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Environmental Performance and Climate Policy

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Abstract

This study’s ultimate goal is to analyze environmental performance (EP) at firm level and the effectiveness of environmental policy along with other possible determinants. Especially, the empirical analysis aims at exploring the relationship between the actual EP of firms in terms of CO2 emissions per output unit, and one aspect of Swedish environmental policy, the CO2-tax. Since Sweden was the first country to introduce a specific CO2-tax in 1991 we believe that the Swedish case may serve as an appropriate “test bench” for analyzing EP and the effectiveness of environmental policy in general. To achieve our objective we use a panel data of Swedish manufacturing spanning over the period 1990-2004. The results suggest that EP has improved in all sectors of manufacturing. We also see that production increases while emissions decrease in many sectors, indicating a decoupling of economic growth and environmental degradation. Furthermore, firms’ EP responds to changes in the CO2-tax and fossil fuel price, but is more sensitive to the tax, indicating different EP behavior among firms depending on why the cost of fossil fuels change. Several sectors also display a positive tendency over time in EP, which may suggest that EP is to some extent stimulated by an overall boost in environmental awareness in society and firms.

Suggested Citation

  • Brännlund, Runar & Lundgren, Tommy & Marklund, Per-Olov, 2011. "Environmental Performance and Climate Policy," CERE Working Papers 2011:6, CERE - the Center for Environmental and Resource Economics.
    • Handle: RePEc:hhs:slucer:2011_006
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    File URL: http://www-sekon.slu.se/~gbost/CERE_WP2011-6.pdf
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    References listed on IDEAS

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    1. Fare, R. & Grosskopf, S. & Hernandez-Sancho, F., 2004. "Environmental performance: an index number approach," Resource and Energy Economics, Elsevier, vol. 26(4), pages 343-352, December.
    2. Runar Brännlund & Tommy Lundgren, 2010. "Environmental policy and profitability: evidence from Swedish industry," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 12(1), pages 59-78, June.
    3. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl Jr., 2010. "Toxic releases: An environmental performance index for coal-fired power plants," Energy Economics, Elsevier, vol. 32(1), pages 158-165, January.
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    1. Lundgren, Tommy & Marklund, Per-Olov, 2012. "Environmental Performance and Profits," CERE Working Papers 2012:8, CERE - the Center for Environmental and Resource Economics.
    2. Färe, Rolf & Grosskopf, Shawna & Lundgren, Tommy & Marklund, Per-Olov & Zhou, Wenchao, 2012. "Productivity: Should We Include Bads?," CERE Working Papers 2012:13, CERE - the Center for Environmental and Resource Economics.
    3. Rolf F�re & Shawna Grosskopf & Tommy Lundgren & Per-Olov Marklund & Wenchao Zhou, 2014. "Pollution-generating technologies and environmental efficiency," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 12(3), pages 233-251, August.
    4. Jaraite, Jurate & Kažukauskas, Andrius & Lundgren, Tommy, 2012. "Determinants of Environmental Expenditure and Investment: Evidence from Sweden," CERE Working Papers 2012:7, CERE - the Center for Environmental and Resource Economics.
    5. Färe, Rolf & Grosskopf, Shawna & Lundgren, Tommy & Marklund, Per-Olov & Zhou, Wenchao, 2013. "Which Bad is Worst? An Application of Leif Johansen’s Capacity Model," CERE Working Papers 2013:2, CERE - the Center for Environmental and Resource Economics.
    6. Hammar, Henrik & Sjöström, Magnus, 2011. "Accounting for behavioral effects of increases in the carbon dioxide (CO2) tax in revenue estimation in Sweden," Energy Policy, Elsevier, vol. 39(10), pages 6672-6676, October.

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    More about this item

    Keywords

    CO2 emissions; CO2-tax; environmental performance;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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