The past, present and future of Nordic environmental economic history

ABSTRACT

This article traces the development of environmental economic history focusing on the Nordic countries over the past decades. In doing so, a definition of environmental economic history is presented to distinguish the field of research from traditional economic history as well as environmental history. As shown, the field developed both in relation to environmental economics and by providing historical perspectives to the current environmental debate. The article concludes that it is important for students in the field to integrate theoretically rooted environmental perspectives into the traditional economic historical research.

KEYWORDS:

• Environmental history
• economic history
• environmental economics
• survey

Introduction

Over recent decades, Nordic economic historians have delivered extensive research on topics related to environmental history. A basic premise has been that climatic and environmental factors historically impacted economic performance and will likely continue to do so. This article aims to define the research domain that might be termed as ‘environmental economic history’ in a Nordic empirical context, with the ambition to explore its historiography, its theoretical foundations, its status, and its potential future trajectory.

Given that a substantial portion of mainstream economic history deals with themes related to natural resources, the scope of this study has been limited to works that are judged to be anchored in environmental or ecological economic theory, or studies that deals with economic aspects of explicit environmental problems addressed in society, sometime in the past. In addition to elucidating the concept of environmental economic history for the broader economic historical community, this study augments and complements earlier overviews of Scandinavian and Nordic environmental history, such as Fritzbøger (2006), Bergquist (2017; 2019), Myllyntaus (2021), Millkrantz et al. (2022) as well as David Larsson’s (2021) book on the development of environmental issues in the post-war period (see also Hultman, 2021).

In practical terms, this article accentuates studies that probe into the manners in which Nordic capitalism navigated environmental challenges, focusing on both individual actors, and overarching structural paradigms, occasionally melding the two. The empirical lens is specifically trained on research centred around Sweden, Norway, Denmark, Finland, or Iceland. It is noteworthy that there might exist works of environmental economic history authored by scholars who do not primarily identify as economic historians. Conversely, economic historians might have produced environmental historical studies that do not fit the mold of environmental economic history, particularly if they lack the foundational perspectives on economic decision-making and trade-offs. Furthermore, this discourse references research publications in Nordic languages and those published domestically. This emphasis holds significance for understanding the historiographical landscape, especially considering the English language only began to prominently influence the Nordic economic historical discourse around the 1990s.

Towards a definition of ‘environmental economic history’

To initiate the discussion, it is imperative to delineate ‘environmental economic history’. This is necessary since the Nordic economic historical scholarship has generated an extensive literature exploring areas like agriculture, fishing, forestry, mining, and energy sectors, which are closely connected to the natural environment. Probably, such themes cover a bulk of Nordic economic history. A comprehensive definition should differentiate environmental economic history from most economic historical analyses concerning natural resource industries, and related stakeholders and institutions. Due to the theoretical nature of defining ‘environmental economic history’ it will be necessary to position the research into a broader international and evolving theoretical context.

Works selecting as ‘environmental economic history’, should work from the perspective that climate and natural environments play decisive roles in processes of socio-economic change. Environmental economic history is therefore in opposition to purely institutional explanations. Also, environmental factors work in a similar fashion as institutions, namely by limiting and enabling human agency.

Environmental economist Richard Tol (2021) identified two extreme positions in analyses of climate and development: environmental determinism and institutional determinism. Jared Diamond’s argument that the current distribution of income across the world can be explained by a few factors of geography is an example of environmental determinism (Diamond, 1998). David Landes (1998) proposal that European economic development was facilitated by a climate with cool summers, mild winters, and regular rains, and Jeffry Sachs (2003) claim that ‘institutions don’t rule’ represents positions were climate and geography are influential, but not dominating factors in relation to economic development and stagnation. Daron Acemoglu and colleagues (2001, 2002) add another layer to this discourse by suggesting that while climate once molded institutions, it is these very institutions that now steer contemporary development. Environmental factors therefore shape how the traditional allocation questions are solved, and how institutional and technological development paths are formed. Since both questions of economic allocation, institutions and actors are affected, we can conclude that economic environmental history studies how and through which mechanisms climate and natural environments have impacted economic growth in the past.

A second dimension of relevance for defining ‘economic environmental history’ departures from the fact that economic perspectives always include an element of choice. In environmental terms choices between the output mix of good outputs – contributing to economic welfare – and bad outputs, leading to environmental degradation and natural resource depletion – thereby reducing welfare through negative utility – is fundamental. The elements of choice between ‘goods’ and ‘environmental bads’ distinguish environmental economic history from both traditional economic history and environmental history. In practical terms, environmental economic history might delve into corporate environmental strategies, the historical socio-economic costs of pollution, regulatory dynamics, and economic growth, especially when the natural environment emerges as a crucial determinant amidst other traditional economic factors. In other words, one expects an element of cost attributed to the environment in works of economic environmental history.

