, in green) v.
v. world
world average
average (grey)
(grey) in
in 2008.
2008.

What isisimportant,
important,however,
however,is to
is assess the relative
to assess development
the relative whenwhen
development compared to the world‐
compared to the
average. Are thereAre
world-average. sectors
therewhose comparative
sectors carbon advantage
whose comparative carbon further improved
advantage or deteriorated?
further improved or
Does Sweden’sDoes
deteriorated? overall comparative
Sweden’s overallcarbon advantage
comparative improve
carbon or is the
advantage rest of the
improve or isworld catching‐
the rest of the
world catching-up? To illustrate the dynamics of the development in carbon intensity of the Swedish
production compared to the rest of the world, a visualization of the average annual changes (in %) in
the sectoral carbon intensity for Sweden and for the world average can be seen in Figure 6. The grey
shaded area of the graph shows sectors that on average increased its carbon intensity compared to the
world average between 1995 and 2009 (an outcome less desired), while the rest of the area captures all
sectors which lowered its carbon intensity during the period of study. On the positive side it can be
Energies 2020, 13, 3613 15 of 25

seen that for the world average the average annual rate of change in carbon intensity was negative, thus
indicating a decline in carbon intensity. Also, the average rate of change in carbon intensity of world
exports was substantial at nearly 7% decline annually within the period of study. On the other hand,
a more thorough inspection of the Swedish developments shows some less desirable developments.
First, five Swedish export sectors increased its carbon intensity (compared to the world average where,
in fact, no export sector recorded an increase in carbon intensity). Second, the average rate of decline in
carbon intensity was somewhat slower and below that of the world average at 4% annually. This does
not imply that Swedish carbon efficiency in exports is deteriorating, but this rather illustrates that the
rest of the world is catching up (especially, as majority of world export sectors is improving faster).
Of the absolute total of 590 million tons of CO2 saved (as NEGA credits), the Swedish exports of
steel accounted for the largest share with a contribution at nearly 19% of total NEGA credits generated
between 1995 and 2009 (this is including primary energy combustion as well as electricity embodied
in final produce). The other important sectors were the chemicals (12% of the total of cumulative
NEGA credits), pulp and paper (7.1%) and electricity (8%) (Table 1). Here electricity relates only to
exports of electricity where electricity is the final product and not electricity embodied in exports
of other goods. To focus more on the five sectors which accounted for the largest share of Swedish
NEGA credits between 1995 and 2009, the picture draws more positive findings though. For four of
the sectors (basic metals, paper and pulp, transport equipment, and machinery) the annual rate of
change in carbon intensity decline was relatively fast in Sweden, somehow on par with the rest of the
world (see preceding Figure 6). This would imply that although rest of the world is catching up in
terms of carbon efficiency, Sweden continues to improve the carbon efficiency of its production and
exports in a similar pace. This is a rather remarkable development taking into account that efficiency
improvements become progressively exhausted and given the already initially low carbon intensity
of Swedish production in mid-1990s. Obviously, the rest of the world has far more space to exploit
existing efficiency enhancements and the rate of decline can often be very rapid. Only one sector,
the chemicals, recorded far slower rate of decline in carbon intensity in Sweden than the rest of the
world. This implies that the rest of the world was more successful in catching up, though the carbon
intensity is still far higher than in Sweden even by 2009. One issue that could potentially effect this
development is the difference in the composition of the output of the chemical sector between Sweden
and the rest of the world. Much of the Swedish exports of chemicals constituted of pharmaceuticals
(high in value), while the rest of the world produced particularly bulk chemicals such as acids (low in
value and with substantial potential for economies of scale).
Electricity derived NEGA credits (electricity embodied in exported goods) accounted for a
total of 26–28% of Swedish NEGA credits. The sectoral distribution of the electricity NEGA credits
differed substantially across each productive sector and had various impacts on the total volume of
electricity NEGA credits (see Table 1 for benchmark years and Figure 7 for visualization of the annual
development). Table 1 reports the results of the relative contribution of electricity derived NEGA credits
to the total sectoral NEGA credits. The contribution of low-carbon electricity in basic metals (19%) is,
for example, far more limited than in the paper and pulp sector (70%), due to the sector’s dependence
on coke, a coal-based reduction agent. Traditionally coke has been used as a reduction agent in the
production of pig iron from iron ore [52] and is a necessary production input without, at the moment,
any potential substitute (recently, research effort has been concentrated into carbon-free substitutes as a
reduction agent. In June 2017, a new joint-venture formed by SSAB, LKAB and Vattenfall was created
to continue to drive the research into fossil-free steel. The three companies will attempt to develop a
steelmaking process that emits water instead of carbon). A more detailed analysis of the major sectors
and the contribution of low-carbon electricity in generating a comparative carbon advantage in the
world market are discussed in the next subsection.
Energies 2020, 13, 3613 16 of 25
Energies 2020, 13, x FOR PEER REVIEW 16 of 27

