Working paper: Diffusion of NOx abatement technologies in Sweden
Jorge Bonilla, University of Gothenburg and Universidad de los Andes, Jessica Coria, University of Gothenburg, Kristina Mohlin, University of Gothenburg,Thomas Sterner, University of Gothenburg
This paper studies how different NOx abatement technologies have diffused under the Swedish system of refunded emissions charges and analyzes the determinants of the time to adoption. The policy, under which the charge revenues are refunded back to the regulated firms in proportion to energy output, was explicitly designed to affect investment in NOx-reducing technologies.
The results indicate that paying a higher net NOx charge increases the likelihood of adoption, but only for end-of-pipe post-combustion technologies. We also find some indication that market power considerations in the heat and power industry reduce the incentives to abate emissions through investment in postcombustion technologies. Adoption of post-combustion technologies and the efficiency improving technology of flue gas condensation is also more likely in the heat and power and waste incineration sectors, which is possibly explained by a large degree of public ownership in these sectors.
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