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The overall purpose of this thesis is to investigate market developments and policy issues that influence the environmental performance of the industry sector. The analysis concentrates mainly on the industry's input use in the form of energy and forest raw materials. The thesis consists of an introductory part, and five self-contained papers. Paper I addresses important market signals and firm specific management practices that may explain differences in observed energy intensities across industrial firms. The paper combines interview statistics with secondary data on energy prices, output etc., that are used in a simple econometric model in which the energy intensities of 89 process firms over the time period 2004-2010 are analyzed. The descriptive results show a significant increase in firm and top management energy efficiency awareness. The respondents stress that increased awareness is due to rising energy costs. In line with this, the model estimations show that awareness will not have an effect on firm's energy intensity. Instead, rising energy prices will significantly reduce the energy intensity. Paper II addresses the role of voluntary energy efficiency programs in the industrial sector. We expand on earlier work by explicitly considering the self-selection mechanism in these programs as well as the role of different management and decisionmaking practices for understanding program outcomes. The results show that the probability for choosing to participate in PFE as well as the level of self-reported energy savings for those who participate tend to increase with increased electricity intensity and electricity use. Different management practices also affect the probability of participation; firms in which the energy manager has fewer responsibilities and works closer to the CEO have been more likely to participate in the program. The above suggests that PFE may primarily have attracted firms that already have had plenty of experience with energy efficiency issues. Increasing the use of renewable energy is of principal EU energy policy concern. In this respect, investigating European trade in forest raw materials is important for understanding how industry sectors in the EU will be affected by these policies. Papers III and IV therefore, quantify and analyze possible trade patterns in forest raw materials in the presence of EU energy policy. Specifically, in Paper III the White Paper and the RES-E Directive are analyzed whilst the RES2020 Directive is of focus in Paper IV. The analysis builds on developing and employing a partial equilibrium model of trade in selected forest raw materials in Europe. In Papers III and Paper IV, the results suggest that the policy implementations will increase the trade in forest raw materials by up to 67 and 110 percent, respectively. Since the national goals in the RES2020 Directive are mandatory in contrast to the indicative recommendations stated in previous EU energy policies on renewables, Paper IV concludes that more ambitious goals will inevitably affect the input competing industries. Finally, Paper V provides a critical survey of previous econometric analyzes of supply and demand elasticities in wastepaper markets. A key finding is that the own-price elasticity of wastepaper supply is overall low (around 0.20-0.30). This adds to our understanding of the price volatility in wastepaper markets, and carries important implications for the impacts of – and the efficient choice between – price- and quantity-based waste management policies. ; Godkänd; 2013; 20130315 (andbra); Tillkännagivande disputation 2013-04-16 Nedanstående person kommer att disputera för avläggande av filosofie doktorsexamen. Namn: Anna Mansikkasalo Ämne: Nationalekonomi / Economics Avhandling: Greening Industry: Essays on Industrial Energy Use and Markets for Forest Raw Materials Opponent: Professor Per Mickwitz, Finnish Environmental Institute, Helsinki, Finland Ordförande: Universitetslektor Patrik Söderholm, Institutionen ekonomi, teknik och samhälle, Luleå tekniska universitet Tid: Onsdag den 8 maj 2013, kl. 13.00 Plats: A1547, Luleå tekniska universitet

