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Ancillary benefits of climate policy in a small open economy: The case of Sweden

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  • Krook Riekkola, Anna
  • Ahlgren, Erik O.
  • Söderholm, Patrik

Abstract

It is increasingly recognised that GHG reduction policies can have important ancillary benefits in the form of positive local and regional environmental impacts. The purpose of this paper is to estimate the domestic ancillary pollution benefits of climate policy in Sweden, and investigate how these are affected by different climate policy designs. The latter differ primarily in terms of how the country chooses to meet a specific target and where the necessary emission reductions take place. The analysis relies on simulations within the energy system optimisation model TIMES-Sweden, and focuses on four non-GHG pollutants: Nitrogen Oxides (NOX), Non Methane Volatile Organic Compounds (NMVOC), inhalable particles (PM2.5), and Sulphur dioxide (SO2). The simulations permit detailed assessments of the respective technology and fuel choices that underlie any net changes in the estimated ancillary effects. The results indicate that the ancillary benefits constitute a far from insignificant share of total system costs, and this share appears to be highest in the scenarios that entail the largest emission reductions domestically. This result reflects the fact that carbon dioxide emission reductions abroad also implies a lost opportunity of achieving substantial domestic welfare gain from the reductions of regional and local environmental pollutants.

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  • Krook Riekkola, Anna & Ahlgren, Erik O. & Söderholm, Patrik, 2011. "Ancillary benefits of climate policy in a small open economy: The case of Sweden," Energy Policy, Elsevier, vol. 39(9), pages 4985-4998, September.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:9:p:4985-4998
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Riekkola, Anna Krook & Berg, Charlotte & Ahlgren, Erik O. & Söderholm, Patrik, 2013. "Challenges in Soft-Linking: The Case of EMEC and TIMES-Sweden," Working Papers 133, National Institute of Economic Research.
    2. Seljom, Pernille & Lindberg, Karen Byskov & Tomasgard, Asgeir & Doorman, Gerard & Sartori, Igor, 2017. "The impact of Zero Energy Buildings on the Scandinavian energy system," Energy, Elsevier, vol. 118(C), pages 284-296.
    3. Milan Ščasný & Emanuele Massetti & Jan Melichar & Samuel Carrara, 2015. "Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 383-415.
    4. repec:eee:enepol:v:106:y:2017:i:c:p:85-102 is not listed on IDEAS
    5. Hildingsson, Roger & Johansson, Bengt, 2016. "Governing low-carbon energy transitions in sustainable ways: Potential synergies and conflicts between climate and environmental policy objectives," Energy Policy, Elsevier, vol. 88(C), pages 245-252.
    6. Balderas Torres, Arturo & MacMillan, Douglas C. & Skutsch, Margaret & Lovett, Jon C., 2015. "Reprint of ‘Yes-in-my-backyard’: Spatial differences in the valuation of forest services and local co-benefits for carbon markets in México," Ecological Economics, Elsevier, vol. 117(C), pages 283-294.
    7. Balderas Torres, Arturo & MacMillan, Douglas C. & Skutsch, Margaret & Lovett, Jon C., 2015. "‘Yes-in-my-backyard’: Spatial differences in the valuation of forest services and local co-benefits for carbon markets in México," Ecological Economics, Elsevier, vol. 109(C), pages 130-141.
    8. Kiula, Olga & Markandya, Anil & Ščasný, Milan & Menkyna Tsuchimoto, Fusako, 2014. "The Economic and Environmental Effects of Taxing Air Pollutants and CO2: Lessons from a Study of the Czech Republic," MPRA Paper 66599, University Library of Munich, Germany, revised Oct 2015.

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