Carbon dioxide emission trading, or not? An institutional analysis of company behaviour in Sweden.

The Kyoto Protocol opens up for market based solutions in climate change mitigation. A number of companies in Europe, North America and Asia have already practiced carbon dioxide emission trading. Sweden and Swedish companies have a tradition of being proactive in environmental policy and management. However, Swedish companies are acting reactively or even passively when it comes to emission trading. This paper aims to elucidate and explain the Swedish companies' behaviour on this matter. From our study, which focuses primarily on the energy and forestry sectors, it was found that companies are principally in favour of emission trading, but they have not developed initiatives for emission trading in practice. The study indicates that the institutional arrangements in which companies are situated do not encourage emission trading. Ambiguous government policies are claimed to prevent the companies from making long-term strategies on climate change mitigation in general and emission trading in particular. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment. [ABSTRACT FROM AUTHOR]