Figure 6. Average
Figure annual
6. Average rate
annual (%)(%)
rate of of
change
change(compound
(compoundannual
annualgrowth
growth rate) in
in sectoral
sectoralcarbon
carbonintensity
intensity(tons
(tons
of of CO2 /$exports)
CO2/$exports) in Sweden
in Sweden andand the world
the world average.
average.
Note: grey shaded circle indicates sectors that experienced an increase in carbon intensity throughout the period 1995–2009. All of these 5 sectors are productive
Note: grey shaded circle indicates sectors that experienced an increase in carbon intensity throughout the period 1995–2009. All of these 5 sectors are productive
sectors
sectors of the
of the Swedish
Swedish economy.
economy.
Energies 2020, 13, 3613 17 of 25

Table 1. The sectoral dependence on low-carbon electricity in total NEGA credits (relative share of electricity NEGA credits in total sectoral NEGA credits).
Note: Selected sectors only. Exports (%) relates to percentage share of total Swedish exports in respective year (measures in monetary values).

Of Which Electricity Electricity Electricity

Total Cumulative
Electricity Credits (% Credits (% Credits (%
NEGA Credits Exports (%) Exports (%) Exports (%)
Derived NEGA Sectoral Sectoral Sectoral
(Tons CO2 )
Credits NEGA) NEGA) NEGA)
Pulp, Paper, Paper, Printing and Publishing 42,900,000 30,022,000 70% 10% 74% 9% 67% 7%
Transport Equipment 14,980,000 8,173,000 61% 15% 58% 13% 54% 12%
Machinery, Nec 15,296,000 6,526,000 45% 12% 40% 11% 42% 11%
Wholesale Trade and Commission Trade,
10,536,000 4,417,000 45% 2% 46% 2% 39% 3%
Except of Motor Vehicles and Motorcycles
Wood and Products of Wood and Cork 12,748,000 5,416,000 45% 4% 41% 3% 47% 2%
Electrical and Optical Equipment 19,695,000 5,859,000 31% 13% 27% 14% 35% 11%
Renting of M&Eq and Other Business Activities 16,774,000 5,406,000 31% 5% 30% 9% 37% 10%
Textiles and Textile Products 2,684,000 1,022,800 30% 1% 39% 1% 40% 1%
Retail Trade, Except of Motor Vehicles and
9,665,000 3,801,000 27% 1% 29% 1% 50% 2%
Motorcycles; Repair of Household Goods
Basic Metals and Fabricated Metal 109,750,000 19,010,000 19% 9% 18% 8% 19% 9%
Chemicals and Chemical Products 71,340,000 12,610,000 17% 8% 17% 9% 21% 8%
Rubber and Plastics 17,454,000 2,859,000 16% 2% 14% 2% 21% 2%
Other Non-Metallic Mineral 17,283,000 1,800,000 15% 1% 13% 1% 7% 1%
Manufacturing, Nec; Recycling 20,567,000 2,194,000 13% 2% 8% 2% 11% 2%
Coke, Refined Petroleum and Nuclear Fuel 25,554,000 2,058,000 8% 2% 7% 2% 9% 5%
Others 181,379,580 14% 15% 16%
Total 588,605,580 27% 100% 26% 100% 28% 100%
 Energies 2020, 13, x FOR PEER REVIEW 20 of 27

industrial output as well as exports, the engineering sector accounts for relatively high share of
industrial
Energies 2020, 13, energy
3613 use (and also the NEGA credits). 18 of 25

