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The power system is undergoing a transition toward more intermittent energy sources alongside rising electricity demand, both of which increase the risk of supply disruptions. In this context, understanding the societal value of reliable electricity is critical. The standard metric for outage costs is the value of lost load (VoLL), which reflects the economic loss per unit of unserved electricity. However, VoLL varies widely across firms and sectors, making cross-industry comparisons challenging. A more operational measure is the cost per hour (CpH) of interruption, which expresses outage costs in time-equivalent terms and is often more intuitive for practical decision-making. Our analysis, based on firm-level data on electricity use and economic output, shows that the cost of power disruptions has increased significantly over time. In 2016, the estimated cost of a 1-h outage for a typical Swedish industrial facility was 23 times the value of the lost electricity—up from 13 times in 2004. These figures account for factors such as permanent production losses and substantial restart costs, both of which vary significantly by industry. To reflect this heterogeneity, we provide theoretical bounds for VoLL and CpH, capturing differences in input flexibility, process characteristics, and exposure. For the empirical estimates, this is addressed through upper- and lower bounds The approach underscores the importance of selecting appropriate metrics when assessing the economic impact of outages or evaluating investments in grid reliability.

In this paper, we empirically investigate how environmental protection expenditures affect sector-level employment within manufacturing industries, using detailed firm-level data for Sweden for the years 2002–2021. We use a structural model that allows for a decomposition of the total employment effect of environmental protection expenditures within a sector into a cost effect, a factor shift effect, and a demand effect. We add to previous literature by using instrumental variables in our empirical framework, to account for endogenous environmental spending stemming from, e.g., corporate social responsibility and self-regulation. Our results reveal that increased environmental protection expenditures generally have no statistically significant effect on employment among the sectors studied, with the paper and pulp sector being the exception, showing non-negligible negative effects on employment.

In this paper, we empirically examine the dynamic effects of electricity and fuel price changes on factor demand, utilizing detailed firm-level data from the Swedish manufacturing industry spanning 2004–2022. We employ a panel vector autoregressive model to analyze factor inputs and their associated prices. Our findings indicate that the demand for electricity and fuel is inelastic both immediately following a price change and over the following five years. Additionally, our results show that energy price shocks generally do not have statistically significant effects on labor demand, nor do they indicate any significant inter-fuel substitution.

Biofuels are regarded as energy sources with the potential to solve a series of problems related to the climate and sustainability. Expectations are that pursuing policies supporting biofuels will be beneficial for welfare and sustainability in societies. It is convenient to divide the effects of such policies into four categories: Climate effects, other environmental effects, energy security effects, and net economic effects. Reviewing the literature to date reveals that the effects of converting from fossil fuels to biofuels do not necessarily have positive net welfare effects, and the argument to substitute biofuels for fossil fuels is not as obvious as it initially appears to be. Short-run stringent climate policy objectives are proposed to counteract global warming, and increasing the use of biofuels is promoted as an adequate strategy. One important conclusion drawn from recent studies is that biofuels are not entirely carbon neutral, as is commonly assumed. Therefore, the use of biofuels as an instrument in climate policy must be carefully scrutinized before set into play on a global scale.

We measure the cost of technical inefficiency for local electricity distribution firms in Sweden using Stochastic Frontier Analysis, and explore how small-scale generation, the number of electric vehicles and the introduction of dynamic pricing schemes affects the transient inefficiency and efficiency scores. Our results show little to no effect of these environmental variables on the cost of technical inefficiency of electricity distribution grids in Sweden.