To better grasp the distinctive focus of environmental economic history, comparing it to environmental history can be enlightening. As Donald Worster outlined, environmental history typically navigates three principal investigative terrains: the history of the environment itself, the interplay between the environment and societal change, and the evolution of environmental ideologies (Worster, 1989). Direct histories of the environment, such as examinations of how landscapes and ecosystems have transformed over time, often have human economic activity as a driving force behind them. However, the economic actions are not the primary focal point in these studies. For instance, while the influence of forestry practices on boreal forests is evident, the economic nuances behind such practices are not the primary concern in this strand of environmental history. One example of a study focusing historical environmental impacts driven by economic activity is John Svidén’s estimates of sulphur and mercury emissions from Swedish iron works between 1655 and 1920 (Svidén, 1996).

Moreover, environmental history often seeks to elucidate societal evolutions stemming from intricate interactions with environmental shifts, inclusive of ideational and conceptual links to the environment. For instance, Sverker Sörlin's exploration of Norrland, portrayed as ‘the country of the future’, delves into the entwined narratives of natural resources, colonial undertones, and economic advancements in Northern Sweden during the 18th and 19th centuries (Sörlin, 1988). When juxtaposed with the primary perspective of environmental history, the line demarcating it from economic history becomes increasingly tenuous. Concepts like property rights and the ideologies governing the utilisation of natural resources blur the distinction between environmental economic history and broader environmental history. Yet, the fundamental equilibrium between economic advantages and environmental detriments stands out as a defining criterion. Consequently, works like Sörlin's book predominantly fall within the ambit of environmental history, rather than what is here defined as ‘environmental economic history’.

Environmental discourses in economic thinking

As the definition of environmental economic history used here is depending on theoretical points of departure, an important context is given by the evolution of environmental thinking in economics (Warde et al., 2018). This is so since the theoretical and discursive points of departure in ‘environmental economic history’ are often found in international environmental or ecological economics.

The 1960s saw a rise in environmental awareness (Røpke, 2004). Rachel Carson’s ‘Silent Spring’ highlighted the tension between economic progress and ecological health, setting the stage for the development of environmental economics (Carson, 1962). Figures like Stanley Jevons, who introduced the ‘take-back effect’, and Arthur Pigou's (1920) concept of negative externalities, shaped early discussions. Harald Hotelling's (1931) ideas on resource sustainability later informed discussions on how to measure sustainable development.

Regulatory insights, such as Scott Gordon’s (1954) perspective on the pitfalls of ambiguous property rights in overfishing, paved the way for broader discussions, like Garrett Hardin’s (1968) ‘Tragedy of the Commons’ and Kenneth Boulding’s (1966) metaphor of ‘spaceship Earth’, which emphasised Earth's finite resources, a theme that was reiterated by the 1972 ‘Limits to Growth’ report. Criticism of GDP as a measure of progress also became more common in the early 1970s. Boulding’s emphasis on system boundaries and Nicolas Georgescu-Roegen’s (1971) attempts to integrate the entropy law with economic theory, marking economics as an evolutionary discipline contributed to the emergence of Ecological economics emerged in the 1960s, viewing the economy as an open system to the natural world. According to Inge Röpke (2004) ‘the basic idea of ecological economics is that the economy ought to be studied also as a natural object, and that economic processes should consequently also be conceptualized in terms usually used to describe processes in nature’.

Environmental economics, which had roots in neoclassical and even classical economic thinking on optimal resource depletion, also evolved during the 1960s and early 1970s (Pearce, 2002; Sandmo, 2015). While traditional economists often championed the positive interplay between economic growth and the environment, environmental economists such as Richards Nordhaus believed that the formation of appropriate institutions, substituting for insufficient property rights, were necessary to mobilise the price mechanism to counter resource depletion and environmental degradation.

‘Sustainable development’ as advocated in the 1987 UN report ‘Our Common Future’, primarily a political and diplomatic tool rather than a strictly scientific or economic one, aimed to bridge divides among various stakeholders. From the perspective of environmental economics, a wave of research attempting to define and measure sustainable development was initiated. This included a renewed call for environmentally adjusted GDP-measures, as well as the idea of a dynamic relationship between economic growth and environmental degradation, known as the environmental Kuznets curve (EKC), suggesting an inverted ‘U’ relationship between economic growth and environmental impact.

