The Riksbank’s research

An important assignment for research at the Riksbank is to provide models, tools and analyses to enable the Riksbank to perform its tasks. This research and the analyses carried out also aim to build and develop knowledge in general on various socioeconomic issues. The interaction between climate change and economic development and policy is one such area.

The interaction between the climate and our economies

The Riksbank has been researching various aspects of how climate change affects economic development for several years, often in cooperation with researchers from Swedish and foreign universities.^[27] The annex lists some of the scientific publications. It is now clear that human beings are affecting the climate, primarily by releasing greenhouse gases into the atmosphere. It is also clear that climate change affects our economies and us in a number of ways. We expect this impact to be extensive and it is therefore important that central banks and other policy makers have the models and tools needed to make forecasts and analyse the various policy measures they wish to implement. The Riksbank’s researchers have contributed to the development of models for this purpose. Among other things, this research provides indicative estimates of how GDP and consumption will develop, depending on where and how CO₂ emissions are taxed in the world. The IMF and others have used these models to make forecasts.^[28] See Chapter 3 in World Economic Outlook, IMF 2019, September.

The role of energy in the economy

As the link between climate and the economy goes through fossil energy use, the Riksbank has focused a large part of its climate-related research on understanding how to incorporate the energy sector into macroeconomic models. The Riksbank's research analyses whether technological developments will be strong enough to lead to continued high growth in GDP and consumption, despite the fact that we have to use less fossil fuels. The results show that we can expect marginally lower growth.