Figure 7. Total NEGA credits in the exports of the Swedish manufacturing sectors, of which NEGA
Figure
credits 7. Total
derived fromNEGA credits in the
the electricity exports of the
consumption (inSwedish
tons of manufacturing
CO2 ). sectors, of which NEGA
credits derived from the electricity consumption (in tons of CO2).
The Swedish paper and pulp sector has undergone a substantial transformation in terms of energy
efficiency after being hit by the oil crisis in 1973. This has led to reductions in the sectoral consumption
of oil and increased deployment of electricity [54]. The shift towards mechanical pulp production
(as opposed to the traditional Kraft pulp production in other producing countries) led to increased
electricity intensity of sector. Mechanical pulp production allowed for increases in the wood yield and
further refining of the pulp, which over time required increased electricity use [54]. The paper and
pulp sector accounted, in relative as well as absolute terms, for the largest share of NEGA credits from
low-carbon electricity production.
Overall, 21% of all NEGA credits from the electricity sector were embodied in the exports of paper
and pulp sector. The sector’s electricity intensity was also one of the highest as more than 70 % of
absolute sectoral NEGA credits could be traced back to the deployment of the low carbon electricity.
The share of the sector in the volume of Swedish exports was also relatively high, though it diminished
Energies 2020, 13, 3613 19 of 25

from 10 to 7% between 1995 and 2008. Consequently, this decline in the export share has also led to
declines in the relative shares of the electricity NEGA credits of the sector from 21% in 1995 to 18%
in 2008. Despite that, however, the Swedish paper and pulp sector remains the largest supplier of
embodied NEGA credits from the electricity sector. Given the high share of electricity NEGA credits
and its importance for the Swedish exports, the paper and pulp sector thus represents one of the largest
potential contributors for further exploitation of the comparative carbon advantage of the Swedish
electricity. The sector accounted for a total of 42.9 million tons of CO2 NEGA credits accumulated over
a period of 1995 to 2009, which corresponds to more than 7% of all Swedish NEGA credits and 20% of
all electricity NEGA credits. These are virtually emissions which have been saved globally by having
the paper and pulp production located in Sweden and utilizing Swedish low-carbon electricity.
Figure 7 illustrates the large share of electricity derived NEGA credits in the absolute levels of
NEGA credits from the pulp and paper exports, and their development between 1995 and 2009, as
well as for other significant sectors. The increase in the absolute volume of NEGA credits from the
sector was driven by the increase of the volumes exported (in monetary terms), though this was to
some extent offset by the decline in the NEGA credits per output (M ton CO2 /bil. USD). While in 1995,
one million of USD of paper and pulp exports generated 290 tons of CO2 credits, this has declined to
less than 230 tons of CO2 saved on the global market by 2008. This change in the relative contribution
of the Swedish NEGA export intensity does not necessarily mean that Swedish paper and pulp’s
efficiency is deteriorating. Rather, it implies that the state of the world average technology is improving
at a faster rate than that of Sweden.
The relative contribution of low-carbon electricity for the basic metals sector was one of the lowest
among other manufacturing sectors. This is almost entirely due to the production specifics of the sector
where the potential use of electricity is currently relatively low. Much of the NEGA credits generated
by the sector (and those are indeed substantial) are a result of efficient production process compared
to the world average. At the same time the low utilization of electricity in the sector represents one
of the largest and most substantial potentials in further increasing the Swedish NEGA credits—and
that is through increased electrification of the sector. Swedish Energy Agency is therefore investing
heavily in project of carbon-free electricity where hydrogen (produced with the use of Swedish low
carbon electricity) is used as a reduction agent. Clearly, if the results of the project prove its feasibility,
this would be a path-breaking development having a huge impact on the absolute levels of Swedish
carbon emissions (in Sweden, 20% of emissions embodied in Swedish exports are not energy-related
but rather a result of industrial processes, in particular in the steel and cement industry).
The chemical sector is the third largest user of industrial energy in Sweden, accounting for a total
of 9% of industrial energy use. Here, electricity is used mainly for electrolysis processes and any further
electrification of the sector is conditioned by the type of output produced. Overall, the contribution of
low carbon electricity to total NEGA credits was relatively low at around 9% in 2008. The sector is,
as the iron and steel sector, characterized by the use of fossil energy for non-energy purposes, mainly in
the form of raw materials. Much of the potential for this sector to reduce its carbon emission therefore
lies in the use of alternative raw materials (new bio-based chemicals) and in the storage of carbon
emissions. Currently, there are pilot projects in Sweden whose aim is to engineer bio-based chemicals
and plastics by replacing traditional fossil fuels as raw materials in the production.
The relative contribution of low-carbon electricity in the exports of transport equipment and
machinery was fairly high given the high utilization of electricity in the production process. Overall,
the sector is not regarded as energy intensive, though given the high proportion of Sweden’s total
industrial output as well as exports, the engineering sector accounts for relatively high share of
industrial energy use (and also the NEGA credits).

