Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2013:6: The effects on energy saving from taxes on motor fuels: The Swedish case

Runar Brännlund ()
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Runar Brännlund: CERE, Umeå University

Abstract: The objective with this study is to analyze the role of energy taxes for energy efficiency in the Swedish transport sector. In particular we analyze how large share the Swedish energy tax will contribute to the overall Swedish target for energy efficiency set by the EU directive for energy efficiency. To obtain the objective a dynamic demand model for gasoline and diesel is estimated, based on Swedish time series data from 1976 to 2012. The results from the demand model shows that a higher tax on gasoline results in lower gasoline demand, but leads to an increase in diesel consumption, and vice versa. A removal of the energy and CO2 tax, lowering both the gasoline and diesel consumer price, leads to an overall increase in energy use, but also to an increase in the share for diesel in fuel use. Concerning energy savings the simulation results show that the current Swedish energy and CO2 taxes are sufficient for achieving the EU stipulated target, and hence no additional measures has to be taken.

Keywords: energy efficiency; gasoline; diesel; cointegration

JEL-codes: Q41

21 pages, October 30, 2013

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