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Åsa Löfgren, climate economics researcher.
"In the case of climate economics, very much revolves around getting companies to internalize the cost of emissions" Åsa Löfgren, researcher at the Department of Economics, says.
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"To me, my role is to contribute to better decision making"

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Climate change, deforestation of the Amazon and covid-19 – Åsa Löfgren, associate professor of economics, works with enormous societal issues in her research. A common thread running through her work is the search for ways for states, companies and individuals to work together on large-scale collective challenges.

“My research revolves around two major areas: climate economics and large-scale collective action. In climate economics, which I have identified with the longest, I had a focus on environmental taxation already in my dissertation. A key problem is that there is no price on destroying the climate, so I have spent a lot of time researching how we should actually price CO2”, Åsa Löfgren says.

It was not at all obvious for Åsa Löfgren to become an economist. She came from a natural scientific background, liked math and started studying at Chalmers. By chance she came across a course in environmental economics at the School of Business, Economics and Law in Gothenburg.

“Then I dropped out of Chalmers and started studying economics. I met Thomas Sterner and Christian Azar, who held the course, and they became great role models for me. Then I wanted to learn more and work with important societal issues, mathematics and nature”, Åsa Löfgren says.

A price on carbon dioxide to lower emissions

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Workers at wind power plant
Creating incentives for companies to invest in cleaner technologies is one key to reducing carbon dioxide emissions, Åsa Löfgren says.

Climate economics often takes place in the borderland between politics and economy. Åsa Löfgren talks about market failures: when production has undesirable consequences, in this case in the form of climate change, which the market mechanisms are not able to solve on their own.

“To me, my role is to contribute to better decision making. Finding scientific evidence that shows how one thing leads to another. In the case of climate economics, very much revolves around getting companies to internalize the cost of emissions – for example by setting a price on carbon dioxide emissions, which creates incentives for companies to make calculations and invest in cleaner technologies. It is akin to, for example, raising the price of meat for us consumers”, Åsa Löfgren says.

Linking solutions to climate change

A major challenge with the climate crisis is that there is no overall solution, but countries have different ambitions. So, what happens when some countries move faster than others – if Sweden and the EU set a price on carbon dioxide, will the emissions move to China?

“After the climate summit in Copenhagen in 2009, many felt that we could solve this issue globally. But it failed. What became clear then was that the solution to the climate crisis will come from below, and there I see it as my role as a researcher to look at models and policies, how they are linked and how they affect one another. How can we act regionally to make possible some kind of global solution in the future? That's really at the heart of my research.”

Large-scale collaboration problems demand a third party

Climate change is one of the major issues of our time. It is also, alongside for example the deforestation of the Amazon, an example of what Åsa Löfgren and her research colleagues at the interdisciplinary research center CeCAR call a large-scale collaboration problem. At CeCAR, Åsa Löfgren together with, among others, psychologists, political scientists and philosophers, investigates large-scale collective action from different perspectives.

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Collective Action 101 | What Are Large-Scale Collective Action Problems?

“It started with us being a number of doctoral students and new PhD:s who realized that we had a lot of common theory on cooperation and so-called social dilemmas. We discussed, found a common language and many years later formed CeCAR. We have spent a lot of time trying to understand what distinguishes a large-scale challenge from a small-scale one”, Åsa Löfgren says.

The group landed in four characteristics – if you get high scores on all of them, the probability is high that you have a large-scale cooperation challenge. The four categories concern how many actors are involved, if it is geographically dispersed, if it is extended over time and about how complex the problem is.

“Communication promotes cooperation, seeing what other people do, trusting each other and so on. These four categories put a layer of stress over the factors that enables collaboration. What we show is that you need a third party who helps out with solutions, most often a state but it can also be someone else.”

A current example is the corona pandemic, which Åsa Löfgren, Niklas Harring and Sverker Jagers analyzed in the study "COVID-19: Large-scale collective action, government intervention, and the importance of trust". The pandemic is here categorized as a large-scale collective problem, but researchers also note that it takes place within a much narrower time frame than, for example, climate change – where those who make decisions are largely not the same people who are affected by them. This may be one of the explanations for the rapid and powerful political response to the pandemic.

Illustration of Covid 19 as a large scale collective problem
Illustration from Harring, N., Jagers, S.C., & Löfgren, Å. 2021. “COVID-19: Large-scale collective action, government intervention, and the importance of trust”, World Development, Vol. 138, February 2021, 105236.

You are also involved in other fora, for example as a former member of the Swedish Climate Policy Council – what does involvement outside the academy mean to you?

“For me, policy makers or government are important recipients of my research. I'm in the government’s commission on phasing out fossil fuels, where we investigate a stop date for fossil fuels in Sweden. If I say something there as an expert it does not mean it will happen – in the end it is political decisions. But I want to contribute with the knowledge I have. I think that's a part of my job. It takes time from the research, but today I have the opportunity to participate. As a young researcher with young children, it may be more difficult time wise. But of course, I also have to say ‘no’ sometimes”, Åsa Löfgren says.

Åsa Löfgren

Academic title: Associate Professor

Research interests: Environmental economics, climate economics, behavioral economics

Background: Has been funded by several major Mistra programs with a focus on climate during her research career and is currently responsible for policy research within the research program Mistra Carbon Exit. Has for a long time worked closely with researchers at Resources for the Future (one of the world's first environmental economic “think tanks”) and has also spent a couple of research periods on site at their office in Washington DC. Former council member of the Swedish Climate Policy Council and the School of Business, Economics and Law's council for sustainable development. Participated in starting the environmental social science program (SMIL) at the University of Gothenburg.

Dissertation: Environmental Taxation – Empirical and Theoretical Applications, Department of Economics, University of Gothenburg.