The overall purpose of this thesis is to study how the development of the electricity transmission grids in the Nordic countries can be given a stronger international perspective. This is a relevant issue for the further development of the regional Nordic electricity market. The thesis consists of an introductory chapter and two self-contained papers.Paper I analyses how an international cost sharing agreement for transmission analyses how an international cost sharing agreement for transmission investments could be designed to improve the regional perspective in grid development. The study is focused on how different agreements may affect the investment decisions made by TSOs for grid expansions where several countries are involved. This type of expansion has become a problem in grid development because although it is beneficial for several countries, it might still not be realised due to lack of a formalised practice for sharing the investment cost. The basis for cost sharing will be a cost-benefit analysis of the regional effects that a given expansion has. To model how a cost sharing agreement can be applied to this situation, two stages are defined. First a political stage where a cost sharing agreement is assumed to be formed among the countries in a region, followed by a TSO stage where decisions on specific expansions are made. The analysis is focused on the TSOs' decisions in the second stage. Cooperative game theory (CGT) is used to predict under which agreements that an investment coalition is formed. The cost sharing agreements evaluated consist of combinations of a contribution principle, a compensation principle (to account for negative spill-overs) and an allocation rule. The results show that the design of the agreement will affect the decision to invest or not. Two alternative rules are identified as good choices for providing incentives to invest; the nucleolus and proportional rules. Regarding the compensation principles it is concluded that full compensation should not be used.Paper II develops an incentive regulation method that can be used to provide TSOs develops an incentive regulation method that can be used to provide TSOs with economic incentives to focus on electricity market integration. A benchmark model is constructed to assess the performance of TSOs in facilitating cross-border trade. The model is based on the output-oriented technical efficiency of the TSOs, which is linked to market integration by defining an output measure for TSOs that includes the market expanding effects of trade. The output measure is the sum of national electricity consumption including imports plus exports of electricity. It is argued that TSOs can increase this output by expanding the trade capacities with neighbouring countries. The benchmark model is based on a stochastic production frontier defined by a translog output distance function with two outputs and three inputs. The frontier is empirically estimated by a fixed effects model using a panel data set of six TSOs. The included TSOs are the four Nordic and those of Belgium and the Netherlands (BL-NL). The estimated efficiency scores are in the range 61-100 percent, with the Nordic TSOs showing higher scores relative BL-NL. This can be explained by a lower level of electricity trade in the BL-NL region compared to the Nordic region. The use of the efficiency scores in a regulatory incentive scheme is demonstrated. The scheme is based on a reward/penalty mechanism that uses the efficiency scores to evaluate a TSO's development between two periods in relation to a target efficiency level. The results of this study show that the suggested regulation method could be used as a means to evaluate and set targets for the TSO's task of facilitating market integration. ; Godkänd; 2010; 20101027 (hannyl); LICENTIATSEMINARIUM Ämnesområde: Nationalekonomi Examinator: Docent Robert Lundmark, Luleå tekniska universitet Extern opponent: Docent Thomas Tangerås Institutet för Näringslivsforskning, Stockholm Tid: Tisdag den 30 november, klockan 12.30 Plats: A109, Luleå tekniska universitet

This paper examines the implications of habit formation in private and public goods consumption for the Pareto-efficient provision of public goods, based on a two-period model with nonlinear taxation. Under weak leisure separability, and if the public good is a flow-variable such that the government directly decides on the level of the public good in each period, habit formation leads to a modification of the policy rule for public good provision if, and only if, the degrees of habituation differ for private and public good consumption. By contrast, if the public good supply is time-invariant, the presence of habit formation generally alters the policy rule for public good provision.