Early developments in Nordic environmental economic history

During the late 1980s and early 1990s, economic history began to incorporate environmental research, leading to two main lines of research: A first approach was to address classic economic-historical problems via environmental arguments. The core focus was set upon how the environment and society had co-evolved. This type of approach had indeed previously been taken by an older generation of economic historians. Gustav Utterström (1955) had for instance argued that the geopolitical changes in sixteenth and seventeenth century Europe was due to ‘the little ice age’. A more down right attempt to departure from concepts in ecological economics was Ulf Sundberg (1992) and Sundberg et al’s. (1995) multidisciplinary studies, which posited that the rise of Sweden's seventeenth-century great power era arose from an ‘energy surplus’ from forests. The study included estimates of a seventeenth century energy balance, which was based on the seminal works of ecosystem ecology by Eugene and Howard T. Odum (1953, 1971, 1973). The historical interpretation was based on Fred Cottrell’s (1955) idea that a society's energy conditions was decisive for the evolution of its culture and potential to secure political, economic and military power. Yet, such ideas received limited attention among historians, possibly since the role of iron and copper industries was well-known, although the energetics had not been dwelled upon. In contrast, Thorkild Kjaergaard's (1994) ‘The Danish Revolution’, also inspired by ideas from ecological economics, stirred an animated academic discussion. It suggested that the demise of Denmark's feudal structures from 1769 to 1849 was due to an ecological crisis, a ‘multifactorial entropy crisis’, rather than the enlightenment. In short, deforestation caused by demands from the national state in combination with population growth, initiated an agricultural crisis which in turn undermined existing power relations within the Danish society.

Turning to Finland, Timo Myllyntaus’ (1989) doctoral thesis had focused on the electrification of the Finnish economy using an economic historical, large technical systems framing. Myllyntaus (1999) also published a collection of Finnish and Swedish historical energy prices and presented estimates of the standing timer volume in Finnish forests during the nineteenth century. His main research effort was, however, not to develop environmental historical approaches within economic history; instead, he contributed to the development of international environmental history.

A second approach taken in economic history was to contribute to a contemporary environmental debate using historical examples and insights. Olle Krantz (1989) was probably one of the first economic historians to approach environmental economic history from a Schumpeterian, dynamic perspective. Krantz highlighted the capitalist economy's adaptability amidst resource constraints, citing historical instances where dynamic responses had steered clear of resource crises. As such, Krantz's work showcased how environmental queries could benefit from economic historical perspectives. Structural analysis, particularly regarding energy consumption patterns, was a significant point of departure. For instance, Lennart Schön (1990, 2000) suggested that electricity-intensive sectors outpaced fuel-intensive sectors during high productivity growth periods, emphasising electricity's role in driving economic transformation in twentieth century Sweden. This interpretation aligned with the notion of electricity as a General Purpose Technology (GPT), foreseeing long-wave patterns in energy intensity and emissions relative to GDP.

Historical environmental accounting

Since the late 1960s scholars had pondered how real welfare, inclusive of environmental costs, had evolved over time. They questioned whether historical periods of significant economic growth genuinely mirrored welfare development, especially given environmental impacts. This research pathway emphasised the limitations of using GDP as a welfare metric, particularly when considering environmental degradation and resource depletion. The question was whether historical GDP figures truly represented welfare, given the ecological impacts of growth.

The Historical National Accounts (HNA) stands as a vital tool in structural analysis, shedding light on economic trends and patterns across different epochs. But as environmental considerations began to weave their way into economic deliberations, the pertinent question arose: Could one create an Environmental Historical Account to chronicle the interplay between the environment and economic growth (Krantz & Lindmark, 1995)?

Magnus Lindmark (1998) embarked on a quest to design historical environmental accounts aimed to empirically unravel the relationship between environmental dynamics and long-term economic evolution. Another attempt to establish historical environmental accounts was Ragnar Arnason’s (2003) study on the Icelandic cod fisheries, spanning four decades from 1955 to 1996. Both these endeavours reflected a growing awareness to explore historical growth of welfare, by using an environmental economic theoretical framework.

The theoretical bedrock for such environmental accounting had been established by environmental economists like John Hartwick (1990) and Karl-Göran Mäler (1991). They imagined a ‘green’ Net National Product (NNP) that was sensitive to the degradation of environmental assets and the exhaustion of natural resources. Grounded in the theories of John Hicks, this vision posited the environment as a form of capital – one that bestowed the economy with ‘environmental services’ benefits or utilities emanating from nature. Like man-made capital, this environmental capital too could experience depreciation in the form of depletion or degradation.

While traditional GDP and NNP highlight consumption possibilities, these measures fall short without incorporating the shifts in natural capital stocks. However, arriving at these estimates is a complex task. The very nature of estimating biomass levels of forests, fisheries, or any other biota stock poses challenges. On top of these fundamentals, the economic valuation remains fundamentally problematic.

The heart of the valuation challenge lies in the nebulous nature of property rights for environmental assets. In the absence of well-defined property rights, market prices for these assets do not exist. Environmental accounting thus leans on ‘shadow prices’, which are theoretically guided approximations based on existing market prices. But this approach is fraught with pitfalls, as property externalities arise from poorly defined rights, causing inefficiencies that mar the very purpose of environmental accounting.

