Eva Samakovlis

Carbon prices and incentives for technological development.

There is concern that the carbon prices generated through climate policies are too low to create the incentives necessary to stimulate technological development. This paper empirically analyzes how the Swedish carbon dioxide (CO2) tax and the European Union emission trading system (EU ETS) have affected productivity development in the Swedish pulp and paper industry 1998-2008. A Luenberger total factor productivity (TFP) indicator is computed using data envelopment analysis. The results show that climate policy had a modest impact on technological development in the pulp and paper industry, and if significant it was negative. The price of fossil fuels, on the contrary, seems to have created important incentives for technological development. Hence, the results suggest that the carbon prices faced by the industry through EU ETS and the CO2 tax have been too low. Even though the data for this study is specific for Sweden, the models and results are applicable internationally. When designing policy to mitigate CO2 emissions, it is vital that the policy creates a carbon price that is high enough - otherwise the pressure on technological development will not be sufficiently strong.

The Relationship between Waste Paper and Other Inputs in the Swedish Paper Industry

A number of life-cycle assessment studies havecompared the environmental impacts of materialrecycling and incineration of waste paper. Theyhave shown that, in most cases, a recyclingscenario results in lower total energy use, butgreater use of fossil fuels. If waste paper andfossil fuels are complements, parts of theenvironmental argument for recycling isabolished. This paper estimates a cost functionfor the Swedish paper industry. If the costshares are co-integrated, an error correctionmodel will be used to model the dynamics.Short- and long-run elasticities are thencalculated to address the relationship betweenwaste paper and the other inputs: capital,labor, purchased pulp, fiber, fossil fuels andelectricity. Contrary to the life-cycleassessment studies, the results show that wastepaper and fossil fuels are substitutes, andthat waste paper and electricity arecomplements.

Revaluing the hierarchy of paper recycling

This article revalues the hierarchy of paper waste management policies in a dynamic general equilibrium model. Incineration, material recycling and the distinction between non-renewable fossil fuels and renewable forest assets are incorporated. By comparing the first order conditions from the command optimum with the conditions from the market model, it is discovered that the unregulated market fails to create an optimal resource allocation. To see how the market behaves, in absence of environmental policy, compared to the first best solution a numerical model is used. Pigouvian taxes and subsidies are derived to correct for the externalities.

How are Green National Accounts Produced in Practice

During the last part of the twentieth century, the effect of human activity upon the environment became an important policy issue. There is now a growing concern about how economic activity affects the environment and it has become more and more recognised that economic growth is dependent upon the provision of environ-mental services. To be able to combine economic growth with a healthy environment in terms of a sustainable use of natural resources, a better understanding of the rela-tionships between economy and ecology needs to be developed.

Linking health and productivity impacts to climate policy costs: a general equilibrium analysis

Much of the debate on global climate change has focused on direct costs of mitigation. Recently this debate has included the issue of ancillary benefits. The present analysis incorporates a linkage between air pollution and ancillary health benefits into a general equilibrium model applied to Sweden. Direct disutility and indirect health effects are modelled using concentration-response and contingent valuation data. Health benefits are compared in three scenarios for attaining the Swedish carbon dioxide target with alternative projected and harmful emission levels. Results show that the costs of climate policy could be overstated when not accounting for ancillary health benefits.

Does remediation save lives? - on the cost of cleaning up arsenic-contaminated sites in Sweden.

Sweden has only just begun remediation of its many contaminated sites, a process that will cost an estimated SEK 60,000 million (USD 9100 million). Although the risk assessment method, carried out by the Swedish EPA, is driven by health effects, it does not consider actual exposure. Instead, the sites are assessed based on divergence from guideline values. This paper uses an environmental medicine approach that takes exposure into account to analyse how cancer risks on and near arsenic-contaminated sites are implicitly valued in the remediation process. The results show that the level of ambition is high. At 23 contaminated sites, the cost per life saved varies from SEK 287 million to SEK 1,835,000 million, despite conservative calculations that in fact probably underestimate the costs. It is concluded that if environmental health risks are to be reduced, there are probably other areas where economic resources can be used more cost-effectively.

Can we buy time? Evaluation of the Swedish government's grant to remediation of contaminated sites

The major aim of this paper is to analyze how government funding affects the pace of progress in four states of the remediation process of contaminated sites, from basic risk classification to cleanup. We introduce a methodological framework that takes into account the unobserved site-heterogeneity and simultaneously models duration in the different states. The results show that although site-heterogeneity contributes to make remediation a slow process, the third state, from the elaborate risk classification to the cleanup start, is a particular bottleneck. Even if government funding can speed up the process at this state, the effect is minuscule compared to the amounts of funding required. Thus, there is a need for policy to also focus on other barriers to remediation.

Reuse or Burn? : Evaluating the Producer Responsibility of Waste Paper

In 1992, Sweden introduced a producer responsibility ordinance which explicitly states that sorted out, collected waste paper must be material recycled. Another alternative could be to recover energy by incineration. Material recycling was prioritized, although there is no environmental consensus favouring either of the alternatives. By calculating shadow prices of waste paper for the paper industry and for the heating plants, this study tries to determine whether waste paper should be partly incinerated. The study also addresses whether the producer responsibility has contributed to an inefficient allocation of waste paper. The results find no economic support for the producer responsibility.