Scandinavian Working Papers in Economics
Umeå Economic Studies,
Umeå University, Department of Economics
No 518: Too Hot to Handle? Benefits and costs of stimulating the use of biofuels in the Swedish Heating Sector
Runar Brännlund () and Bengt Kriström ()
Additional contact information
Runar Brännlund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Bengt Kriström: Department of Forest Economics, Postal: The Swedish University of Agricultural Sciences, S 901 83 Umeå, Sweden
Abstract: This paper evaluates the impact of changes in current Swedish energy taxation by analyzing a panel of approximately 150 district heating plants in Sweden. We estimate plant-specific production functions and derive the economic repercussions of the tax. We also estimate the resulting changes of emissions of Sulfur, NOx, particulates and CO2 and assess the externality costs. Our results raise the issue of whether or not the Swedish tax system needs to be complemented with additional environmental taxes, covering, say, emissions of particulates. However, because the geographical variation of damages is likely to be substantial, an overall assessment of current regulatory schemes seems preferable. The current system of using both taxes and regulations needs to be re-structured, in particular in the case of global environmental problems.
Keywords: Energy Taxation; Heating Plants; Panel Data; Externalities
21 pages, November 1, 1999
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