Encyclopedia of Energy, Natural Resource, and Environmental Economics, Second Edition, Three Volume Set covers energy economics in three subdisciplines which, when taken together compose an economic approach to the development and preservation of natural resources and environmental quality. The book focuses on energy-related subjects such as renewable energy, hydropower, nuclear power, and the political economy of energy. Other sections cover land and water use, such as mining, fisheries, agriculture, and forests. Although the three areas are closely related, they are not often presented as an integrated whole. This revised, three-volume set will bridges the gap by unifying these fields into a high-quality, comprehensive and unique overview. It will serve as an invaluable and unique tool to facilitate the first step in diving into a new subject within energy, resource or environmental economics. The chapters are written in a non-technical manner so that users outside of advanced academics or trained economists are also able to grasp the content easily. In addition, all chapters follow a specific template throughout, thus providing a consistent and logical format for the reader.

I samband med att EU antog en ny klimatlag 2021 höjdes målet att minska växthusgasutsläppen från 40 procent till minst 55 procent senast 2030. Lagen omvandlar tidigare politiska åtaganden om att EU ska uppnå klimatneutralitet senast 2050 till en bindande skyldighet. I juli 2021 lade EU-kommissionen fram sitt förslag om ett uppdaterat ramverk Fit for 55, för att nå målet som slås fast i klimatlagen. Klimatpolitiken får effekter på Sveriges näringslivsstruktur. Strukturomvandling innebär att resurser flyttar från en del av ekonomin till en annan. Hur väl ekonomin kan anpassa sig till sådana förändringar är viktigt för hur tillväxten påverkas. Förmågan att ställa om kan också ge fördelar på den globala marknaden när det gäller att exportera hållbara varor och tjänster som efterfrågas globalt. Förändringarna kan vara både tillfälliga och permanenta. De kan också påverka olika delar av ekonomin olika. Den här rapporten belyser hur klimatpolitiken kan komma att påverka den svenska industrin, och innehåller en litteraturgenomgång, en empiriskanalys på mer aktuella data samt en konceptuell analys med ett räkneexempel.

This study highlights the significant economic consequences of power outages for Sweden’s electricity-intensive industries and underscores the shortcomings of traditional metrics, such as value-added-based methods, in reliably estimating these costs. The study is part of Tillväxtanalys’s project "Economic Effects ofElectricity-Intensive Industries" (ELIN), which aims to explore if and how the government can act to shift the economy toward a greater or lesser reliance onelectricity-intensive activities. 

Energy inefficiency in production implies that the same level of goods and services could be produced using less energy. The potential energy inefficiency of a firm may be linked to long-term structural rigidities in the production process and/or systematic shortcomings in management (persistent inefficiency), or associated with temporary issues like misallocation of resources (transient inefficiency). Eliminating or mitigating different inefficiencies may require different policy measures. Studies measuring industrial energy inefficiency have mostly focused on overall inefficiencies and have paid little attention to distinctions between the types. The aim of this study was to assess whether energy inefficiency is transient and/or persistent in the Swedish manufacturing industry. I used a firm-level panel dataset covering fourteen industrial sectors from 1997 to 2008 and estimated a stochastic energy demand frontier model. The model included a four-component error term separating persistent and transient inefficiency from unobserved heterogeneity and random noise. I found that both transient and persistent energy inefficiencies exist in most sectors of the Swedish manufacturing industry. Overall, persistent energy inefficiency was larger than transient, but varied considerably in different manufacturing sectors. The results suggest that, generally, energy inefficiencies in the Swedish manufacturing industry were related to structural rigidities connected to technology and/or management practices.

We develop a model for pollution abatement that distinguishes between prevention and treatment technologies, in order to better understand the optimal mix of abatement measures. Our model separates the production process into two stages, an initial production and prevention stage and a final treatment (or cure) stage. We allow for reallocation of abatement investment across the production stages, in order to improve overall abatement and production and to better understand the tradeoffs between abatement measures. This framework is relevant in practice for numerous industrial production processes, including manufacturing and energy, which employ different abatement measures at different stages of production. In our application to Sweden’s pulp and paper sector, we find the industry could achieve further gains to both production and emissions reductions, beyond those estimated using more common single-stage technology estimation methods, by reallocating abatement investments. These results could be used to improve firm environmental management decisions, and to better target policy incentives to specific forms of abatement.