While support schemes to renewable energy are ubiquitous around the world today, there are few sy... more While support schemes to renewable energy are ubiquitous around the world today, there are few systematic welfare evaluations of their social benefits and costs in an economy-wide setting. We develop a general equilibrium cost-benefit rule to assess changes in quantity based subsidy schemes, "green" certificates, that support renewable electricity generation. An advantage to large-scale numerical models of the same issue is that we can go "into the black box" and uncover key economic mechanisms. We study a second-best economy with distorting taxes and pollution, so that a perturbation of the certificate scheme causes both benefits and costs; these items can be uncovered and estimated using our framework. To this end, we provide a user-friendly approximation for empirical implementation, which means that data requirement is modest relative to a typical computable general equilibrium model. We apply the theory to a currently existing scheme in Sweden taking into account "trickle-down" effects, including e.g. a loss of value-added tax income in the rest of the economy and environmental costs (i.e. externalities from electricity generation not currently internalized). We first present an ex post estimate, i.e. the welfare consequences of having scrapped the existing system 2003-2017 and then an ex ante analysis of extending the system to 2045. The latter includes a systematic sensitivity analysis based on Monte-Carlo simulation. Overall, we find net present value gains from removing the subsidy scheme, taking into account externalities, "trickle-down" and public finance repercussions.
In a nite-horizon general equilibrium model national income is the value of output at supporting... more In a nite-horizon general equilibrium model national income is the value of output at supporting prices and a perturbation increases welfare if and only if it raises national income. We show how to extend these results to an in nite horizon representative agent model, and in the process relate them to a debate about how to measure welfare in a dynamic model, how to measure green national income," and how to measure sustainability." The obvious extension has all the right properties it measures national income, provides an if and only if welfare increase criterion, and acts as a good indicator of sustainability. Our measure is observable and has been measured for a number of countries. Our index is a Fisherian wealth measure and our results represent the completion of a research agenda set out by Samuelson in 1961. JEL Classi cation:
In the original published article, the sentence “Nevertheless, semi-natural forest remnants conti... more In the original published article, the sentence “Nevertheless, semi-natural forest remnants continue to be harvested and fragmented (Svensson et al. 2018; Jonsson et al. 2019), and over 2000 forest-associated species (of 15 000 assessed) are listed as threatened on Sweden’s red-list, largely represented by macro-fungi, beetles, lichens and butterflies (Sandström 2015).”under the section Introduction was incorrect. The correct version of the sentence is “Nevertheless, semi-natural forest remnants continue to be harvested and fragmented (Svensson et al. 2018; Jonsson et al. 2019), and approximately 2000 forest-associated species (of 15 000 assessed) are on Sweden’s red-list, largely represented by macro-fungi, beetles, lichens and butterflies (Sandström 2015).”
The multi-scale approach to conserving forest biodiversity has been used in Sweden since the 1980... more The multi-scale approach to conserving forest biodiversity has been used in Sweden since the 1980s, a period defined by increased reserve area and conservation actions within production forests. However, two thousand forest-associated species remain on Sweden’s red-list, and Sweden’s 2020 goals for sustainable forests are not being met. We argue that ongoing changes in the production forest matrix require more consideration, and that multi-scale conservation must be adapted to, and integrated with, production forest development. To make this case, we summarize trends in habitat provision by Sweden’s protected and production forests, and the variety of ways silviculture can affect biodiversity. We discuss how different forestry trajectories affect the type and extent of conservation approaches needed to secure biodiversity, and suggest leverage points for aiding the adoption of diversified silviculture. Sweden’s long-term experience with multi-scale conservation and intensive forestr...
OECD Studies on Environmental Policy and Household Behaviour, 2014
This chapter reviews the evidence collected in the survey on households’ energy-related behaviour... more This chapter reviews the evidence collected in the survey on households’ energy-related behaviour and their responses to various types of policies targeting renewable energy and energy efficiency. It also examines differences in behaviour across households and the effect of norms and attitudes, such as the perception of environmental issues.
In this chapter we present a second study relating to a re-regulation of the same river (Ljusnan)... more In this chapter we present a second study relating to a re-regulation of the same river (Ljusnan) as the one considered in the previous chapter. The basic idea is to design a package of different measures such that virtually everybody is at least as well off with as without the proposal. Thus it is a kind of Win-Win proposal. We begin by briefly discussing the theoretical underpinnings of the approach. Then the study is presented. Two dams at the end of the river are removed. This is the –2-part of the proposal. Salmon will then be able to migrate some 150 km to the natural barrier. Today they cannot enter the river. There are also other environmental benefits. The company owning the dams is thus far a loser. However the company is allowed to drill a tunnel and install new turbines close to the natural barrier. This which we name the +1-part of the proposal will leave the company a winner from the proposal. A web-based questionnaire was used to shed some light on the views on the proposal by those living in the drainage basin of Ljusnan River. The results of the different parts of the proposal are presented in the chapter.