4.4. Does Sweden Trade According to Its Comparative Advantage?

In Jiborn et al. [52] a new decomposition method was introduced to capture the degree and
potentially a loss of the comparative carbon advantage of Sweden (and the UK). The researchers find,
Energies 2020, 13, x FOR PEER REVIEW 21 of 27

4.4. Does Sweden Trade According to Its Comparative Advantage?

In2020,
Energies Jiborn et al. [52] a new decomposition method was introduced to capture the degree
13, 3613 20 and
of 25
potentially a loss of the comparative carbon advantage of Sweden (and the UK). The researchers find,
first, that even though Swedish carbon intensity of exports continued its decline throughout the
first, that
period of even
study, though Swedish
the relative carbon intensity
comparative carbon ofadvantage
exports continued its decline
has diminished asthroughout
the rest of the the period
world
of study, the relative comparative carbon advantage has diminished as the rest
has been catching‐up at a faster pace ‐ a similar finding also in this paper. Second, the export structure of the world has been
catching-up
of the country at has
a faster pace—a
become less similar
carbon finding
intensive also in this
while thepaper.
importSecond,
structure themore
export structure
carbon of the
intensive,
country has become less carbon intensive while the import structure more
pointing out to some potential of emissions displacement [52]. This supports the finding that Sweden carbon intensive, pointing
out to
has some potential
reduced domesticofemissions,
emissions at displacement
least partly,[52]. This supports
by reorienting the finding
domestic that Sweden
production structurehas
reduced domestic
towards less carbon emissions,
intensiveatgoods
least partly, by reorienting
and imports towardsdomestic
more carbon production
intensivestructure
goods towards
[52]. So
Sweden has not only lost some of its comparative carbon advantage between 1995 and Sweden
less carbon intensive goods and imports towards more carbon intensive goods [52]. So 2009, it has has
not only
also somehowlost some of itsthe
reduced comparative
exploitationcarbon advantage
of this advantage between 1995 terms
in relative and 2009, it hasnot
(though alsoinsomehow
absolute
reduced
levels). the exploitation of this advantage in relative terms (though not in absolute levels).
AA visualization
visualization of of the
the average
average annual
annual rate
rate of
of change
change in in exports
exports isis shown
shown in in Figure
Figure 8. 8. The
The graph
graph
pinpoints all
pinpoints all export
export sectors
sectors ofof Sweden
Sweden against
against the
the average
average rate rate of
of change
change in in their
their respective
respective carbon
carbon
intensity between 1995 and 2009. The upper left area of the graph
intensity between 1995 and 2009. The upper left area of the graph highlights the most desirable highlights the most desirable
situation, where
situation, where ideally
ideally most
most Swedish
Swedish sectors
sectors would
would be be located
located—those
– those are are sectors
sectors which
which achieved
achieved
above average
above average improvements
improvements in in carbon
carbon intensity
intensity while
while at at the
the same
same time
time growing
growing fastest
fastest in in terms
terms of of
relative export volumes. To have a desired impact on the global climate,
relative export volumes. To have a desired impact on the global climate, it would therefore make it would therefore make most
sensesense
most if these sectors
if these were those
sectors exploited
were those the most.
exploited Yet, many
the most. Yet, of
manythe traditional manufacturing
of the traditional manufacturingsectors
(such as basic metals, paper and machinery) have, despite substantial
sectors (such as basic metals, paper and machinery) have, despite substantial declines in carbon declines in carbon intensity,
grown exports
intensity, grown at exports
a belowat thea average
below the growth
averagerate.growth
Meanwhile, one of the largest
rate. Meanwhile, one ofexport sectors
the largest with
export
substantial
sectors withdeclines in carbon
substantial intensity
declines was the
in carbon ‘Other supporting
intensity was the ‘Other and auxiliary transport
supporting and activities’
auxiliary
sectors. This service sector is basically a support of the transport sector
transport activities’ sectors. This service sector is basically a support of the transport sector and and entails cargo handling
entails
services,
cargo storage
handling and warehouse
services, storage and services and others
warehouse services(WTOanddefinition).
others (WTO Itsdefinition).
significance Itsin the export
significance
shares
in as wellshares
the export as growth is subsequently
as well as growth is asubsequently
natural consequence
a naturalofconsequence
Sweden’s growth in exports
of Sweden’s and the
growth in
growing need for transport support services.
exports and the growing need for transport support services.
0.2
Average rate of change in annual exports
0.15

