Environmental Policy in Sweden

Abstract:     
We make an attempt to shed light on how Swedish environmental policy has evolved over the years in response to changing environmental problems as well as changing priorities. Our analysis covers the past, the present and, in a sense, the future. A central point we try to make is that the chosen regulatory framework has secured substantial environmental improvements at a reasonable cost. To buttress this finding we provide an in-depth analysis of the institutional set-up, the benefits in terms of reduced emissions as well as the direct and indirect costs of environmental regulations. We also scrutinize the recent shift towards using economic instruments in environmental policy. Section II outlines major environmental problems that have challenged environmental policy in the past. Section III describes the organizational framework, the major environmental laws, and some comparative analysis across a number of similar countries. In section IV we turn to estimates of the benefits and costs associated with the pursued policy, using a two-layer analysis (individual firm/country). Section V provides material on how environmental taxes are constructed and used as well as how they have favored. Included here is a detailed analysis of the double-dividend issue, that has been high on the agenda in the latter part of the 1990s. We end with some remarks on what we believe are fruitful future directions of environmental policy in Sweden.

JEL Classification: Q20, A23, H5, H20, H23, L5, L60

working papers series