Estimates of historical environmental costs suggested that environmental degradation, when measured in welfare terms, rose until the 1960s and thereafter diminished. This trajectory aligned with the Environmental Kuznets Curve (EKC) hypothesis. The aggregated environmental costs, measured as the hypothetical cost to avoid emissions, accounted for about 2–3 percent of GDP, suggesting that the environmental challenges of the twentieth century were abated at a relatively minor cost.

Environmental accounting, particularly in the context of Genuine Saving (GS), has garnered increased scholarly interest, exemplified by historical estimations conducted for Scandinavian nations (Lindmark & Acar, 2013; Fink & Ducoing, 2022). Genuine Saving endeavours to assess investments while considering environmental expenses, employing methodologies akin to those employed in the inaugural historical environmental accounting practices.

Energy and economic growth

When analysing the causes of industrial revolution, pioneers such as Werner Sombart, John Nef, and Tony Wrigley, inevitably became among the first scholars to study energy transitions. More recently, Vaclav Smil (1993) made historical energy transitions themselves the focus of attention. A more recent example is Alfred W. Crosby’s (2006) on energy history.

Following Smil’s pioneering works, Astrid Kander (2002) explored the nexus of energy consumption, carbon emissions, and economic growth in Sweden. The rationale was that greenhouse gas emissions, with carbon dioxide taking the centre stage, are inextricably linked to our patterns of energy consumption – not just in the amount but also in the mix of fossil fuels and alternative sources. While previous analyses of Swedish energy consumption, such as those by Sven-Olof Olsson (1993), overlooked unconventional energy sources like wind, non-marketed firewood, human, and animal muscle power, Kander's work addressed this issue to provide a clearer picture of the total nineteenth and twentieth century energy consumption. Long term patterns of energy consumption, and specifically fossil fuel consumption, could thereby be elaborated. Thus, the long-term pattern of energy and carbon intensity of GDP could be estimated. One pivotal revelation from Kander’s work was the declining energy intensity of GDP over time. While it was evident that energy consumption and GDP were intertwined, the former did not increase in tandem with the latter. In fact, by the early 1970s, energy use in Sweden reached plateau. Estimates of Danish historical energy consumption were made by Henriques and Sharp (2016), Finnish estimates have been elaborated by Myllentaus (Kunnas & Myllyntaus, 2010) and Norwegian ones were constructed by Lindmark and Minde (2018). Additional estimates of various aspects of energy consumption include Mikael Levin's (2014) estimations of Swedish household energy consumption in the twentieth century, Lindmark and Olsson Spjut (2019) adjustment of nineteenth century Swedish firewood consumption.

Also, trade contributed to shape patterns of energy consumption during the nineteenth century. Such studies are based on the concept of embodied energy: an accounting method which aims to find the total energy input in a product chain necessary for producing a good for final use. Historical embodied energy flows through trade have for instance been studied for Denmark and Britain (Henriques & Sharp, 2016; Henriques & Warde, 2018). While Denmark imported British coal, it simultaneously exported embedded energy to Britain in the form of agricultural products.

Furthermore, growth accounting methodologies have also been employed to examine the relationship between energy and economic growth (Kander & Schön, 2007). It's noteworthy to recognise Wrigley's assertion that being entrenched within an organic economy entails being confined by constraints on economic expansion, thereby implying that the demand for energy is derived from the demand for real capital (Wrigley, 1962; 1990).

Notably, Kander and Stern (2012) observed that the elasticity of substitution between a capital-labour aggregate and energy remained below unity. This finding suggests that in instances of energy scarcity, the availability of energy significantly constrains output growth, potentially leading to a low-income steady state. This econometric validation aligns with Wrigley's thesis, particularly regarding the scarcity of energy in pre-industrial economies. Moreover, their analysis underscores the pivotal role of expanding energy services in driving economic growth in Sweden, particularly evident before the latter half of the twentieth century. The integration of motors as an indicator of industrialisation and structural change had been previously explored by Ole Hyldtoft (1984) in his examination of Copenhagen's industrialisation. While Hyldtoft's study does not fall within the realm of environmental history, it offers intriguing insights, such as price comparisons of human muscle power and various engines, predating Robert Allen’s (2009) theory of labour and energy costs.

Further investigations into the relationship between energy and economic growth have delved into the interplay between structural change and energy productivity. Lennart Schön (2000) and Enflo et al. (2009) employed econometric methodologies to elucidate the presence of long waves associated with energy, with subsequent research utilising cointegration analyses to explore the impact of electricity on energy productivity within the Swedish industry spanning from 1930 to 1990. The theme of energy and structural change is also explored in depth in Kander, Malanima, and Warde's book, ‘Power to the People’ (Kander et al., 2013).

