The Excess Cost of Supplementary Constraints in Climate Policy: The Case of Sweden’s Energy Intensity Target

Thomas Broberg (), Tomas Forsfält () and Göran Östblom
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Thomas Broberg: National Institute of Economic Research, Postal: National Institute of Economic Research, P.O. Box 3116, SE-103 62 Stockholm, Sweden
Tomas Forsfält: National Institute of Economic Research, Postal: National Institute of Economic Research, P.O. Box 3116, SE-103 62 Stockholm, Sweden
Göran Östblom: National Institute of Economic Research

No 123, Working Papers from National Institute of Economic Research

Abstract: From the perspective of climate policy, a target for energy efficiency could imply costly overlapping regulation. We estimate, using a computable general equilibrium model of the Swedish economy, the potential economic cost of attaining the national 2020 energy intensity target by means of tax policy instruments. Our analysis shows that the efforts to meet the energy intensity target will also reduce carbon dioxide emissions, but at excessive costs compared to alternative climate policy instruments. Moreover, attainment of the energy intensity target will call for policy instruments additional to those needed for fulfilling the national climate policy target. The results are sensitive to the development of the nuclear energy production as the definition of energy intensity includes conversion losses in electricity production

Keywords: climate policy; energy efficiency; carbon tax; overlapping regulation; general equilibrium; Sweden (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011-06-01
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-env, nep-reg and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:nierwp:0123

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