The Centre for Environmental and Resource Economics (CERE) is an inter-disciplinary and inter-uni... more The Centre for Environmental and Resource Economics (CERE) is an inter-disciplinary and inter-university research centre at the Umeå Campus: Umeå University and the Swedish University of Agricultural Sciences. The main objectives with the Centre are to tie together research groups at the different departments and universities; provide seminars and workshops within the field of environmental & resource economics and management; and constitute a platform for a creative and strong research environment within the field. Two-step approach to Self-Selected
Written by two leading experts, this is a compact guide to the key tools and methods necessary to... more Written by two leading experts, this is a compact guide to the key tools and methods necessary to carry out cost-benefit analysis (CBA). The authors use modern economic tools to obtain general equilibrium cost-benefit rules that can be used to evaluate small projects, as well as large and even mega projects. Intertemporal issues like discounting, the shadow price of capital, and the treatment of risk are covered, and a state-of-the-art summary of available methods for the valuation of unpriced commodities is also included. In addition, the book provides detailed expositions of the marginal cost of public goods (MCPF), the marginal excess burden of taxes (MEB), and second-best evaluation rules, and shows how these concepts are interrelated. The importance of undertaking due diligence in evaluations is highlighted. This is an excellent toolkit for graduate students learning about the principles of CBA, and is a useful guide for government officials and policymakers.
The contingent valuation method using discrete response (yes or no) valuation questions is by now... more The contingent valuation method using discrete response (yes or no) valuation questions is by now one of the most often used methods to measure the value of environmental goods. The idea of asking the individual to accept or reject a given price for an environmental ...
There is a widespread recognition that we need to revise our methods of measuring national income... more There is a widespread recognition that we need to revise our methods of measuring national income to incorporate better the impact of economic activity on environmental assets. Our aim here is to investigate alternative concepts of national income in a dynamic economy, one a generalization of Hicksian income and the other a generalization of the welfare economics concept of income
While support schemes to renewable energy are ubiquitous around the world today, there are few sy... more While support schemes to renewable energy are ubiquitous around the world today, there are few systematic welfare evaluations of their social benefits and costs in an economy-wide setting. We develop a general equilibrium cost-benefit rule to assess changes in quantity based subsidy schemes, "green" certificates, that support renewable electricity generation. An advantage to large-scale numerical models of the same issue is that we can go "into the black box" and uncover key economic mechanisms. We study a second-best economy with distorting taxes and pollution, so that a perturbation of the certificate scheme causes both benefits and costs; these items can be uncovered and estimated using our framework. To this end, we provide a user-friendly approximation for empirical implementation, which means that data requirement is modest relative to a typical computable general equilibrium model. We apply the theory to a currently existing scheme in Sweden taking into account "trickle-down" effects, including e.g. a loss of value-added tax income in the rest of the economy and environmental costs (i.e. externalities from electricity generation not currently internalized). We first present an ex post estimate, i.e. the welfare consequences of having scrapped the existing system 2003-2017 and then an ex ante analysis of extending the system to 2045. The latter includes a systematic sensitivity analysis based on Monte-Carlo simulation. Overall, we find net present value gains from removing the subsidy scheme, taking into account externalities, "trickle-down" and public finance repercussions.
In a nite-horizon general equilibrium model national income is the value of output at supporting... more In a nite-horizon general equilibrium model national income is the value of output at supporting prices and a perturbation increases welfare if and only if it raises national income. We show how to extend these results to an in nite horizon representative agent model, and in the process relate them to a debate about how to measure welfare in a dynamic model, how to measure green national income," and how to measure sustainability." The obvious extension has all the right properties it measures national income, provides an if and only if welfare increase criterion, and acts as a good indicator of sustainability. Our measure is observable and has been measured for a number of countries. Our index is a Fisherian wealth measure and our results represent the completion of a research agenda set out by Samuelson in 1961. JEL Classi cation:
In the original published article, the sentence “Nevertheless, semi-natural forest remnants conti... more In the original published article, the sentence “Nevertheless, semi-natural forest remnants continue to be harvested and fragmented (Svensson et al. 2018; Jonsson et al. 2019), and over 2000 forest-associated species (of 15 000 assessed) are listed as threatened on Sweden’s red-list, largely represented by macro-fungi, beetles, lichens and butterflies (Sandström 2015).”under the section Introduction was incorrect. The correct version of the sentence is “Nevertheless, semi-natural forest remnants continue to be harvested and fragmented (Svensson et al. 2018; Jonsson et al. 2019), and approximately 2000 forest-associated species (of 15 000 assessed) are on Sweden’s red-list, largely represented by macro-fungi, beetles, lichens and butterflies (Sandström 2015).”
