Incentives and outcomes: Evaluation of a Swedish environmental subsidy programme

Maria Vredin

Journal of Environmental Planning and Management, 2007, vol. 50, issue 3, 343-362

Abstract: This paper empirically evaluates a Swedish government subsidy to environmental sustainability, the Local Investment Programme (LIP). During the programme period, 1998 - 2002, more than 670 million was granted to 1814 different municipal projects, making it the largest Swedish subsidization to ecological sustainability to date. For the 682 projects evaluated here, it was found that the projects were rewarded smaller subsidies than granted. To explain the gap between granted and rewarded subsidies, the gap was decomposed into a quantity effect, depending on the quantified environmental and employment outcomes of the projects, and a price effect, depending on the government's valuation of these outcomes. Whereas no statistically significant quantity effect was found, there was a large statistically significant price effect, indicating that the government paid the municipalities less than promised in the granting decision.

Date: 2007
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DOI: 10.1080/09640560701261646

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