VAXJO, Sweden - 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 car fleet.
Staff, who cycle or take the local biogas buses to work, book ahead to use vehicles in the fleet, and fill 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 pay about 80 cents a litre extra at the bowser for the privilege of spewing out carbon dioxide.
Vaxjo is chasing a fossil fuel-free future, and it's almost halfway there without having sacrificed lifestyle, comfort or economic growth. When local politicians announced the phase-out in 1996, it was little more than a quaint curiosity. Oil prices were hovering around $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 emissions have long been falling, and last year the Government announced its own ambitious national goal: to end oil dependency by 2020.
Sweden's annual greenhouse gas emissions are equivalent to just more than five tonnes of CO2 per person, compared with Australian and American levels in the high 20s and climbing. That's before factoring in Sweden's forests, which serve as huge carbon sinks and could offset emissions by 30 per cent. In Vaxjo, residents emit 3.5 tonnes of CO2 each, the lowest urban level in Europe.
Meanwhile, the heavily taxed Swedish economy has clawed its way into the world's top five, partly due to the use of cutting-edge "clean tech".
The first step towards Vaxjo's - and Sweden's - success was the city power plant. Today its giant smokestack towers over the pristine lakes, parks and cycleways, barely emitting a puff of steam. Inside the plant there's a huge furnace, similar to those that burn coal, but the suffocating heat feels and smells like a sauna.
Woodchips, sawdust and other wood waste discarded by local forestry industries are burning at extremely high temperatures to produce electricity. Instead of the cooling water being dumped, as in most power stations, it is pumped out to the city's taps and into another network of insulated pipes, which runs hot water through heaters in homes and offices. The water leaves the plant at close to boiling point, travels as far as 10 kilometres and comes back warm to be reheated, over and over. An enormous municipal hot water tank acts as a 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 a power plant 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 most significant factor so far in Sweden's falling emissions. But a city technical officer, So Hie Kim-Hellstrom, says power plant conversions are not nearly enough.
In Vaxjo and elsewhere there has been a relentless effort to get people out of cars and onto bikes and buses, to redesign housing, to encourage high-density living and to start teaching environmental awareness from preschool.
More than 30 per cent of energy, Kim-Hellstrom says, can be saved by changing the way you live - but you need to be persuaded. The city imposes parking charges on petrol-run vehicles, for example, but it is free for low-emissions vehicles.
"When we started the fossil fuel-free campaign a lot of people complained that the economy would be ruined; now we have lots of new businesses and the city is growing," Kim-Hellstrom says. "But, don't get the idea it is quick or easy. Every single new energy-efficient light bulb is important. We've been working a very long time to get where we are."
Nor could Vaxjo and other Swedish towns and cities have come so far without sweeping changes in national policies.
In 1991 Sweden introduced the world's first carbon tax, slugging carbon emissions at $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 1970s. 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 is still an important part of a virtually emissions-free electricity sector.
In theory, Swedes liked the idea of reducing their economic reliance on oil cartels and the volatile Middle East. But the economy was then in recession and businesses forecast dire consequences. Many energy-intensive businesses, such as car makers and aluminium smelters, won big concessions, but they still had to pay $US25 for each tonne of CO2 they produced, while international competitors paid nothing.
"At the time this was very radical and the tax was very, very high," says an environmental economist, Professor Tomas Kaberger. "But suddenly we had thousands 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."
Dumping combustible biological waste in landfill was banned, so garbage collection agencies were happy to pay the new power plant operators to take their rubbish, he says.
Another biofuel frontier that opened was flexible-fuel vehicles. Saab began developing cars that took petrol or up to 85 per cent-biofuel blends, but kept a low profile for fear of derision in a global market besotted with gas-guzzling four-wheel-drives. Now, with Volvo and Ford, Saab is selling flexible-fuels vehicles in Europe, where ethanol-based fuels are rapidly gaining ground. For Swedish car buyers there's a new Ã¢â€šÂ¬1000 ($1600) government rebate on every "green" car.
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 CO2 per person; a car with two passengers, 39.54 kilograms; and a Boeing 737, 65 per cent full, 58.15 kilograms. Flying one way adds up to about $20 worth of environmental damage, the railways say.
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 in the transport sector, especially in the huge new consumer economies of China and India.
The answer may lie in Sweden's Arctic north, where locals refer to their vast forests as "green gold".
"The world has oil sheiks who made their money from black gold; the idea is that we will become tree tsars in the biofuel era," says one local, laughing.
He's only half-joking. Ethanol for vehicles is made from crops such as corn, wheat and sugar cane. There are reasonable concerns that the world's forests - vital carbon sinks and protectors of biodiversity - are threatened by the expansion of land-intensive biofuel crops. Poor nations could suffer food shortages if crops are diverted to produce biofuels for industrial economies.
Sweden's sparsely populated northern frontier, icebound and dark in winter, is pinning its hopes on an experimental fuel plant. Second-generation automotive biofuels made from forest and agricultural waste would dramatically reduce pressure on land use, minimising the global environmental collision between forests and biofuel farms.
It's working: gas and liquid vehicle fuels are being produced from cellulose. But it's not yet commercially viable.
Stephan Edman, one of the original architects of the greening of Vaxjo and the national push to phase out oil, says the development of biofuels for transport could still fail, halting Sweden's progress.
After decades on the environmental front line, Edman concedes it has been a long, hard fight despite the Swedes' deep-seated respect for nature, tolerance of high taxes and concern for the common good.
Whatever emissions level Sweden achieves will have little effect on global warming; its greenhouse gases were never more than 0.5 per cent of the world's 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."
Copyright © 2007. The Sydney Morning Herald.