According to an IPCC study, everyday behavioural changes by people which reduce demand for energy – such as adjusting temperature settings in buildings and reducing air travel – can cumulatively lead to substantial reductions in carbon emissions. People across the world are increasingly concerned about climate change and want to do something about it. Climate change is inspiring people to step up to a higher cause, to take collective action for the common good of our planet. Singaporeans too are becoming more environmentally conscious. According to a 2020 study by the Institute of Policy Studies, 61% of Singaporeans surveyed felt that protecting the environment should be prioritised even if it results in slower economic growth and some loss of jobs. More individuals are taking climate-friendly actions, motivated by a desire to preserve a liveable world for future generations. There are many things we can do as individuals to minimise our impact on the climate. We can do energy audits of our homes to identify ways to be more energy efficient. We can reduce food and plastic waste. We can become a zero-waste nation and a circular economy, where we use less resources and re-cycle resources. We can eat lower in the food chain and shift towards more plant-based protein. University of Oxford researchers have found that reducing meat and dairy products from our diet can help to shrink our carbon footprint from food by up to 73%. We can drive less and take public transport more.
The adjustment of external debt will no doubt require continued current-account surpluses in the years ahead, which presupposes that the krona is weaker than its long-term equilibrium level. Moreover, the domestic demand trend needs to be balanced to prevent it from generating unduly high inflation. As central government debt is sizeable, it is also important that fiscal restraint continues, with the focus on debt repayment. However, a continuation of current-account surpluses of the magnitude we have seen in recent years is not to be expected. As domestic demand strengthens, the economy approaches full capacity utilisation and the monetary stance accordingly becomes less expansionary, the krona should appreciate, accompanied by diminishing surpluses on the current account. You would, of course, like to know the rate at which the krona would be linked to the euro in the event of Sweden opting to join the monetary union. Unfortunately it is still too early to answer that question. The rate will depend, for example, on Sweden’s competitive position relative to the countries that have already adopted the euro. We would also have reason to aim for a central rate that puts the Swedish economy on the right track and promotes a continued adjustment to internal and external balance. The optimum central rate might differ somewhat—though probably not all that much—from the market rate in the event of Sweden joining ERM2 if, for instance, Sweden’s monetary policy and cyclical position were to deviate from the euro countries’ prior to Swedish actually joining the monetary union.