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Carbon prices and incentives for technological development
- Source :
- Journal of environmental management. 150
- Publication Year :
- 2014
-
Abstract
- How to significantly decrease carbon dioxide emissions has become one of the largest challenges faced by modern society. The standard recipe prescribed by most economists is to put a price on carbon, either through a tax or through emissions trading. Such measures can reduce emissions cost-effectively and create incentives for technological development. There is, however, a growing concern that the carbon prices generated through the European Union emission trading system (EU ETS) have been too low to create the incentives necessary to stimulate technological development. This paper empirically analyzes how the Swedish carbon dioxide tax and the EU ETS have affected productivity development in the Swedish pulp and paper industry 1998-2008. A Luenberger total factor productivity (TFP) indicator is computed using data envelopment analysis. How the policy measures affect TFP is assessed using a system generalized method of moments estimator. The results show that climate policy had a modest impact on technological development in the pulp and paper industry, and if significant it has been negative. The price on fossil fuels, on the contrary, seems to have created important incentives for technological development. Hence, results suggest that the carbon prices faced by the industry through EU ETS and the carbon dioxide tax have been too low.
- Subjects :
- Paper
Environmental Engineering
Natural resource economics
jel:D22
Industrial Waste
Management, Monitoring, Policy and Law
jel:D24
Air Pollution
Economics
Data envelopment analysis
media_common.cataloged_instance
Humans
European union
Waste Management and Disposal
Total factor productivity
Productivity
media_common
Generalized method of moments
Sweden
Public economics
business.industry
Fossil fuel
General Medicine
CO2 tax
EU ETS
Luenberger productivity indicator
GMM
Carbon Dioxide
Models, Theoretical
Taxes
Incentive
jel:Q55
jel:Q54
jel:Q58
Emissions trading
Economic Development
business
Subjects
Details
- ISSN :
- 10958630
- Volume :
- 150
- Database :
- OpenAIRE
- Journal :
- Journal of environmental management
- Accession number :
- edsair.doi.dedup.....1080c9e31a24876f384796c5f6e27cad