As for elaborations on the transition from an organic to a mineral energy system in nordic perspective, Kunnas and Myllyntaus suggested that Finland had managed to industrialise without a transition to a fossil energy system (Kunnas & Myllyntaus, 2010). Another facet of Finnish energy history was presented by Jan Kunnas and Myllyntaus (2010), who argued that slash-and-burn cultivations on peatlands was the predominant source of carbon dioxide emissions in Finland during the nineteenth century (Kunnas, 2005). In the case of Sweden, Lindmark and Olsson Spjut (2019) assert that the country's industrialisation, predominantly reliant on forest products, was enabled by the burgeoning mineral energy system, which rendered previously inaccessible organic resources within the forests of northern Sweden economically viable, while Bladh (2020) presents new energy series for Sweden.

Regional examinations of energy transformations encompass Paul Warde's investigations into energy consumption within the Arctic region of Scandinavia (Warde, 2019a, 2019b; Warde & Lindmark, 2019). Additionally, Toivianien and Kröger (2019; Toiviainen, 2019) explored the socio-ecological changes in nineteenth-century northern Finland within the context of the capitalist world-system. Their research delves into the historically specific development of social power dynamics associated with tar production and the emergence of a distinct form of capitalism within the socio-ecological landscape of northern Finland. Toivanen's study can be seen as a continuation of prior work, such as the research conducted by Bunte et al. (1982), which examined the long-term evolution of capitalism in the small municipality of Vindeln in northern Sweden. Similarly, the tar trade in Vindeln facilitated the emergence of a localised variant of capitalism intertwined with evolving international structures, reflecting an approach inspired by the l’historie totale perspective

The Environmental Kuznets Curve

As previously mentioned, the Environmental Kuznets Curve suggests an inverted U-shaped relationship between incomes and environmental quality. This means that the relationship is dynamic and unfolds over time as a historical process.

Several studies have explicitly explored the Environmental Kuznets Curve (EKC) as a historical phenomenon, acknowledging the limitations of previous EKC analyses primarily based on cross-country or short panel datasets. The EKC, from a theoretical standpoint, represents a dynamic process unfolding over time, lending itself to historical inquiry (Lindmark, 2002).

Kunnas and Myllyntaus (2010) argued that in Finland, the EKC for sulphur emissions was influenced by technological advancements and concerns regarding potential economic damages. Similarly, Ola Honningdal-Grytten et al. (2020) demonstrated relative and absolute EKC patterns in energy consumption for Norway. In a study examining the EKC concerning water pollution in Sweden's Göta River, Rönnbäck and Granér (2016) suggested that increased awareness of the environmental impacts of different types of pollution played a pivotal role in shaping strategies to address environmental issues. Thus, Nordic historical studies underscore that improved environmental quality is not an inherent outcome of economic growth.

One mechanism potentially explaining deterministic EKC properties is structural change, particularly the emergence of a knowledge-intensive service economy alongside the gradual decline of manufacturing, leading to what has been termed ‘dematerialisation’ (Kahn, 1979). A related concept is the pollution haven hypothesis, positing that industrial location decisions are influenced by environmental regulations, resulting in the relocation of polluting industries to countries with laxer regulations (Copeland & Taylor, 2004). However, economic historical investigations in Sweden have challenged these notions. Reduced emissions were unlikely to be solely attributed to changing trade patterns (Kander & Lindmark, 2006), and the transition to a service economy did not sufficiently account for declining emissions, as it primarily reflected shifts in labour allocation and price effects known as the ‘Baumol disease’ (Kander, 2005; Henriques & Kander, 2010).

Krantz and Schön's (1983) hypothesis of generalised environmental effects stemming from structural change was consequently questioned. Additionally, the diminished use of fossil fuels in the Swedish economy following the OPEC I crisis only partially explained reductions in pollutive emissions, such as sulphur. What remained was, by definition, a technical effect. However, the nature of this technical component and its driving forces remained ambiguous. Did political instruments play a role? Had technological advancements interacted with structural change and traditional productivity-enhancing strategies? Or had an emerging sense of environmental social responsibility influenced business practices towards environmental adaptation? Exploring such questions motivated historical case studies, not the least from a business perspective.

Business history

A deeper understanding of the EKC-relationship motivated case studies on the environmental adaptation of the manufacturing industry from the late 1960s. Thus, business history perspectives, aiming at uncovering the motivations and decisions of individual firms, increasingly came to be used in ‘environmental economic history’. This actor-centric approach could provide examples on how companies responded to multifaceted signals in the 1970s, from oil prices and evolving environmental regulations to challenges, and the need for structural rationalisation imposed by the 1970s industrial crisis. At the same time, business actors played an important role in the formative 1972 UN Conference on the Human Environment held in Stockholm and the subsequent establishment of the UN Environment Programme (Huf et al., 2022).

