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A dual assessment of the environmental Kuznets curve: The case of Sweden
Umeå University, Faculty of Social Sciences, Department of Economics.
2005 (English)Report (Other academic)
Abstract [en]

In this paper, we calculate time series of shadow prices for Swedish emissions of CO2, SO2, and VOC for the period 1918 - 1994. Newly constructed historical emission time series enable studying a single country’s emission paths through increasing levels of economic activity. The shadow prices are, in the next step, related to income to explain the environmental Kuznets curves (EKC) previously found in Swedish data for these three emissions. A directional distance function approach is used to estimate the production process for Swedish industry thus enabling the opportunity costs of a reduction in these emissions to be calculated. We attribute the annual changes in the shadow prices to the main causal factors by decomposing them into a technological effect and a substitution effect. We conclude that the time series of the shadow prices show support for EKCs for Swedish industry.

Place, publisher, year, edition, pages
Umeå: Umeå university , 2005. no 660, 24 p.
Series
Umeå economic studies, ISSN 1403-4824 ; 660
Keyword [en]
Emissions, historical time series, decomposition, directional distance function
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-4572OAI: oai:DiVA.org:umu-4572DiVA: diva2:143725
Available from: 2005-05-08 Created: 2005-05-08 Last updated: 2009-08-20Bibliographically approved
In thesis
1. Bioenergy, pollution, and economic growth
Open this publication in new window or tab >>Bioenergy, pollution, and economic growth
2005 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of four papers: two of them deal with the effects on the forest sector of an increase in the demand for forest fuels, and two of them concern the relation between economic growth and pollution.

Paper [I] is a first, preliminary study of the potential effects on the Swedish forest sector of a continuing rise in the use of forest resources as a fuel in energy generation. Sweden has made a commitment that the energy system should be sustainable, i.e., it should be based on renewable resources. However, an increasing use of the forest resources as an energy input could have effects outside the energy sector. We consider this in a static model by estimating a system of demand and supply equations for the four main actors on the Swedish roundwood market; forestry, sawmills, pulpmills and the energy sector. We then calculate the industries' short run supply and demand elasticities.

Paper [II], is a development of the former paper. In this paper, we estimate the dynamic effects on the forest sector of an increased demand for forest fuels. This is done by developing a partial adjustment model of the forest sector that enables short, intermediate, and long run price elasticities to be estimated. It is relevant to study the effects of increased demand for forest fuels as the Swedish government has committed to an energy policy that is likely to further increase the use of renewable resources in the Swedish energy system. Four subsectors are included in the model: forestry, sawmills, pulpmills and the energy industry. The results show that the short run elasticities are fairly consistent with earlier studies and that sluggish adjustment in the capital stock is important in determining the intermediate and long run responses. Simulation shows that an increase in the demand for forest fuels has a positive effect on the equilibrium price of all three types of wood, and a negative effect on the equilibrium quantities of sawtimber and pulpwood.

In paper [III] a Shephard distance function approach is used to estimate time series of shadow prices for Swedish emissions of CO2, SO2, and VOC for the period 1918 - 1994. The shadow prices are in a next step regressed on GDP per capita. The objective of the study is closely linked to hypothesis of environmental Kuznets curves. We conclude that the time series of the shadow prices from this approach can not be used to explain the EKCs found for Swedish emissions.

In paper [IV], we calculate time series of shadow prices for Swedish emissions of CO2, SO2, and VOC for the period 1918 - 1994. The shadow prices are in a next step related to income, to explain the EKCs previously found for Swedish data on the three emissions. Newly constructed historical emission time series enable studying a single country's emission paths through increasing levels of economic activity. A directional distance function approach is used to estimate the industry's production process in order to calculate the opportunity costs of a reduction in the emissions. The time series of the shadow prices show support for EKCs for the Swedish industry.

Place, publisher, year, edition, pages
Umeå: Nationalekonomi, 2005. 85 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 661
Keyword
Economics, Forest sector, Forest fuels, Dynamic factor demand, Adjustment costs, Economic growth, Pollution, Environmental Kuznets curve, Shadow price, Distance function, Nationalekonomi
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-530 (URN)91-7305-888-0 (ISBN)
Distributor:
Nationalekonomi, 90187, Umeå
Public defence
2005-05-27, Humanisthuset, Hörsal E, Umeå universitet, Umeå, 10:15 (English)
Opponent
Supervisors
Available from: 2005-05-08 Created: 2005-05-08 Last updated: 2009-08-18Bibliographically approved

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Citation style
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