Swedish Industry and Kyoto An Assessment of the Effects of the European CO2 Emission Permit Trading System
AbstractWe assess the effects on Swedish industry input and output demands of different climate policy scenarios connected to energy policy induced by the Kyoto protocol. A unique data set containing firm level data on outputs and inputs during the years 1991 – 2001 is used to estimate a factor demand model, which is then simulated for different policy scenarios. Sector specific estimation suggests that the proposed quadratic profit function specification exhibit properties and robustness that are consistent with economic theory; that is, all own-price elasticities are negative and all output elasticities are positive. Furthermore, the elasticities show that the input demands are, in most cases, relatively inelastic. Simulation of the model for 6 different policy scenarios reveal that the effects on Swedish base industry of a EU level permit trade system is dependent on (i) removal or no removal of current CO2 tax, (ii) the established price of permits, and (iii) what will happen to the electricity price. Our analysis show that changes in electricity price may be more important than the price of permits for some sectors.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Swedish University of Agricultural Sciences, Department of Forest Economics in its series Working Paper Series with number 06/01.
Length: 32 pages
Date of creation: 03 Mar 2006
Date of revision:
Contact details of provider:
Postal: Department of Forest Economics, Swedish University of Agricultural Sciences, SE 901 83 Umeå, Sweden
Phone: 090-786 62 68
Fax: 090-786 60 73
Web page: http://www.sekon.slu.se
More information through EDIRC
CO2-emissions; factor demand; fossil fuels; tradable permit market;
Other versions of this item:
- Brännlund, Runar & Lundgren, Tommy, 2005. "Swedish Industry and Kyoto – An Assessment of the Effects of the European CO2 Emission Permit Trading System," UmeÃ¥ Economic Studies 668, Umeå University, Department of Economics.
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-18 (All new papers)
- NEP-ENE-2006-03-18 (Energy Economics)
- NEP-ENV-2006-03-18 (Environmental Economics)
- NEP-INT-2006-03-18 (International Trade)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Hill & Bengt Kristöm, 2002. "Sectoral EU-trading and other Climate Policy Options: Impacts on the Swedish Economy," Working Paper Series 02/328, Swedish University of Agricultural Sciences, Department of Forest Economics.
- Lau, Lawrence J, 1972. "Profit Functions of Technologies with Multiple Inputs and Outputs," The Review of Economics and Statistics, MIT Press, vol. 54(3), pages 281-89, August.
- Brännlund, Runar & Lundgren, Tommy, 2001.
"A Dynamic Analysis of Interfuel Substitution for Swedish Heating Plants,"
UmeÃ¥ Economic Studies
550, Umeå University, Department of Economics.
- Brannlund, Runar & Lundgren, Tommy, 2004. "A dynamic analysis of interfuel substitution for Swedish heating plants," Energy Economics, Elsevier, vol. 26(6), pages 961-976, November.
- Charlotte Nilsson & Bengt Kristöm, 2002. "The Costs of Going from Kyoto to Marrakech: Swedish Carbon Policy in a Multi-Regional Model," Working Paper Series 02/327, Swedish University of Agricultural Sciences, Department of Forest Economics.
- Lau, Lawrence J., 1976. "A characterization of the normalized restricted profit function," Journal of Economic Theory, Elsevier, vol. 12(1), pages 131-163, February.
- Lundgren, Tommy & Sjostrom, Magnus, 2001. "A flexible specification of adjustment costs in dynamic factor demand models," Economics Letters, Elsevier, vol. 72(2), pages 145-150, August.
- Hammar, Henrik & Lundgren, Tommy & Sjöström, Magnus, 2006. "The significance of transport costs in the Swedish forest industry," Working Paper 97, National Institute of Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Örjan Furtenback).
If references are entirely missing, you can add them using this form.