From a Nordic historical perspective, Kristina Söderholm (2005) conducted a comparative analysis of industrial strategies during two distinct periods characterised by active environmental legislation. The first period, just prior to the First World War, saw Sweden on the brink of implementing environmental licencing systems or concession obligations for industries with significant environmental impacts, notably the pulp and paper sector. Söderholm's study revealed how this proposed legislation was perceived as a threat by the pulp and paper industry, prompting lobbying efforts against it. However, these actions fell short of effectively implementing preventive environmental measures.

In contrast, the second period examined by Söderholm, occurring at the end of the 1960s, witnessed Sweden enacting legislation similar to that proposed in the 1910s. This time, the environmental adaptation was extensive and coincided with structural rationalisations and widespread technological advancements within the paper industry. The integration of new environmental technologies was seamlessly embedded within the new real capital. Also, the transition from oil to internal biofuels, which not only directly contributed to emissions reduction but also entailed internal process changes, was heavily contingent on oil prices (Lindmark et al., 2011).

During the 1960s, Rönnskärsverken, a metal smelter owned by Boliden AB, stood as Sweden's primary source of hazardous emissions, releasing heavy metals and sulphur that contributed to acidification and environmental damage to forests and crops. However, by the mid-1990s, emissions had plummeted to a fraction of their historical levels. Ann-Kristin Bergquist (2007) examined this transformation process, revealing how the concession system struck a balance between stringent environmental regulations for licencing and the necessity for operational flexibility.

In the early 1970s, it became evident that the requisite environmental technology was unavailable abroad. Consequently, the permit review process, spanning over two decades, unfolded in tandem with long-term technological advancements. The evolution at Rönnskär echoed the Porter/van der Linde hypothesis, positing that stringent environmental legislation can foster improved factor productivity and reduced environmental impact (Porter & van der Linde, 1995).

The Swedish concession legislation exemplified a unique blend of stringency and flexibility (Bergquist & Söderholm, 2012). While strict environmental conditions were mandated for obtaining a concession, the negotiation process allowed for adaptability. This approach differed markedly from the conventional command-and-control model prevalent in American legislation. In the traditional model, legislators set emission limits, and companies calculate the cost of compliance against potential fines and risks of detection. The Swedish concession system, however, presented characteristics not encapsulated within standard environmental economic models (Bergquist et al., 2013). Still, investments in precautions against pollution could occur independently of a strong environmental legislation, as the case of Boliden in the 1920s demonstrate (Bergquist & Lindmark, 2016).

Bergquist and Söderholm delved deeper into the impact of the regulatory system on environmental adaptation within Sweden's most pollutive industrial sector, the pulp and paper industry, through a series of articles (Bergquist & Söderholm, 2016). By focusing on this industry, they elucidated how substantial environmental enhancements from the 1960s onwards could be attributed to collaborative industry-wide research and development (R&D) initiatives. This collaborative effort was bolstered by the environmental regulatory framework, which fostered long-term investments in environmental R&D and incentivised internal process improvements.

At least two main themes have played an important role in this line of research: innovation systems and Corporate Social Responsibility (CSR). For instance, Kunnas and Myllyntaus (2007, 2010) deduced that technological advancements, coupled with concerns over potential environmental and subsequent economic damages, were pivotal in influencing environmental strategies in the the Finnish pulp and paper industries. Characteristics of the Finnish innovation system was also indirectly illuminated in Elena Kochetkova and Pavel Pokid’ko’s (2019) study of the Soviet innovation system's inadequacy in addressing pollution issues in the pulp and paper industry. Eventually these shortcomings forced Soviet authorities to enlist the assistance of Finnish companies to undertake modernisation efforts at select facilities in Karelia during the 1980s.

A dynamic perspective on regulations and how business both have tried to moderate and promote emissions standards is given by Mattias Näsman’s study of motor vehicle emissions standards from the 1960s to the 1980s (Näsman, 2021; Bergquist & Näsman, 2023). One notable insight from these studies is the fact that these environmental regulatory issues were intertwined with trade policy and national industrial policy.

The Norwegian oil industry has also inspired research focusing the intersection between business, legislation, CSR and environmental trade-offs in general. Yngve Nilsen (2001) studied the Norwegian climate debate until 1998 and Kristin Asdal (2014) showed how the Norwegian ministry of finance contributed to reformulate the climate issue to an oil issue. In a similar tradition, Ekberg and Hultman (2023) have assessed of how diverse actors in the Global North intentionally and unintentionally have impeded climate measures of mitigation. Furthermore, Marten Boons (2022) has studied Norwegian oil producer Statoil during the period after 2001. CSR issues have also been an important point of departure in Ada Nissen’s works on environmental issues from the perspective of the same company (Nissen, 2021, 2024).

These dynamics were explored in a book addressing a range of topics including sulphite spirits, synthetic petrol, wood gas, methanol, and ethanol (Egan Sjölander et al., 2014). The analyses delve into the reasons why these alternative fuels were deemed urgent and desirable, while also examining the challenges and structural impediments they encountered and continue to confront.

