There is a large amount of literature discussing the “Resource Curse” (sometimes called the Oil Curse, but established before that for silver, gold, etc.), in which countries blessed with an abundance of a desirable resource often turn into kleptocracies ruled by thugs.

Oddly, countries like Japan and Taiwan, with few (if any) local resources, often soar because their cultures build in a premium on efficiency …

It appears that Sweden — while not as resource poor as many others, but certainly not as resource rich as most other developed nations — enjoys the same advantage.

As my adviser used to say as we struggled with our designs, “Uh-oh, out of money — time to think!”

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In the cool forest region of southern Sweden, the city of Vaxjo has turned off the heating oil, even on the darkest, snowbound days of winter.

Coal, too, is gone and next on the fossil-fuel hit list is petrol. In the underground car park of the local government offices, there are no private vehicles, just a communal green-car fleet. Staff who cycle or take the local biogas buses to work book ahead to drive — fueling up on biogas or E85, a blend of 85 per cent renewable ethanol.

Petrol is still readily available to the public, but carbon emissions in Sweden are heavily taxed. Drivers pays about 80 cents a litre extra at the bowser.

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Vaxjo is chasing a future free of fossil fuels, and it’s almost halfway there without having sacrificed lifestyle, comfort or economic growth.

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When local politicians announced the phasing out in 1996 [?!], it was little more than a quaint curiosity. Oil prices were hovering around a manageable $US20 a barrel and global warming was still a hotly contested debate. Today, at least one international delegation a week — mainly from China and Japan — beats a path to Vaxjo to see how it’s done.

The Vaxjo model has been repeated all over Sweden, creating a network of “climate” municipalities. Sweden’s total emissions have long been falling and last year the Government announced its own ambitious national goal: to end oil dependency by 2020.

Today, Sweden’s annual greenhouse gas emissions are just over five tonnes per capita, compared with Australian and US levels in the high 20s and climbing. That’s before calculating Sweden’s forests, which serve as huge carbon sinks that could offset emissions by another 30 per cent. In Vaxjo, it’s 3.5 tonnes of carbon per capita, the lowest urban level in Europe.

Meanwhile, the heavily taxed Swedish economy has clawed its way up into the world’s top five, partly due to cutting-edge “clean tech”.

The first step towards Vaxjo’s — and Sweden’s — success was the city power plant …

Then, instead of dumping the cooling water, as most power stations do, it’s pumped out scalding to the city’s taps and to another vast network of pipes. The second delivery system of insulated pipes runs hot water continuously through heaters in homes and offices. The water leaves the plant at over 100 degrees, travels as far as 10 kilometres and comes back warm to be reheated, over and over again. An enormous municipal hot-water tank acts as back-up, so showers never go cold.

“Everyone used to have oil burners for heating and the city was very dirty. We had to do something,” says operator Hakan Eliasson. He started his career in coal, he says, but loves the mountains of pungent woodchips and the blue skies. Consumers, too, are happy; biofuels are cheaper than oil.

The Vaxjo plant was the first in Sweden to switch from oil to bio-energy. It was the beginning of a nationwide energy conversion, the single most significant factor to date in Sweden’s falling emissions.

In Vaxjo and elsewhere, there’s been a relentless effort to get people out of cars and onto bikes and buses, to redesign housing, to encourage high-density living over urban sprawl and to start teaching green lessons from preschool.

Vaxjo’s next big environmental first is partially concealed under a mammoth custom-built tent on the lake front. It’s a 67-unit, eight-story apartment block in a new, high-density wooden city; the first high-rise wooden building in Europe. Unlike high-energy steel, concrete and other manufactured building materials, wood is carbon neutral, requires less processing and insulates well. The tent is to keep the site dry to prevent warping and swelling; the one technical challenge not yet overcome is how to build in rain.

In 1991, Sweden introduced the world’s first carbon tax, slugging carbon emissions at a hefty $US100 a tonne, double the rate economists now suggest would sharply accelerate the development of renewable energy worldwide.

Initially, the environment was only part of the motivation; energy security was a more immediate concern. With no coal or oil reserves, Sweden’s economy had been badly shaken by successive oil shocks. Like other European nations, Sweden had turned to nuclear and hydro-power in the 1960s and ’70s. But, in a referendum in 1980, Swedes voted to eventually dismantle nuclear power, forcing a search for alternative energy sources. Two nuclear reactors have since been shut down, but nuclear power remains an important part of a virtually emissions-free electricity sector.

“At the time this was very radical and the tax was very, very high,” says environmental economist Professor Tomas Kaberger. “But suddenly we had thousand of entrepreneurs looking for low-cost, biological waste products that could be used for producing electricity and heat more cheaply than fossil fuels. They found residues in the forestry industry, waste in the food industry and agriculture and even wet, putrid garbage.”

But Swedes are still encouraged to take the train instead of driving, because road transport emissions are the most difficult to bring down. Swedish railways offer emission calculators for consumers to assess every trip. A high-speed electric train from Stockholm to Vaxjo, for example, emits two grams of carbon dioxide per person, a car with two passengers 39.54 kilograms and a 737 aircraft, 65 per cent full, 58.15 kilograms. Flying one way adds up to about $20 worth of environmental damage, according to Swedish railways. Scandinavian Airlines, however, does offer passengers the option of buying a carbon offset with their seats.

Economies cannot be transformed without a carbon price, says Kaberger. But a carbon tax shouldn’t be just another cost to the economy; the revenue allows governments to lower tax in other sectors.

Since 1991, the carbon tax has been increased to $US150 a tonne, and the industry rate doubled to $US50. Yet economic growth is more than 5 per cent and unemployment about 4 per cent, partly due to booming clean-tech industries and record export sales for Sweden’s big companies, such as Volvo, Ericsson and Telia.

Whether Sweden will meet its 2020 goal is not certain. Arguably, the conversion of electricity and heating plants to biofuel was the easy part. The big hurdle, for Sweden and the world, is automotive fuel. Globally, fuel consumption and emissions are soaring, especially in China and India.

And, whatever emissions level Sweden will have, there will be little impact on global warming; its greenhouse gases were never more than 0.5 per cent of the world total.

“But, the best argument has always been the economic one,” Edman says. “Clean technology and energy solutions are the biggest emerging global sectors. We can earn a lot of money and create a lot of jobs by being at the frontier.

We are a small country, but we’re exporting management, ideas and technical solutions to China and elsewhere. And China is sending technicians here to work for free just to learn. That’s our chance to make a difference.