Essays on Environmental Economics
Abstract: This dissertation consists of four self-contained essays.Essay IThis essay reports on an experimental study of how voluntary contributions in a public good game are affected by framing. In the public good context, average wealth improves from contributions. In the defensive contexts, the voluntary contributions prevent reductions in average wealth. The experiment shows that the subjects classified as conditionally co-operative make zero contributions to a larger extent in the defensive contexts. But there are no significant differences in average contribution levels, owing to compensating contributions by some subjects motivated by warm glow.Essay IIThe aim of this essay is to clarify the magnitude of the sub-optimization cost associated with separate control strategies for compliance with the Swedish environmental quality objectives. The marginal reduction costs are estimated using a separate and an integrated version of a deterministic linear programming model. The main findings are that there are no substantial sub-optimization costs for separate control strategies for CO2, NOX and SO2. But an integrated action strategy could imply enhanced costefficiency in reductions of VOC and particles.Essay IIIIn this essay we develop a multivariate stochastic control framework to deal with the cost efficiency problem associated with multiple emissions, since there are considerable quantification uncertainties concerning the effectiveness of the proposed emission reduction measures. It is found that a composite probabilistic constraint induces considerably lower abatement costs than separable probabilistic restrictions. Moreover, it can be concluded that the possibilities of increasing the cost-efficiency of emission reductions, with an approach that includes all major emissions to air simultaneously, become more apparent in the stochastic framework than in the deterministic setting.Essay IVThe European Union (EU) emission-trading scheme (ETS) is on of the most ambitious emission-trading systems ever and the involved member-states have various national climate strategies. This paper compares two options regarding how Sweden, a memberstate with a stricter national CO2 target than the EU Kyoto commitment, can internalise ETS. In the first strategy, the total emission cap for the Swedish ETS participants is based on the EU Kyoto commitment and combined with existing CO2 taxation. In the second, the ETS participants are exempted from CO2 taxation and the national policy is instead enforced by a stricter emission cap. We evaluate these strategies with a stochastic linear programming model based on 51 measures in Sweden. From the EU perspective, a transition from the first to the second strategy would reduce the cost of complying with the national target by approximately 150 and 40 million € a year, at emission allowance prices of 9 and 54 €/tonne respectively.
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