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Synergies and Trade-offs between Climate and Local Air Pollution: Policies in Sweden

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Author Info

  • Bonilla, Jorge

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Coria, Jessica

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Sterner, Thomas

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

In this paper, we explore the synergies and tradeoffs between abatement of global and local pollution. We built a unique dataset of Swedish heat and power plants with detailed boiler-level data 2001-2009 on not only production and inputs but also emissions of CO2 and NOx. Both pollutants are subject to strict policies in Sweden. CO2 is subject to multiple levels of governance using environmental instruments such as the EU ETS and Swedish carbon taxes; NOx – as a precursor of acid rain and eutrophication – is regulated by a heavy fee. Using a quadratic directional output distance function, we characterize changes in technical efficiency as well as patterns of substitutability in response to the policies mentioned. The fact that generating units face a trade-off between the pollutants indicates a need for policy coordination.

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File URL: http://hdl.handle.net/2077/29167
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 529.

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Length: 34 pages
Date of creation: 30 Apr 2012
Date of revision:
Handle: RePEc:hhs:gunwpe:0529

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: Interaction of environmental policies; shadow pricing; directional distance function; climate change; local pollution.;

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