Abstract Forests and the resources they offer have been important for the Swedish economy for a long time, and the forest industry remains a large part of the manufacturing industry even as the economy is becoming more service-based. Forests are also increasingly seen as an important source of biofuels that can be used to reduce the reliance on fossil fuels and to reach the target for a carbon neutral economy by the year 2050. Additionally, the preservation of forests for their various ecosystem services remains high on the political agenda. This thesis examines important economic issues of ecosystem services and bioenergy from forests as well as the goal conflicts within forestry in Sweden in four separate papers. The aim is to contribute to the research on optimal social use of Sweden's forests and the future of forestry when considering ecosystem services and the trade-off between demands for different forest products. This is particularly important since Sweden is moving towards a circular bio-economy where forests are becoming increasingly important as a fuel and material source. The first paper presents the current state of ecosystem service valuation and the challenges that needs to be addressed in the field when moving forward. The second paper applies the methodology of benefit transfer in a spatially explicit context to provide maps of ecosystem services for Sweden. The results are reasonable compared to previous estimations and the main contribution is the mapping of the spatial distribution of carbon sequestration and recreation in Sweden. The third paper focuses on the market for biomass and examines the elasticity for demand for the different sectors that uses forest biomass as an input. The findings are that the pulp and heating sectors are more sensitive towards price changes, while sawmills would to a larger extent be able to transfer increasing costs to their customers. This is in line with the expected outcome that as demand for biofuels increase, the heating sector would compete for biomass mainly with the pulp sector, rather than the sawmill industry. The fourth paper examines the effect of internalizing carbon sequestration on the rotation periods of forests in Sweden, as well as the effect of increased biofuel production. The results are that internalizing carbon sequestration would lengthen rotation periods, but there are large regional differences, and a carbon price that would barely increase rotation in southern Sweden may lead to infinite rotations in northern Sweden. This thesis recommends joint optimization of ecosystem services with market values but recommends against paying forest-owners for the carbon their forests sequester. While carbon storage would increase, a large part of the money would go towards paying for sequestration that already would occur in absence of the payment for ecosystem services scheme. Additionally, it would be difficult to price the subsidy/tax on a level that extends rotation in all the country without it leading to infinite rotation periods in any parts of the countries, which would have dramatic effects for the local forest industry. The goal conflicts within the Swedish forest sector needs to be examined further, going forward. This thesis touch upon the complexity with some of these goal conflicts, both between industry such as the pulp and heating sectors, but also between the environmental goals of "Sustainable Forests" and "Reduced Climate Impact", as well as with recreational uses of forests. There is certainly potential for synergy in some cases, the fourth paper showed favorable outcomes when optimizing for timber, biofuels and carbon sequestration, but Payments for Ecosystem Services schemes are expensive and may not be the most efficient use of taxpayer money.

China is currently the world's largest installer of wind power. However,with twice the installed wind capacity compared to the United States in 2015, theChinese produce less power. The question is: Why is this the case? This article showsthat Chinese grid connectivity is low, Chinese firms have few international patents,and that export is low even though production capacity far exceeds domesticproduction needs. Using the tools of Austrian economics, China's wind powerdevelopment from 1980 to 2016 is documented and analyzed from three angles:(a) planning and knowledge problems, (b) unproductive entrepreneurship, and (c)bureaucracy and government policy. From a theoretical standpoint, both a planningproblem and an entrepreneurial problem are evident where governmental policiescreate misallocation of resources and a hampering of technological development. ; Godkänd;2021;Nivå 0;2021-08-13 (alebob)