The multi-scale approach to conserving forest biodiversity has been used in Sweden since the 1980... more The multi-scale approach to conserving forest biodiversity has been used in Sweden since the 1980s, a period defined by increased reserve area and conservation actions within production forests. However, two thousand forest-associated species remain on Sweden’s red-list, and Sweden’s 2020 goals for sustainable forests are not being met. We argue that ongoing changes in the production forest matrix require more consideration, and that multi-scale conservation must be adapted to, and integrated with, production forest development. To make this case, we summarize trends in habitat provision by Sweden’s protected and production forests, and the variety of ways silviculture can affect biodiversity. We discuss how different forestry trajectories affect the type and extent of conservation approaches needed to secure biodiversity, and suggest leverage points for aiding the adoption of diversified silviculture. Sweden’s long-term experience with multi-scale conservation and intensive forestr...
OECD Studies on Environmental Policy and Household Behaviour, 2014
This chapter reviews the evidence collected in the survey on households’ energy-related behaviour... more This chapter reviews the evidence collected in the survey on households’ energy-related behaviour and their responses to various types of policies targeting renewable energy and energy efficiency. It also examines differences in behaviour across households and the effect of norms and attitudes, such as the perception of environmental issues.
In this chapter we present a second study relating to a re-regulation of the same river (Ljusnan)... more In this chapter we present a second study relating to a re-regulation of the same river (Ljusnan) as the one considered in the previous chapter. The basic idea is to design a package of different measures such that virtually everybody is at least as well off with as without the proposal. Thus it is a kind of Win-Win proposal. We begin by briefly discussing the theoretical underpinnings of the approach. Then the study is presented. Two dams at the end of the river are removed. This is the –2-part of the proposal. Salmon will then be able to migrate some 150 km to the natural barrier. Today they cannot enter the river. There are also other environmental benefits. The company owning the dams is thus far a loser. However the company is allowed to drill a tunnel and install new turbines close to the natural barrier. This which we name the +1-part of the proposal will leave the company a winner from the proposal. A web-based questionnaire was used to shed some light on the views on the proposal by those living in the drainage basin of Ljusnan River. The results of the different parts of the proposal are presented in the chapter.
The Centre for Environmental and Resource Economics (CERE) is an inter-disciplinary and inter-uni... more The Centre for Environmental and Resource Economics (CERE) is an inter-disciplinary and inter-university research centre at the Umeå Campus: Umeå University and the Swedish University of Agricultural Sciences. The main objectives with the Centre are to tie together research groups at the different departments and universities; provide seminars and workshops within the field of environmental & resource economics and management; and constitute a platform for a creative and strong research environment within the field. Two-step approach to Self-Selected
Written by two leading experts, this is a compact guide to the key tools and methods necessary to... more Written by two leading experts, this is a compact guide to the key tools and methods necessary to carry out cost-benefit analysis (CBA). The authors use modern economic tools to obtain general equilibrium cost-benefit rules that can be used to evaluate small projects, as well as large and even mega projects. Intertemporal issues like discounting, the shadow price of capital, and the treatment of risk are covered, and a state-of-the-art summary of available methods for the valuation of unpriced commodities is also included. In addition, the book provides detailed expositions of the marginal cost of public goods (MCPF), the marginal excess burden of taxes (MEB), and second-best evaluation rules, and shows how these concepts are interrelated. The importance of undertaking due diligence in evaluations is highlighted. This is an excellent toolkit for graduate students learning about the principles of CBA, and is a useful guide for government officials and policymakers.
The contingent valuation method using discrete response (yes or no) valuation questions is by now... more The contingent valuation method using discrete response (yes or no) valuation questions is by now one of the most often used methods to measure the value of environmental goods. The idea of asking the individual to accept or reject a given price for an environmental ...
There is a widespread recognition that we need to revise our methods of measuring national income... more There is a widespread recognition that we need to revise our methods of measuring national income to incorporate better the impact of economic activity on environmental assets. Our aim here is to investigate alternative concepts of national income in a dynamic economy, one a generalization of Hicksian income and the other a generalization of the welfare economics concept of income
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Papers by Bengt Kriström