Synergies and Trade-offs between Climate and Local Air Pollution: Policies in Sweden

Jorge Bonilla Londoño, Jessica Coria and Thomas Sterner

No 529, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: In this paper, we explore the synergies and tradeoffs between abatement of global and local pollution. We built a unique dataset of Swedish heat and power plants with detailed boiler-level data 2001-2009 on not only production and inputs but also emissions of CO2 and NOx. Both pollutants are subject to strict policies in Sweden. CO2 is subject to multiple levels of governance using environmental instruments such as the EU ETS and Swedish carbon taxes; NOx – as a precursor of acid rain and eutrophication – is regulated by a heavy fee. Using a quadratic directional output distance function, we characterize changes in technical efficiency as well as patterns of substitutability in response to the policies mentioned. The fact that generating units face a trade-off between the pollutants indicates a need for policy coordination.

Keywords: Interaction of environmental policies; shadow pricing; directional distance function; climate change; local pollution. (search for similar items in EconPapers)
JEL-codes: H23 L51 L94 L98 Q48 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2012-04-30
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur and nep-res
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Citations: View citations in EconPapers (2)

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