This thesis explores forest dependence in developing countries by examining households' perceptions about their forest use and dependence, energy choices and the links between forests and food security in a case study of Tanzania. Paper (I) reviews selected economic literature related to the role of household heterogeneities on forest dependence and on energy choices. The paper concludes that due to the presence of numerous market failures in developing countries, production and consumption decisions relating to forest use and energy use frequently become more complicated than in developed countries. Linked to this, household heterogeneities have considerable effects on forest dependence and energy preferences. However, additional research is still needed on the role of household heterogeneities on forest dependence and energy choices. Future studies should also focus on the energy path dependence by considering price elasticities to see how consumers respond to changes in shadow prices for different forest products and energy sources. Paper (II) explores factors affecting perceived forest dependence and by introducing private forest ownership, i.e., forests cultivated on private land, into the analysis. The analysis was based on household cross-sectional survey data collected in the subsample areas of Njombe and Shinyanga, Tanzania. Ordered logit models were run to estimate the determinants of perceived forest dependence, and the effects of private forest ownership on perceptions of forest dependence were analysed. The analysis showed that household socio-economic characteristics influenced households' perceptions of their dependence on forests. The analysis also showed that owners of forests on private land saw themselves as more forest-dependent than non-owners with similar levels of forest use. This study proposes for consolidated approaches to sustainability to conserve communal and state forests consider the socio-economic reality of the households that depend on them. Concurrently, households' ownership of forests on private lands should be encouraged, as should further research on such ownership. Paper (III) examines the linkage between forests and household food security by analysing factors that determine participation in forest activities and by examining differences between participants and non-participants in respect of the food-security outcome. The study was conducted in rural areas of the Shinyanga Region in Tanzania using cross-sectional data. Marginal effects predicted that distance to the forest concerned, illness or death of a household member, and off-farm activities determined participation in forest activities. Propensity score matching revealed that those who participated in forest activities were less food secure than non-participants were, which supports the contention that rural forest dependents are prone to food insecurity. Government policy should, therefore, aim at enhancing alternative sources of income as well as food storage facilities and food production for rural households. Paper (IV) contributes to the existing literature by describing and analysing this so-called energy mix in the city as well as the effects of households' experience with using various fuels. A comparison of multinomial logit specifications yielded different results, which implies that the analysis of the energy mix is sensitive to the way households are categorised in the research; households are much more likely to shift most of their energy use to new fuel types in response to changing conditions than to shift all of it. The results also show that households' fuel choices were sensitive to their fuel-use experience. Both findings have implications for energy policy; achieving shifts to new fuel types is easier if the goal is to achieve widespread, rather than total, shifts in household energy use, and achieving shifts to new fuels is easier if households have had at least some prior experience with those fuels.

Theories of inter-jurisdictional tax and yardstick competition assume that the tax decisions of one jurisdiction will influence the tax decisions of other jurisdictions. This paper empirically addresses the issue of horizontal dependence in local personal income tax rates across jurisdictions. Based on a large data set covering Swedish municipalities over a period of 14 years, we test for interactions across municipalities that share a common border, across municipalities within a distance of 100 km of each other, and across municipalities with similar political representation in the local council. We also test the hypothesis that the tax rate of relatively larger municipalities has a greater influence on their neighbors' tax rate compared to the influence of their smaller neighbors. Our results suggest that when lagged tax rates are controlled for, the horizontal correlation across municipalities that share a common border or are within a distance of 100 km from each other becomes insignificant. This result is of importance as it suggests that lagged tax rates should be included or at least tested for when testing for horizontal interactions or mimicking in local tax rates. However, our results support the hypothesis of horizontal interactions across municipalities that share a common border when the influence of neighboring municipalities is also weighted by their relative population size, i.e. relatively larger neighbors tend to have a greater impact on their neighbor's tax rates than their relatively smaller neighbors. This is of importance as it suggests that distance or proximity matters, although only in combination with the relative population size. We also find some evidence of horizontal dependence across municipalities with similar political preferences.

Previous research shows that Benefit-Cost Analysis (BCA) is seldom done in Sweden, and that the results e.g., in Norway and the Netherlands do not influence the ultimate policy choice. We explain why bureaucrats may choose (not) to do a BCA with cognitive- and search costs coupled with career concerns. Given the initial policy chosen by an agenda setter, bureaucrats who stay working at an agency have policy preferences close to the initial policy; those with reservation wages above a threshold quit and therefore do not influence policy. The bureaucrats' preferences converge to the initial policy level over time. A BCA reveals the inefficiency of the initial policy and the bureaucrats consequently have no incentive to do one, except when the policy is restricted by a binding governmental budget constraint. © 2021, The Author(s).