Other Supporting and Auxiliary Transport Activities; Activities of Travel Agencies

Coke, Refined Petroleum and Nuclear Fuel

Renting of M&Eq and Other Business Activities

0.1

Wholesale Trade and Commission Trade, Except of Motor Vehicles and Motorcycles

Chemicals and Chemical Products

0.05

Electrical and Optical Equipment

Machinery, Nec

Basic Metals and Fabricated Metal

Pulp, Paper, Paper , Printing and Publishing

Transport Equipment
0

-0.08 -0.06 -0.04 -0.02 0 0.02

Average rate of change in annual carbon intensity
Figure 8. Average annual rate of change in carbon intensity versus change in annual export volumes.
Figure 8. Average
Note: The annual
size of the rate
circle of change
indicates theinrelative
carbonshare
intensity versus
of the change
sector in exports
in total annual export
in 2009.volumes.
Area in
Note: The size of the circle indicates the relative share of the sector in total exports in 2009. Area
the left-hand side of the graph refers to the most desirable situation with increasing exports in sectors in
with falling carbon intensity. Area on the right-hand side denotes the opposite, suboptimal situation,
with increasing exports from sectors with growing carbon intensity.
Energies 2020, 13, 3613 21 of 25

5. Discussion and Wider Policy Implications

At a national level, electricity sectors are undergoing fundamental changes [55]. The diffusion
of new renewable energy sources such as wind, solar or biomass has escalated in the last decade in
countries such as China, the United States, Germany or India, while in some countries renewables
already supply a substantial share of the power generation [55]. The ongoing transition of the electricity
system, however, faces some major challenges such as changing role of public policies, new players in
the arena, the integration of multi-technology interactions and uncertainty or re-configuration of the
entire sector/system (ibid). Yet, what much of the transition and innovation scholars have in common is
the focus on the implications at the country level and the impact of renewable energy system changes
on the national policies and targets. It has become clear that global forces increasingly interact also
with ‘local policies, institutional contexts and infrastructures’ and research into how ‘local transition
pathways connect and accumulate into global ones’ is highly desirable [55,56].
The method of this paper suggests and empirically tests how the transition to an economy fueled
by low-carbon electricity offers a solution to the decarbonisation, not only at a national scale but
also at a global level by lowering the carbon content embodied in traded goods. The empirical
evidence in this paper, the discussion and conclusion, is based on a case study of the Swedish economy
over a period 1995–2008. The results show how increased investments into low-carbon electricity
production underestimate the global gains in terms of emission reductions, because of the cross-border
spillovers of direct electricity exports and exports of electricity embodied in manufactured goods.
This commonly overseen aspect of low-carbon electricity production requires further attention not only
for the purposes of the global decarbonisation but also for the design and implementation of future
emission trading schemes, pricing or cross-border adjustments. Understanding the spillover effects of
renewable electricity investment, helps to provide enhanced information and guide policymakers to
think systematically about the interactions of these investments at the national as well as the global
level. Overall, throughout the period of study, Sweden maintained its absolute and comparative
carbon advantage in a majority of its export sectors, though the gap between the Swedish and world
carbon efficiency narrowed within this period. Sweden had an absolute carbon advantage in 31 out of
its 35 productive sectors. While the country had an absolute carbon advantage in majority of its sectors,
it also had a comparative carbon advantage in many sectors, though the magnitude of the welfare
gains differed largely. Under the assumption that involvement in foreign trade leads to static welfare
gains of trade, which within this paper translate into savings of global carbon emissions, then the
comparatively largest contributors to these welfare gains are three productive sectors of the Swedish
economy accounting for close to 40% of total welfare gains: basic metals, chemicals and pulp and
paper. The role of electrification of the Swedish industry has brought, to some extent, this comparative
carbon advantage. Particularly sectors such as paper and pulp hugely benefited from this technological
