Why refund emission payments to the polluters?

Why refund emission payments to the polluters?
Lessons learnt from the Swedish NOx charge on stationary sources

Since 1992 all Swedish combustion plants with an annual production of at least 25 GWh energy pay 5 Euro per kg NOx emitted. The collected revenues are returned to the same plant owners but now distributed by the amount of energy produced. The system creates incentives for the polluters to constantly look for ways to improve emission intensity per unit of output in relation to the peer polluters in the system. Theoretically the system design violates the Polluter Pays Principle, but empirical evidence suggests that it has effectively reduced NOx emissions from large stationary sources in Sweden and that it has been a driver for development of NOx abatement technology in Sweden. What can we learn from the Swedish NOx charge and when can refunding of emission payments be justified? These are some of the questions addressed during this seminar. The seminar is an update of a presentation given at the OECD Global Forum on Eco-innovation in April 2009.

 
Presenter: Dr. Lena Höglund-Isaksson

Dr. Lena Höglund-Isaksson is a senior research scholar in the Mitigation of Air Pollution and Greenhouse Gases (MAG) Program at the International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria. She joined IIASA in 2004 and has developed and implemented the methane module in IIASA’s GAINS model. She leads various policy applications of the GAINS model on anthropogenic emissions of non-CO2 greenhouse gases, e.g., non-CO2 projections to 2030 and 2050 for the EU’s energy and climate packages (2008, 2010, and 2013). She has also contributed global methane assessments and projections to other policy forums, e.g., UNEP and the Arctic Council. Dr. Höglund-Isaksson earned her PhD in environmental economics in 2000 from the University of Gothenburg. Her other research interests include theoretical and empirical aspects of environmental policy instruments, in particular refund schemes. She has approximately 20 peer-reviewed publications and has authored or co-authored a large number of policy papers and consultancy reports. Her previous positions include a post-doc at the University of Vienna and research assistant at University of Gothenburg. She has held short-term employments with the World Bank and Sida and done consultancy work for OECD and IAEA. She has taught microeconomics at the Universities of Vienna and Gothenburg, and environmental economics at Skovde University College.