This thesis examines the economics of biofuel development by studying the forest raw material market impacts of increased biofuel production, as well as the role of specific policy incentives. Paper [I] presents an economic assessment of two different developments – both implying an increased demand for forest ecosystem services – and how these could affect the competition for forest raw materials. A Swedish forest sector trade model is updated to a new base year and used to analyze the consequences of: (a) increased bioenergy use in the heat and power sector; and (b) increased forest conservation. A particularly interesting market impact is that bioenergy promotion and forest conservation tend to have opposite effects on forest industry by-product prices. Furthermore, combining the two scenarios mitigates the forest industry by-product price increase compared to the case where only the bioenergy-promoting scenario is implemented. In other words, the heat and power sector is less negatively affected in terms of increased feedstock prices if a bioenergy demand increase is accompanied by increased forest conservation. Paper [2] explores the forest product market impacts of increased domestic second-generation (2G) biofuel production in Sweden. Changes in forest raw material prices and resource allocation are assessed using a forest sector trade model, which has been extended with a 2G biofuel module to address such production. The simulation results show increasing forest industry by-product prices, e.g., displaying that increased 2G biofuel production leads to a more intense raw material competition. The higher feedstock prices make the use of forest biomass in the heat and power sector less profitable. Still, we find little evidence of substitution of fossil fuels for by-products. There is also evidence of synergy effects in that the higher by-product prices spur sawmills to produce more sawn wood, something which in turn induces forest owners to increase harvest levels. Paper [3] presents and demonstrates a conceptual interdisciplinary framework that can constitute the basis for evaluations of the full supply-chain performance of various biorefinery concepts. The framework involves soft-linking a bottom-up and a top-down model; it considers the competition for biomass across sectors, assumes exogenous end-use product demand, and incorporates various geographical and technical constraints. We demonstrate this framework empirically by modelling the case of a sawmill-integrated biorefinery, which produces liquefied biomethane from forest industry residues. This case shows, among other things, the importance of acknowledging price change responses when evaluating supply chains. Paper [4] studies the relationship between green industrial policies and domestic biofuel production among 24 OECD countries over the period 2000-2016. This panel is estimated using a variant of the so-called Poisson pseudo-maximum-likelihood model, and incorporates the mix of demand-pull (biofuel blending mandates) and technology-push policies (government R&D), as well as the interaction between these two types of instruments. The results suggest that a more stringent blending mandate tends not only to increase the use of biofuels, but also domestic production. Government R&D has not, however, induced domestic biofuel industrialization processes. The results instead imply that these two polices target different technological fields, in turn leading to no positive interaction between demand-pull and technology-push policies. Finally, Paper [5] investigates the factors that tend to influence Swedish municipalities' uptake of green public procurement (GPP) practices in the transport sector. The analysis builds on survey responses from civil servants representing 140 Swedish municipalities, complemented by secondary data on, for instance, municipality size. The survey collected information about both individual (e.g., education) and organizational characteristics (e.g., strategies). These data were used to estimate a bivariate probit model, which addresses the endogeneity in the GPP decision-making process. The results indicate that municipality size increases the likelihood of adopting a GPP strategy but decreases the likelihood for GPP uptake. This suggests that larger municipalities benefit from more resources (e.g., staff), but suffer from a larger organizational distance between the procuring and environmental departments. Finally, the results lend meagre support to the street-level bureaucracy hypothesis, i.e., that individual characteristics influence the uptake of GPP.

The purpose of this study is to empirically investigate the environmental Kuznets curve (EKC) relationship between water quality and income within the European Union, considering spatial interdependences across countries. To this end, we apply a spatial econometrics framework using panel data, at the national level, for twenty EU countries across seventeen years, 1998 to 2014. Furthermore, we account for the role of human and livestock population size, institutional quality and economic openness for water quality. Results show that a significant EKC relationship is seen with an inverted N-shaped relationship between income and water quality. Water quality is decreasing in income for low income levels, increasing in income when GDP per capita for medium income levels, and deteriorating for high income levels. Eight out of twenty countries have income levels associated with a declining water quality. Spatial spillovers between countries are significant. Higher livestock density levels are associated with lower levels of water quality, while institutional quality and openness to trade are positively associated with water quality.