transition that commenced as early as 1970s. But the potential for further electrification of the Swedish
industry is far from exhausted. The electricity-fueled hydrogen-based steel production is currently
under testing and the potential for the substitution of fossil fuels through bio-based alternatives in
the production of chemicals could have a substantial impact. Although with the ongoing structural
change in the Swedish exports, this might have a limited impact on the overall levels of NEGA credits
in the future, the electrification of particularly the steel and chemicals sector could have a huge impact
on the overall Swedish comparative carbon advantage. In the past, the carbon efficiency of Swedish
exports was higher than the world average, though the fast average annual rate of change in the world
manufacturing did lower this efficiency gap to a certain degree. There are several ways in which
countries like Sweden with comparative carbon advantage can further exploit and increase the volumes
of emissions savings. Swedish companies can, for example, more pro-actively market its produce
abroad with an environmental disclosure. Companies, public bodies and other institutions can also use
the comparative carbon advantage to attract foreign investments, particularly investments with high
electricity consumption. By relocating (part) of its production to countries like Sweden, other foreign
firms can indeed lower the carbon footprint of their produce and indeed actively contribute to the
Energies 2020, 13, 3613 22 of 25

global mitigation efforts. The concept of comparative carbon advantage can thus have some profound
policy implications and can be used as a climate mitigation tool.
Last one also has to keep in mind that wider cross-country adoption of the similar mechanisms
as evidenced in the case of Sweden will have some profound impacts on the world-average carbon
intensity. Since the concept of comparative carbon advantage is based on the relative measure to
world-average carbon intensity, any significant improvement in the world average will inevitably
lead to lower NEGA credits, or potential emissions savings. This does not mean that the respective
country is increasing carbon intensity of its production, but that the world on average is catching
up faster. This trend is already evident within this paper as the average annual rate of change in
world-average carbon intensity is faster than that of Sweden. Countries at the frontier of energy and
carbon efficiency have usually less space for improvement than laggards where often simple and less
costly measures can have a substantial impact on carbon intensity of production. Previous research
has also shown that while deployment of best available technology can potentially reduce the energy
intensity by up to 25%, there is also a limit for maximum energy efficiency. Once more countries adopt
best available technology, the possibility to exploit further the NEGA credits will become exhausted.
This is when investments into low-carbon electricity production and increased electrification of the
major energy-intensive processes could be one of the potential drivers of future NEGA credits.
A question arises to what degree this concept is then applicable to other countries, often countries
without the state-of-art production techniques or in the absence of decarbonized electricity system
and stringent environmental legislation. The evidence of Sweden has shown that in order to fully
exploit the comparative advantage, there needs to be strong and mutual synergies of both best
available technology adoption and low-carbon electricity. Globally, low carbon electricity (including
nuclear energy) accounted for 34% of total electricity production, but cross-country differences (this is
irrespective the level of development with some of the most developed countries such as Japan having
a highly carbon-intensive electricity generation, while on the other hand certain developing countries
such as Brazil with more than 75% share of low-carbon electricity (mainly hydropower)) remain large
and range between 10 and well over 90% of the national electricity production [57]. Investments into
renewables or fuel switching away from carbon intensive electricity production would positively
impact the countries’ position in respect to comparative carbon advantage. This move would, however,
need to be accompanied by continuous adoption of best available technology, which for some countries
would lead to increased costs of production, particularly in the absence of global carbon prices.

