Assessment of the Macro-Economic Effects of Domestic Climate Policies for Finland

Heikki Kemppi, Adriaan Perrels and Antti Lehtilä

No 82, Research Reports from VATT Institute for Economic Research

Abstract: This is the final report on macro-economic cost assessment of a domestic climate policy programme for Finland. The core assessment work was done with an energy systems model (EFOM) soft linked with a macro-economic model (KESSU). The study was carried out in co-operation with VTT Energy. The policy programme consisted of both pricing measures and prescriptions. From an engineering-economic viewpoint the use of more nuclear looks economically advantageous, but from a macro-economic viewpoint the advantage is less prominent. Use of energy taxes combined with tax recycling seems from a macro-economic viewpoint less harmful than a purely prescriptive programme. Macro-economic cost of a purely domestic policy package for the first commitment period amount to about 0,5% of Finnish GDP in 2010. The study was financed by the ministries of Trade and Industry, Environment and VATT/Ministry of Finance.

Keywords: Climate policy; assessment; carbon tax; energy tax; Energy; Energia; Environment; Ympäristö; Taxation; Verotus; Labor market and policies promoting economic growth; Työmarkkinat ja kasvua tukeva politiikka; H200 - Taxation; Subsidies; and Revenue: General; Q400 - Energy: General; Q500 - Environmental Economics: General (search for similar items in EconPapers)
Date: 2001
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