Nitrogen and sulphur outcomes of a carbon emissions target excluding traded allowances — The Swedish case 2020

Abstract

Sweden's current climate policy affects domestic combustion of fossil fuels and, thus, produces synergies on the policies aiming at reducing NO x and SO 2 emissions. A matter of climate policy recently discussed by the Swedish Government, however, is to adopt a carbon emissions target, which excludes traded CO 2 allowances. Although, this redefined carbon emissions target could be attained at the least costs through emissions trading, it will obstruct the ancillary benefits of reduced SO 2 and NO x emissions arising from the current climate policy. The findings, here, suggest that additional policy instruments would have to decrease the SO 2/GDP and NO x /GDP ratios by 48 and 72%, respectively for the 2020 carbon emissions target, in order to counteract the obstruction of ancillary benefits. Here, the emission multipliers of carbon emissions trading sectors distinguish from those of non-trading sectors when introduced into the interindustry model and applied to official emissions projections in examining the nitrogen and sulphur outcomes of Sweden's climate policy for 2020.