6. Conclusions
Decoupling of carbon emissions from economic growth is at the heart of future sustainable transitions.
Several mechanisms have been proposed as the major drivers decoupling, including increased energy and
carbon efficiency of production and the decarbonisation of the electricity generation. Yet, while certain
countries continuously intensify its decarbonisation efforts, there is a danger that emission reductions in
regulated countries with clear absolute reduction targets become offset or even exceeded by emission
increases in unregulated areas or areas with only relative carbon reduction targets.
In an increasingly globalized world, trade has often been seen as a driver of decoupling of carbon
emissions from economic growth in the developed world, while increasing carbon emissions in the
least developed parts of the world. Yet, most theoretical propositions of this trend of outsourcing
lack empirical evidence or the existing evidence is based on methods which disregard cross-country
differences in carbon intensity of production. Under such assumptions, a highly carbon efficient
country which trades identical goods with an unregulated country with obsolete technology will
always be treated as a country outsourcing its polluting production abroad.
The major aim of this study was to assess to what extent the outsourcing theories hold when
national differences in carbon intensity are taken into account. The paper explores a hypothesis that
countries with highly carbon efficient production and low-carbon electricity system will change its
position from being the outsourcer of emissions to, in fact, providing additional emissions savings as a
Energies 2020, 13, 3613 23 of 25

results of its involvement in the global trade. On the other hand, other countries, sometimes referred to
as the workshops of the world, with carbon intensive production and coal-based electricity generation,
will be penalized for not having cleaned
The paper uses environmentally-extended input-out tables of Sweden for the period 1995–2009 and
calculates the technologically-adjusted consumption-based (TCBA) emissions accounts. The method
then compares Sweden’s carbon efficiency to the newly calculated measure of ‘world-average’
technology. World-average technology is a technology of production available for respective sector and
year by taking into account sectoral carbon intensity of the world. Compared to other studies using
the established TCBA, the method further redistributes CO2 emissions from the electricity generation
sector, which makes it possible to distinguish and quantify the impact of two major decarbonisation
mechanisms: carbon efficiency of production and low-carbon electricity generation.
The paper specifically studies the role of productive efficiency and decarbonized energy system
applied on the case of Sweden and its impact on the embodied emissions in its trade. Having both
an energy efficient production and low-carbon electricity network was found to be an important
mechanism behind this advantage in the global trade arena. Overall, by Sweden exporting its
production globally between 1995 and 2009, Sweden contributed nearly 590 million tons of CO2
potential savings through its exports by having an efficient and low-carbon production. Furthermore
this report analyzes and quantifies the contribution of low-carbon electricity generation to Sweden’s
comparative carbon advantage. Low carbon electricity generation accounted for over 34% of the total
savings, of which some 20% were direct exports of electricity and 80% was electricity embodied in
exported products. The three productive sectors, which accounted for the largest shares of electricity
derived NEGA credits were the paper and pulp, the basic metals and the chemical sectors. The role
of electricity embodied in the exported goods (and services) is thus substantial and an important
contributor to Sweden’s comparative carbon advantage.

Author Contributions: Conceptualization, H.N. and A.K.; Formal analysis, H.N.; Funding acquisition, H.N. and
A.K.; Investigation, H.N.; Resources, A.K.; Supervision, A.K.; Visualization, H.N.; Writing–original draft, H.N. and
A.K.; Writing–review & editing, H.N. All authors have read and agreed to the published version of the manuscript.
Funding: This research was partially funded by Energiforsk grant number 2018:497. The APC was funded by
Handelsbanken grant number W17-0025.
Conflicts of Interest: The authors declare no conflict of interest. The funders had no role in the design of the
study; in the collection, analyses, or interpretation of data; in the writing of the manuscript, and in the decision to
publish the results.

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