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The goal for energy efficiency increases the cost of climate policy; Maalet foer energieffektivisering foerdyrar klimatpolitiken

Abstract

A goal of the Swedish energy and climate policy is that by the year 2020 reduce greenhouse gas emissions by 40 percent compared to 1990. This climate goal refers to those activities that are not coverage of the European emissions trading scheme and means that emissions to fall by around 20 million tonnes of carbon dioxide. Another goal is that by the year 2020 to reduce energy intensity, that is, the total energy in relative to GDP, by 20 percent compared with the corresponding quota in 2008. This report studied the costs to achieve both these objectives with economic instruments, particularly through changes in carbon and energy taxes. The quantitative analysis based on National Institute of General Equilibrium model for the Swedish economy (EMEC). The report's main conclusions are: - Energy intensity target could be costly. Our assessment is that the goal is not reached within the framework of the projected climate policy. This requires instruments tightening. The cheapest strategy for achieving energy intensity target is to let the energy taxes remain unchanged and instead raise the carbon tax to SEK 2.20 per kilogram of carbon dioxide. The tax increase is larger than that needed to achieve the climate target,  More>>
Publication Date:
Jul 01, 2010
Product Type:
Book
Resource Relation:
Other Information: Report to the Expert Group for Environmental Studies; ISSN 1653-8838; no.2010:4; 36 refs., figs., tabs.
Subject:
29 ENERGY PLANNING, POLICY AND ECONOMY; ENERGY EFFICIENCY; CLIMATES; ENVIRONMENTAL POLICY; GREENHOUSE GASES; SWEDEN; COST BENEFIT ANALYSIS
OSTI ID:
1010775
Research Organizations:
Ministry of Finance, Stockholm (Sweden). Expert Group for Environmental Studies
Country of Origin:
Sweden
Language:
Swedish
Other Identifying Numbers:
Other: ISBN 978-91-38-23463-1; TRN: SE1107055
Availability:
Available from http://www.ems.expertgrupp.se/
Submitting Site:
SWD
Size:
79 p. pages
Announcement Date:
Apr 11, 2011

Citation Formats

Broberg, Thomas, Forsfaelt, Tomas, and Oestblom, Goeran. The goal for energy efficiency increases the cost of climate policy; Maalet foer energieffektivisering foerdyrar klimatpolitiken. Sweden: N. p., 2010. Web.
Broberg, Thomas, Forsfaelt, Tomas, & Oestblom, Goeran. The goal for energy efficiency increases the cost of climate policy; Maalet foer energieffektivisering foerdyrar klimatpolitiken. Sweden.
Broberg, Thomas, Forsfaelt, Tomas, and Oestblom, Goeran. 2010. "The goal for energy efficiency increases the cost of climate policy; Maalet foer energieffektivisering foerdyrar klimatpolitiken." Sweden.
@misc{etde_1010775,
title = {The goal for energy efficiency increases the cost of climate policy; Maalet foer energieffektivisering foerdyrar klimatpolitiken}
author = {Broberg, Thomas, Forsfaelt, Tomas, and Oestblom, Goeran}
abstractNote = {A goal of the Swedish energy and climate policy is that by the year 2020 reduce greenhouse gas emissions by 40 percent compared to 1990. This climate goal refers to those activities that are not coverage of the European emissions trading scheme and means that emissions to fall by around 20 million tonnes of carbon dioxide. Another goal is that by the year 2020 to reduce energy intensity, that is, the total energy in relative to GDP, by 20 percent compared with the corresponding quota in 2008. This report studied the costs to achieve both these objectives with economic instruments, particularly through changes in carbon and energy taxes. The quantitative analysis based on National Institute of General Equilibrium model for the Swedish economy (EMEC). The report's main conclusions are: - Energy intensity target could be costly. Our assessment is that the goal is not reached within the framework of the projected climate policy. This requires instruments tightening. The cheapest strategy for achieving energy intensity target is to let the energy taxes remain unchanged and instead raise the carbon tax to SEK 2.20 per kilogram of carbon dioxide. The tax increase is larger than that needed to achieve the climate target, which was pushed by 0.5 million tonnes carbon dioxide equivalent. Energy intensity target reached, therefore the price of one expensive climate policy, GDP in 2020 expected to reach SEK 3 billion lower. - The main explanation for that the energy intensity target is not reached without further action is that nuclear power generation expected to increase significantly between 2008 and 2020. The measure of Energy intensity is sensitive to nuclear power production share of total energy production as heat losses in nuclear power plants are charged the total energy use. - Energy intensity target requires that the action takes place in Sweden. Earnings by exploiting the possibility of emissions trading to achieving the climate target is reduced and therefore the climate policy becomes more expensive. More action in the country lead to a larger surplus in Sweden's obligations to the EU and thus more uncommitted so-called quota units. If this surplus is sold to another country this reduces the cost of reaching the energy intensity target. - The financial crisis is expected to have long lasting negative effects on GDP. It contributes to that climate targets can be achieved with current tax levels. However, the financial crisis lead to structural changes which means increased energy intensity. The Annual GDP loss to reach the energy intensity target will then be higher than SEK 3 billion}
place = {Sweden}
year = {2010}
month = {Jul}
}