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Emissions Trading and Profitability: The Swedish Pulp and Paper Industry


  • Runar Brannlund

    (Univ. of Umea)

  • Yangho Chung

    (S. Illinois Univ. at Carbondale)

  • Rolf Fare

    (S. Illinois Univ. at Carbondale)

  • Shawna Grosskopf

    (S. Illinois Univ. at Carbondale)


The purpose of this paper is to develop models with and without emissions trading and to compare industry profits under the two regimes. The model in which emissions trading is permitted is a nonparametric industry frontier model in the spirit of Fare, Grosskopf and Li (1992). It is relative to this model that industry profit is computed. This profit is compared to the profit without emissions trading to give an estimate of the potential gains that can be realised by allowing for emissions trading. The model, which is applied to data for the Swedish pulp and paper industry, thus provides evidence as to the cost efficiency of the prevailing individual regulations for this particular industry.

Suggested Citation

  • Runar Brannlund & Yangho Chung & Rolf Fare & Shawna Grosskopf, 1995. "Emissions Trading and Profitability: The Swedish Pulp and Paper Industry," Others 9506001, EconWPA.
  • Handle: RePEc:wpa:wuwpot:9506001
    Note: Scientific Workplace, Pentium PC, HP 4/MV (postscript), pages: 14; figures: none; tables: 5 (in body). Two files were FTP'ed: binary .dvi and ASCII input file. Paper was compiled for A4 paper, but there is no loss printing to letter.

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    References listed on IDEAS

    1. Fare, Rolf & Grosskopf, Shawna & Li, Sung-Ko, 1992. " Linear Programming Models for Firm and Industry Performance," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(4), pages 599-608.
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    Cited by:

    1. Yangho Chung & Rolf Fare, 1995. "Productivity and Undesirable Outputs: A Directional Distance Function Approach," Microeconomics 9511002, EconWPA, revised 09 Nov 1995.

    More about this item


    environmental economics; natural resource economics; industry;

    JEL classification:

    • P - Economic Systems
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Z - Other Special Topics


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