Annegrete Bruvoll

Greenhouse gas emissions in Norway Do carbon taxes work

During the last decade, Norway has carried out an ambitious climate policy. The main policy tool is a relatively high carbon tax, which was implemented already in 1991. Data for the development in CO2 emissions since then provide a unique opportunity to evaluate carbon taxes as a policy tool. To reveal the driving forces behind the changes in the three most important climate gases, CO2, methane and N2O in the period 1990-1999, we decompose the actually observed emissions changes, and use an applied general equilibrium simulation to look into the specific effect of carbon taxes. Although total emissions have increased, we find a significant reduction in emissions per unit of GDP over the period due to reduced energy intensity, changes in the energy mix and reduced process emissions. Despite considerable taxes and price increases for some fuel-types, the carbon tax effect has been modest. While the partial effect from lower energy intensity and energy mix changes was a reduction in CO2 emissions of 14 percent, the carbon taxes contributed to only 2 percent reduction. This relatively small effect relates to extensive tax exemptions and relatively inelastic demand in the sectors in which the tax is actually implemented.

Factors Behind the Environmental Kuznets Curve. A Decomposition of the Changes in Air Pollution

The environmental Kuznets curve theory suggeststhat economic growth in the long run may reduceenvironmental problems. In this article, we usea decomposition analysis to isolate eightdifferent factors, in order to investigate theorigins of changes in emissions to air over theperiod from 1980 to 1996. Among these factorsare economic growth, changes in the relativesize of production sectors and changes in theuse of energy. Given constant emissions perproduced unit, economic growth alone would havecontributed to a significant increase in theemissions. This potential degradation of theenvironment has been counteracted by first ofall more efficient use of energy and abatementtechnologies. In addition, the substitution ofcleaner for polluting energy types and othertechnological progressions and politicalactions have reduced the growth in emissions.Consequently, the growth in all emissions hasbeen significantly lower than economic growth,and negative for some pollutants.The results indicate that policymakers mayreduce emissions considerably through creatingincentives for lower energy use andsubstitutions of environmental friendly forenvironmental damaging energy types, inaddition to support environmental friendlyresearch or to conduct direct emission reducingactions, such as abatement requirements orbanning of environmental damaging products.This is particularly relevant to countries andsectors with relatively high energy intensitiesand low pollution abatement.

Households’ recycling efforts

Abstract Households’ recycling effort is often argued to be of an insignificant size. It is also frequently argued that this contribution, if significant, is not a cost to households, since it is voluntary. Thus households’ use of time and energy are frequently disregarded in cost-benefit analyses of stricter recycling targets. In this survey, based on 1162 interviews, we find that sorting at source involves significant extra use of time and energy in the households. On average, each of those asked reported that they use close to half an hour a week for cleaning, sorting and transporting recyclable waste. On average, 185 h is used per tonne of waste. Four out of ten reported that they use warm or hot water to clean the materials. When investigating the motives for sorting waste, we find that many perceive sorting as mandatory, while some in fact find it a pleasant activity in itself. Moral motives for sorting at source are also widespread. A majority would prefer that a company took over the sorting if this were possible, and on average, the respondents are willing to pay US

The Cold Shiver of Not Giving Enough: On the Social Cost of Recycling Campaigns

20/year for this service.

Quantifying central hypotheses on Environmental Kuznets Curves for a rich economy : a computable general equilibrium study

Governments sometimes try to increase individuals’ contributions to public goods through appeals to consumer responsibility, rather than by economic incentives, for example in recycling campaigns. Using standard consumer theory, one would hardly expect such campaigns to work at all; but if consumers are motivated by norms, appeals may work through changing consumers’ perception of the norm requirement. However, increasing voluntary contributions through appeals may come at a social cost. The reason is that appeals work through imposing a heavier (perceived) responsibility on consumers. This represents a welfare loss, which is not necessarily outweighed by “warm glow” benefits. (JEL D6, Q24)

Future waste generation forecasts on the basis of a macroeconomic model

We investigate whether the future relationships between several pollutants and per capita income in rich countries may assume the inverted U-forms of Environmental Kuznets Curves (EKC). The emission-augmenting effect of scaling up aggregate economic activity can be counteracted by greener composition of production and consumption, technological progress, and increased demand for environmental quality and policy. To quantify the importance of these central hypotheses, we use a CGE model with endogenous policy for Norway. Our results suggest significant future effects of all these three counteracting mechanisms. For most local and regional pollutants, they may be strong enough to prolong the falling emission trends. However, we cannot rely on reductions in emissions of climate gases and some transport-related local pollutants. Our results also indicate that pollution leakages abroad are likely to take place. Copyright (c) Scottish Economic Society 2003.

Environmental drag: evidence from Norway

Abstract Generation of solid waste is closely correlated to the use of tangible factor inputs and the production levels. In this paper, we present projections of waste generated in the Norwegian manufacturing industry based on key economic variables simulated by a computable general equilibrium model. Over the simulation period material input becomes relatively cheaper than labour and energy, thereby making it profitable to substitute materials for other factor inputs. This substitution effect is a general equilibrium effect mainly due to Hicks-neutral technological change at the industry level, dominating the direct material saving impact of technological progress in most production sectors. Thus, generated solid waste rises over the simulation period, both in terms of per unit produced and per capita. The analysis forecasts an increase in waste generated over the period to 2010 in the range of 45–110%, depending on the type of waste.

Green Throughput Taxation: Environmental and Economic Consequences

Abstract Economic growth affects the environment negatively. A polluted environment and other environmental constraints reduce economic output and the well-being of consumers. The cost to society of environmental constraints may be called the environmental drag. The traditional economic analysis of growth neglects the environmental drag, while this paper attempts to measure it empirically. We employ a dynamic general equilibrium model of the Norwegian economy, extended to include some important environmental linkages, which feed back to the productivity of labor and capital from damages to health, materials and nature. The environment also directly affects the consumers’ well-being. Using this model, we are able to estimate the environmental drag, measured as reduced welfare from consumption and environmental services. We present macroeconomic effects in terms of reduced production and consumption, and calculate the overall welfare effects. We find that the environmental constraints incorporated in the model probably have a modest effect on production over the next century. The direct welfare loss from a degraded environmental quality, however, is significant. A lower rate of technological growth and a lower discount rate both increase the drag.

Reform of environmentally harmful subsidies: distributional issues

According to optimal taxation theory, raw materials should be taxed to capture the embedded scarcity rent in their value. To reduce both natural resource use and the corresponding emissions, or the throughput in the economic system, the best policy may be a tax on material inputs. As a first approach to throughput taxation, this paper considers a tax on intermediates in the framework of a dynamic computable general equilibrium model with environmental feedbacks. To balance the budget, payroll taxes are reduced. As a result, welfare indicators as material consumption and leisure time consumption are reduced, while on the other hand all the environmental indicators improve.

The financial crisis and fiscal consolidation in green budgets

According to the International Monetary Fund (IMF, 2013) global subsidies on energy amounted to US