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Carbon intensity in production and the effects of climate policy—Evidence from Swedish industry

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  • Brännlund, Runar
  • Lundgren, Tommy
  • Marklund, Per-Olov

Abstract

We analyze carbon intensity performance at firm level and the effectiveness of the Swedish CO2 tax. Carbon intensity performance is derived from a production technology and measured as changes in the CO2 emission-output production ratio. As one of the first countries to introduce a CO2 tax in 1991, Sweden serves as an appropriate “test bench” for analyzing the effectiveness of climate policy in general. Firm level data from Swedish manufacturing spanning over the period 1990–2004 is used for the analysis. Results show that EP has improved in all the sectors and there is an evidence of decoupling of output production growth and CO2 emissions. Firms' carbon intensity performance responds both to changes in the CO2 tax and fossil fuel price, but is more sensitive to the tax.

Suggested Citation

  • Brännlund, Runar & Lundgren, Tommy & Marklund, Per-Olov, 2014. "Carbon intensity in production and the effects of climate policy—Evidence from Swedish industry," Energy Policy, Elsevier, vol. 67(C), pages 844-857.
    • Handle: RePEc:eee:enepol:v:67:y:2014:i:c:p:844-857
    DOI: 10.1016/j.enpol.2013.12.012
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    1. > Environmental and Natural Resource Economics > Climate economics > Ex-post evaluation of climate policy > Carbon taxes

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    Cited by:

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    2. Franziska Klein & Jeroen van den Bergh, 2021. "The employment double dividend of environmental tax reforms: exploring the role of agent behaviour and social interaction," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 10(2), pages 189-213, April.
    3. Bostian, Moriah & Färe, Rolf & Grosskopf, Shawna & Lundgren, Tommy, 2016. "Environmental investment and firm performance: A network approach," Energy Economics, Elsevier, vol. 57(C), pages 243-255.
    4. Karimu, Amin & Brännlund, Runar & Lundgren, Tommy & Söderholm, Patrik, 2017. "Energy intensity and convergence in Swedish industry: A combined econometric and decomposition analysis," Energy Economics, Elsevier, vol. 62(C), pages 347-356.
    5. Raymond Markey & Joseph McIvor & Martin O’Brien & Chris F Wright, 2021. "Triggering business responses to climate policy in Australia," Australian Journal of Management, Australian School of Business, vol. 46(2), pages 248-271, May.
    6. Xiao Ling & Yue Gao & Guoyong Wu, 2023. "How Does Intensive Land Use Affect Low-Carbon Transition in China? New Evidence from the Spatial Econometric Analysis," Land, MDPI, vol. 12(8), pages 1-26, August.
    7. Martinsson, Gustav & Sajtos, László & Strömberg, Per & Thomann, Christian, 2022. "Carbon Pricing and Firm-Level CO2 Abatement: Evidence from a Quarter of a Century-Long Panel," Misum Working Paper Series 2022-10, Stockholm School of Economics, Mistra Center for Sustainable Markets (Misum).
    8. Kuosmanen, Natalia & Maczulskij, Terhi, 2022. "The Role of Firm Dynamics in the Green Transition: Carbon Productivity Decomposition in Finnish Manufacturing," ETLA Working Papers 99, The Research Institute of the Finnish Economy.
    9. David Bonilla & David Banister & Uberto Salgado Nieto, 2022. "Tax or Clean Technology? Measuring the True Effect on Carbon Emissions Mitigation for Sweden and Norway," Energies, MDPI, vol. 15(11), pages 1-24, May.
    10. Cenjie Liu & Zhongbao Zhou & Qing Liu & Rui Xie & Ximei Zeng, 2020. "Can a low-carbon development path achieve win-win development: evidence from China’s low-carbon pilot policy," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(7), pages 1199-1219, October.
    11. Longfei He & Qinxu Gu & Junsong Bian & Kin Keung Lai & Xiao Zhang, 2023. "To Pool or Not to Pool in Carbon Quotas: Analyses of Emission Regulation and Operations in Supply Chain Supernetwork under Cap-and-Trade Policy," Annals of Operations Research, Springer, vol. 324(1), pages 311-353, May.
    12. Karimu, Amin & Bali Swain, Ranjula, 2023. "Implication of electricity taxes and levies on sustainable development goals in the European Union," Energy Policy, Elsevier, vol. 177(C).
    13. Ying Sun & Fengqin Liu & Huaping Sun, 2022. "Does Standardization Improve Carbon Emission Efficiency as Soft Infrastructure? Evidence from China," Energies, MDPI, vol. 15(6), pages 1-17, March.
    14. Brehm, Johannes & aus dem Moore, Nils & Gruhl, Henri, 2022. "Driving Innovation? – Carbon Tax Effects in the Swedish Transport Sector," VfS Annual Conference 2022 (Basel): Big Data in Economics 264085, Verein für Socialpolitik / German Economic Association.
    15. Brännlund, Runar & Lundgren, Tommy & Söderholm, Patrik, 2015. "Convergence of carbon dioxide performance across Swedish industrial sectors: An environmental index approach," Energy Economics, Elsevier, vol. 51(C), pages 227-235.
    16. Yoon, Kyoung-Soo & Oh, Hyungna, 2021. "Impacts of ETS allocation rules on abatement investment and market structure," Energy Economics, Elsevier, vol. 101(C).
    17. Sanz-Díaz, María Teresa & Velasco-Morente, Francisco & Yñiguez, Rocío & Díaz-Calleja, Emilio, 2017. "An analysis of Spain's global and environmental efficiency from a European Union perspective," Energy Policy, Elsevier, vol. 104(C), pages 183-193.
    18. Claudia Kettner-Marx & Daniela Kletzan-Slamanig, 2018. "Energy and Carbon Taxes in the EU. Empirical Evidence with Focus on the Transport Sector," WIFO Working Papers 555, WIFO.
    19. Moriah Bostian & Rolf Färe & Shawna Grosskopf & Tommy Lundgren & William L. Weber, 2018. "Time substitution for environmental performance: The case of Swedish manufacturing," Empirical Economics, Springer, vol. 54(1), pages 129-152, February.
    20. Bostian, Moriah & Färe, Rolf & Grosskopf, Shawna & Lundgren, Tommy & Weber, William L., 2016. "Time substitution for environmental performance: The case of Sweden manufacturing," CERE Working Papers 2016:3, CERE - the Center for Environmental and Resource Economics.
    21. Giedrė Lapinskienė & Kęstutis Peleckis & Marijus Radavičius, 2015. "Economic development and greenhouse gas emissions in the European Union countries," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(6), pages 1109-1123, December.
    22. Tommy Lundgren & Per-Olov Marklund, 2015. "Climate policy, environmental performance, and profits," Journal of Productivity Analysis, Springer, vol. 44(3), pages 225-235, December.
    23. Cenjie Liu & Chunbo Ma & Rui Xie, 2020. "Structural, Innovation and Efficiency Effects of Environmental Regulation: Evidence from China’s Carbon Emissions Trading Pilot," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 741-768, April.
    24. Blanco, Christian C. & Caro, Felipe & Corbett, Charles J., 2020. "Do carbon abatement opportunities become less profitable over time? A global firm-level perspective using CDP data," Energy Policy, Elsevier, vol. 138(C).

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    CO2 emissions; CO2 tax; Carbon performance;
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