Scandinavian Working Papers in Economics
Working Papers,
National Institute of Economic Research
No 123: The Excess Cost of Supplementary Constraints in Climate Policy: The Case of Sweden’s Energy Intensity Target
Thomas Broberg (), Tomas Forsfält () and Göran Östblom
Additional contact information
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
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
31 pages, June 1, 2011
Full text files
Working-Paper-123-Th...Intensity-Target.pdf
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