Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 585: Diffusion of NOx abatement technologies in Sweden
Jorge Bonilla, Jessica Coria (), Kristina Mohlin and Thomas Sterner
Additional contact information
Jorge Bonilla: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 Gothenburg, SWEDEN
Jessica Coria: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 Gothenburg, SWEDEN
Kristina Mohlin: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 Gothenburg, SWEDEN
Thomas Sterner: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 Gothenburg, SWEDEN
Abstract: This paper studies how different NOx abatement technologies have diffused under the Swedish system of refunded emissions charges and analyzes the determinants of the time to adoption. The policy, under which the charge revenues are refunded back to the regulated firms in proportion to energy output, was explicitly designed to affect investment in NOx-reducing technologies. The results indicate that a higher net NOx charge liability, i.e. a reduction in tax liabilities net of the refund due to the new technology, increases the likelihood of adoption, but only for end-of-pipe post-combustion technologies. We also find some indication that market power considerations in the heat and power industry reduce the incentives to abate emissions through investment in postcombustion technologies. Adoption of post-combustion technologies and the efficiency improving technology of flue gas condensation are also more likely in the heat and power and waste incineration sectors, which is possibly explained by a large degree of public ownership in these sectors.
Keywords: technology diffusion; NOx; abatement technologies; environmental regulations; refunded emission charge
48 pages, January 2014
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