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

Author

Listed:
  • 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.

Suggested Citation

  • Bonilla, Jorge & Coria, Jessica & Sterner, Thomas, 2012. "Synergies and Trade-offs between Climate and Local Air Pollution: Policies in Sweden," Working Papers in Economics 529, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0529
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    File URL: http://hdl.handle.net/2077/29167
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    References listed on IDEAS

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    Cited by:

    1. Coria, Jessica & Jaraite, Jurate, 2015. "Carbon Pricing: Transaction Costs of Emissions Trading vs. Carbon Taxes," Working Papers in Economics 609, University of Gothenburg, Department of Economics.

    More about this item

    Keywords

    Interaction of environmental policies; shadow pricing; directional distance function; climate change; local pollution.;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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