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Is Sweden comparatively advantageous in trading emission allowances under the EU Emission Trading Scheme? - Trade and compliance

Aldefors, Linus (2009)
Department of Economics
Abstract
This thesis has sought to answer the question if Sweden is comparatively advantageous in the trade with emission allowances in the EU Emission Trading Scheme (EU ETS) in 2005-2008. By analyzing the emission levels in the Swedish greenhouse gas abundant sectors and the compliance to the EU ETS, it was shown that Swedish production outperformed the emission targets every year studied, leaving a large amount of emission allowances to be sold. This is to a large extent due to the use of renewable sources of energy in the electricity and heating sectors which have also been especially targeted by government policies. It has also been shown that most Swedish industry sectors are competitively advantageous when the EU ETS is taken into account.... (More)
This thesis has sought to answer the question if Sweden is comparatively advantageous in the trade with emission allowances in the EU Emission Trading Scheme (EU ETS) in 2005-2008. By analyzing the emission levels in the Swedish greenhouse gas abundant sectors and the compliance to the EU ETS, it was shown that Swedish production outperformed the emission targets every year studied, leaving a large amount of emission allowances to be sold. This is to a large extent due to the use of renewable sources of energy in the electricity and heating sectors which have also been especially targeted by government policies. It has also been shown that most Swedish industry sectors are competitively advantageous when the EU ETS is taken into account. These measurements imply that Sweden has successfully managed to become efficient in the use of greenhouse gases i.e. comparatively advantageous in trading emission allowances. However, when analyzing Nord Pool trade data there is a contradictory relationship showing that Sweden not only has a negative net trade flow; it has gone from being a net exporter to a net importer of emission allowances. The reason for the discrepancy in this thesis is thought to be that Swedish firms emit more greenhouse gases abroad than at home. This is due to a measurement mismatch in the definition of Sweden. This thesis could therefore not conclusively answer whether Sweden is comparatively advantageous or not. (Less)
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@misc{1511513,
  abstract     = {This thesis has sought to answer the question if Sweden is comparatively advantageous in the trade with emission allowances in the EU Emission Trading Scheme (EU ETS) in 2005-2008. By analyzing the emission levels in the Swedish greenhouse gas abundant sectors and the compliance to the EU ETS, it was shown that Swedish production outperformed the emission targets every year studied, leaving a large amount of emission allowances to be sold. This is to a large extent due to the use of renewable sources of energy in the electricity and heating sectors which have also been especially targeted by government policies. It has also been shown that most Swedish industry sectors are competitively advantageous when the EU ETS is taken into account. These measurements imply that Sweden has successfully managed to become efficient in the use of greenhouse gases i.e. comparatively advantageous in trading emission allowances. However, when analyzing Nord Pool trade data there is a contradictory relationship showing that Sweden not only has a negative net trade flow; it has gone from being a net exporter to a net importer of emission allowances. The reason for the discrepancy in this thesis is thought to be that Swedish firms emit more greenhouse gases abroad than at home. This is due to a measurement mismatch in the definition of Sweden. This thesis could therefore not conclusively answer whether Sweden is comparatively advantageous or not.},
  author       = {Aldefors, Linus},
  keyword      = {econometrics,trade,Sweden,EU ETS,Comparative advantage,Kyoto Protocol,European Union Emission Trading Scheme,cap and trade,negative externality,international economics,Economics, econometrics, economic theory, economic systems, economic policy,Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik},
  language     = {eng},
  note         = {Student Paper},
  title        = {Is Sweden comparatively advantageous in trading emission allowances under the EU Emission Trading Scheme? - Trade and compliance},
  year         = {2009},
}