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Subsidies, But for What? A Comparative Look at Finland’s Green Subsidies

Author

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  • Wang, Maria
  • Kässi, Otto
  • Kuusi, Tero

Abstract

This brief examines environmental and energy-related business subsidies in Finland and compares them with those in other EU countries. In Finland, subsidies are concentrated on tax concessions and preservation-oriented support for which there is limited amount of research, and the existing studies show limited effectiveness. By contrast, investment and innovation subsidies, which potentially have a greater potential to accelerate the green transition, make up a smaller share of the overall support. Internationally, Finland stands out with a high level of subsidies, but structurally it differs from, for example, Germany, where the emphasis is on direct investment support. The analysis suggests that redirecting subsidies from tax concessions towards conditional, impact-oriented instruments could better support permanent emission reductions, technological development and economic renewal.

Suggested Citation

  • Wang, Maria & Kässi, Otto & Kuusi, Tero, 2025. "Subsidies, But for What? A Comparative Look at Finland’s Green Subsidies," ETLA Brief 163, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:briefs:163
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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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