Henrik Hammar

Environmental taxation for good and for bad: the efficiency and legitimacy of Sweden's carbon tax

The apparent unpopularity of the Swedish carbon tax on fuels for passenger cars is examined in relation to alternative climate policy measures to decrease carbon emissions from private transport. Using original survey data, it is found that the carbon tax may not be as unpopular as is typically conjectured. Differently put, its (un)popularity is partly determined by how it is framed in todays debate on how society should combat climate change. It is also found that since the total social cost of combating climate change may actually increase as a result of replacing the carbon tax with alternatives, e.g. subsidised green fuels and expanded public transportation, there is a rationale for informing the public about the costs of those policy alternatives. If it is desirable to implement environmental taxes or to increase existing ones, they should perhaps be framed differently than they are today. One suggestion is to present the taxes in relation to the alternatives, where the means to finance them are given along with comparisons of both their likely effects on emissions and their private and social costs.

Incentive-based regulation of CO2 emissions from international aviation

We explore the possibilities of using incentive-based environmental regulations of CO2 emissions from international civil aviation. In theory incentive-based instruments such as an emission charge or a tradable emission permit system are better regulations than so-called command-and-control regulations such as emission limits or technology standards. However, the implementation of these instruments is a complex issue. We therefore describe and discuss how an emission charge and a tradable emission permit system for international aviation should be designed in order to improve efficiency. We also compare these two types of regulations. In brief, we find that an emission charge and a tradable emission permit system in which the permits are auctioned have more or less the same characteristics. The main advantage of a tradable emission permit system is that the effect, in terms of emission reductions, is known. On the other hand, we show that under uncertainty an emission charge is preferred. The choice of regulation is a political decision and it does not seem likely that an environmental charge or a tradable emission permit system would be implemented without consideration of the costs of the regulation. Revenue-neutral charges or gratis distribution of permits would, for this reason, be realistic choices of regulations. However, such actions are likely to result in less stringent regulations and other negative welfare effects.

THE PHASE-OUT OF LEADED GASOLINE IN THE EU: A SUCCESSFUL FAILURE?

The objective of this paper is to analyze in both descriptive and econometric terms the phase-out of leaded gasoline consumption in the EU countries. The phase-out process is characterized by increased consumption of unleaded gasoline. We analyze the importance of price differences, share of catalytic converters, income per capita, and country characteristics in the phase-out process. Since the expected maintenance costs of using unleaded gasoline in cars without catalytic converters compared to the use of leaded gasoline differ insignificantly according to available evidence, and consumers still use leaded gasoline even though unleaded gasoline is cheaper; we interpret this as a lack of reliable information. The results indicate that countries, which have not yet phased out leaded gasoline, should do this by either banning leaded gasoline or by increasing the tax differential between leaded and unleaded gasoline depending on the objective of the social planner.

The kilometer tax and Swedish industry–effects on sectors and regions

An introduction of a kilometer tax for heavy goods vehicles can be constrained by the risk of that higher production costs than competitors in other countries will negatively affect regions and industries of policy concern. We estimate factor demand elasticities in the Swedish manufacturing industry using firm level data for the 1990 to 2001 period on input prices and quantities. The results show that the introduction of a kilometer tax for heavy goods vehicles decreases transport demand and increases labour demand. The effects are less pronounced in terms of changes in output, though some industries (e.g. wood, pulp and paper) can be expected to be affected more than others due to their dependence on road freight transport. The regional dimension regarding the consequences of a kilometer tax seems to be small or even nonexisting.

Incorporating environmental institutions in environmental policy: changing behaviour by decisive information

In this paper, I discuss, from a policy perspective, the relation between environmental institutions and transaction costs. I stress the importance of environmental institutions in providing decisive information, i.e. information that induces changes in behaviour, and thereby facilitates environmentally sound choices. If the objective is to put the economy on a sustainable path, I suggest that environmental institutions are one efficient means to loosen informational and political constraints in environmental policy, and, hence, that investment in environmental institutions is justified. The rationale is that environmental institutions direct the economy to a path where percentage growth in GDP is less wasteful. Expressions of environmental institutions - consumer awareness, producer responsibility and environmental organisations - are also discussed in order to make the discussion more tangible, i.e. how these provide decisive information.