In conclusion, the interplay between business, environment, and historical context offers a rich tapestry of narratives, each underscoring the need for a nuanced understanding of the evolution of environmental consciousness and practices in the industrial sector. A related theme which links business and the state, rather than regulation per se, is various cooperative strategies to exploit natural resources.

Natural resource nationalism and property rights

The capacity of natural resources to yield surplus income, known as natural resource rents, renders them highly coveted assets, prompting diverse stakeholders to vie for control over both the resources themselves and the associated rents (North, 1955; Westin & Eriksson, 2016). The Nordic countries serve as pertinent case studies in this context, as their industrialisation strategies initially relied on natural resource exports (Ryggvik, 2015). Control of natural resources, including property rights, monopolies protected by the state, the distribution of natural resource rents, subsidies to extractive industries and legislation protecting national economic interests from foreign competition and take-overs, therefore constitutes a crucial area of inquiry at the intersection of classical economic history and environmental economic history. Andreas Dugstad Sanders, along with Pål Sandvik and Espen Storli, have conducted research on ‘natural resource nationalism,’ examining the regulation of natural resource ownership to shield primarily extractive and energy industries from foreign competition (Sanders et al., 2019; Sandvik & Storli, 2020). This research enriches the discourse surrounding the role and motivations behind protectionism in nineteenth and twentieth century Norway and Sweden. Earlier studies on this subject include Alf W. Axelsson’s (1964) examination of the marginalisation of British business interests from the northern Swedish iron fields during the period 1855–1882

Furthermore, Sanders and Sandvik (2015) argue that the Norwegian state's historical control over hydroelectricity ownership laid the foundation for a regulatory tradition that ultimately gave rise to the creation of the ‘Oil Fund’ (Statens Pensjonsfond Utland). The natural resource curse implies that countries with an abundance of natural resources have less economic growth and less democracy than countries with fewer natural resources (Sachs & Warner, 1995). In exploring how natural resource rents are managed, Sevil Acar (2017) have compared the economic performance of Sweden and Norway since the 1970s. Acar's comparison departs from similar institutional backgrounds, but with a huge inflow of natural resource rents in the case of Norway. The main argument posits that the discovery of oil in Norway propelled the country onto a more advantageous growth trajectory compared to Sweden, despite their similar institutional backgrounds, which had historically produced comparable economic growth paths since the 1890s. Norway's ability to leverage its oil resources to enhance its industrial base, increase productivity, and invest in human capital, while Sweden grappled with the 1970s industrial crisis, illustrates how technological advancements and reliable institutions can mitigate the adverse effects of natural resource abundance. In essence, Norway's experience suggests a natural resource windfall rather than a curse (Grytten & Lindmark, 2006).

Garrett Hardin’s seminal article in 1968 on the exhaustion and degradation of resources within open-access resource systems, commonly referred to as the tragedy of the commons, serves as a foundational theoretical framework in the exploration of property rights within the field of environmental economic history. The consideration of property rights concerning natural resources is a recurring theme in numerous economic historical studies, many of which predate or contribute to the evolution of environmental history. For example, Gustaf Wieslander's work in 1936 examined the impact of charcoal consumption by the seventeenth-century Swedish iron industry on deforestation, ultimately attributing the issues to price controls and privileges rather than reckless timber felling (Wieslander, 1936). Similarly, Karl Erik Bergsten (1946) and Gunnar Arpi (1951) investigated the role of charcoal prices in forest-related conflicts, with Arpi highlighting the deregulations of the mid-nineteenth century as a factor influencing charcoal prices in Bergslagen. While these studies closely align with environmental economic history, they primarily address debates on overcutting during the early twentieth century rather than broader environmental discourses.

Among early examples of environmental history, Bunte et al. (1982) includes chapters on the formation of forest property rights in northern Sweden during the nineteenth century, while Nils Gustav Lundgren (1987) examines conflicts over natural resource control in Norrbotten. Forest property rights, particularly the political and legal processes in late nineteenth-century Northern Sweden, have also received considerable attention (Eliasson, 2002). However, studies focusing on the trade-offs between economic and ecological values within forest history have been less common.

The industrialisation of rivers and related property rights issues, such as landowners’ control over water within their properties, has been explored by Eva Jakobsson (2002), with additional research on conflicting uses of rivers for electricity production and recreation (Zimmer, 2019).

Studies of indigenous peoples in the Nordic countries, particularly the Sami people, often intersect with environmental economic history, as they frequently address aspects of livelihood and dependence on nature (Norstedt, 2018). Property rights have been a central topic, reflecting conflicts between Sami land use and national state objectives (Nahkiaisoja, 2016). Despite this proximity, many studies of Sami subsistence do not adopt an economic-historical academic discourse. However, the explicit application of institutional theory could offer new narratives and interpretations within this field.

