We propose a method for estimating hurdle rates for firms’ investments in pollution abatement technology, using ex post data. The method is based on a structural option value model where the future price of polluting fuel is the major source of uncertainty facing the firm. The econometric...

We test the hypothesis that people conform to certain social norms, i.e. that some individuals may be willing to pay a higher price premium for green products the more widespread green consumerism is in society. To investigate consumer preferences for environmentally friendly products, we...

The European Union’s Emissions Trading Scheme (EU-ETS) is so far the largest emissions trading system in the world. It covers about 12000 installations, representing approximately 45% of EU emissions of CO2, with the objective to establish a carbon price creating incentives for cost efficient...

The idea of Personal Carbon Allowances (PCAs) was presented by the British Environment Secretary David Miliband in 2006. Although no state is seriously developing proposals for them, they have been heavily debated within academia, NGOs and policy making circles. PCAs can be seen as a logical...

Using a structural decomposition analysis, we analyze the causes of reduction in emitted sulfur originating from the manufacturing industry in Sweden during 1976-1995. We also analyze how policy instruments work with respect to sulfur emissions. We conclude that the sulfur tax has been important...

We examine the effect of addictive behavior on a socially optimal environmental tax. If utility in part depends on past consumption and individuals are time-consistent, the socially optimal environmental tax is shown to be equal to the conventional Pigovian tax. In a second-best world where the...

This study undertakes a decomposition analysis to identify the drivers of carbon emissions change in the Swedish business and industry sectors 1993 - 2006. On aggregate, energy intensity decreased, but this does not seem to have been very important for reducing emissions. Rather, fuel...

We analyze how habit formation affects optimal environmental taxation, when consumption of a habitual good causes a negative external effect on the environment. In a simple two-period model, we show that optimal taxation is still Pigouvian, where tax rates equal marginal damage in each period....

We find that through labeling one can significantly affect attitudes towards a tax. The gasoline tax meets a stronger reluctance than virtually the same tax when it is called the CO2 tax on gasoline. <p>

In this article we propose a model in which individuals experience habit formation in environmental quality. Further, a consumption good causes a negative external effect on the environment.The intertemporal utility of a benevolent social planner depends on consumption of two goods and the...