Nevertheless, the primary focus of the studies lies in cultural and institutional change, rather than qualifying as fully-fledged environmental economic history, which typically incorporates an environmental economic institutional framework or addresses how property rights impact depletion and degradation within a historical context. This distinction delineates environmental economic historical studies from standard economic historical studies on agriculture, fisheries, and extractive industries, including their institutional dimensions.

From a regulatory perspective, Scott Gordon’s (1954) discussion on the role of poorly defined property rights as a cause of overfishing, served as one theoretical point of departure in Hrefna Karlsdottir's (2005) study on the international regulation of North Sea herring fisheries. Drawing on Ellinor Ostrom's (Ostrom, 1990) Nobel Prize-winning work on the evolution of institutions for collective action, Karlsdottir emphasised the significance of international arenas and organisations, highlighting the historical dimensions of effectively managing common resources.

Discussion

This overview has demonstrated that over the past two decades, Nordic economic historians have significantly contributed to a field of inquiry which may be labelled as ‘environmental economic history.’ This approach seeks to explore environmental historical and economic historical issues through an economic lens. As we contemplate the future development of this field, several critical factors come into play.

The success of environmental economic history hinges on how adept economic historians are at formulating theoretically relevant problems. By employing historical methodologies, researchers can generate outcomes that resonate with various stakeholders. These stakeholders include not only fellow historians constructing broader narratives but also academics from other disciplines, policymakers grappling with regulatory challenges and business practitioners striving to sustain a return on investments. Attracting the attention of fellow economic historians depends on whether environmental economic history can provide arguments which illuminates other economic historical issues, such as the industrial revolution.

At its core, and as defined in this article, environmental economic history presupposes a foundation in economic theory. By examining environmental history through this lens, we gain insights into the intricate interplay between economic forces and environmental dynamics. Researchers delve into macroeconomic phenomena such as economic growth, structural change, and innovation systems. Simultaneously, they conduct actor-oriented studies, scrutinising decision-making processes within firms, and adopt neo-institutional approaches to explore regulatory mechanisms.

The reception of future environmental economic history depends on if it primarily resonates with fellow economic historians, or does it find a more receptive audience among other academics, policymakers, and practitioners? While traditional economic history journals have occasionally hosted studies in environmental economic history, they are often found in environmental economics or policy and governance-oriented journals. This publication pattern may, if correct, suggest a bias toward contemporary history and events. Thus, the ability to provide meaningful historical perspectives on contemporary issues will significantly shape the trajectory of this field, not the least as researchers try to balance temporal bias and contemporary and historical relevance.

For these reasons, it is likely that future developments in ‘environmental economic history’ are shaped by contemporary issues and historians’ ability to provide theoretically relevant historical perspectives on the environmental issues. One such issue for future research could be past energy dependencies, conflict, and geopolitical dynamics. Per Högselius’ (2013) work on Europe’s reliance on Soviet and Russian gas is one example on how energy security can be investigated by using a historical political economy approach.

Another opportunity is a resurgence of interest in the Kondratieff cycle, proposed by scholars like Krantz and Schön (1983), which suggests a need for reassessment of the original chronology, particularly considering contemporary trends such as the green investment boom in Nordic countries. Reassessing the entire structural change pattern proposed by Krantz and Schön is therefore a possible future issue in environmental economic history. Economic historians have also suggested shifting economic roles played by the state and business during transformative periods as compared to structurally stable periods. Economic planning, a powerful tool for structural change in the post-war period, is possibly making a comeback to facilitate the current green transition. John Hassler’s (2023) report on Swedish climate policy hints at these questions, but a systematic exploration is warranted.

Finally, it is important to recognise that environmental problems, when examined historically, need not always to rely on environmental empirical cases and examples. Often, environmental problems of the past differ significantly in terms of economic-political context, environmental impact and technology from contemporary issues, especially global warming. This may limit the relevance of the historical case for understanding the challenges of today. Environmental economic history should formulate its problems based on theory. For instance, within the field of environmental economics, there is a prevailing consensus that the most effective and pragmatic policy tool for addressing global warming is carbon pricing, ideally implemented through a system of global emission trading. However, despite this consensus, the significant market failure of global warming remains largely uncorrected. Anthropogenic global warming has, however, no historical counterpart which needed global emission trading to be corrected. So, what can be learned from Clio?

In this context, environmental economic history should not confine itself to the relatively short history of carbon regulation attempts; environment, social, and governance (ESG) monitoring; greenwashing and corporate social responsibility. Instead, environmental economic history should delve into examples that illuminate how societies have historically grappled with collective action problems. Global warming is new, collective action problems are not. In essence, the study of environmental economic history must commence with a solid grounding in economic theory.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by Riksbankens Jubileumsfond: [Grant Number M22-0029].