Premediation analysis of the energy taxation dispute in Finland

Abstract

This paper illustrates a real application of negotiation and decision analytic techniques to a long-continued dispute between industry and the environmentalists in Finland. Specifically, we applied the so-called premediation analysis to discover efficient compromise solutions for Finland’s future energy taxation problem. The author’s role was to act as a neutral mediator. The premediation included the elicitation of the fundamental objectives of the disputants as well as their preferences relating to the issues under negotiation. The quantitative analysis pointed out several efficient compromise solutions to the dispute, implying that it was worth negotiating rather than unilaterally seeking to influence the state authorities. This induced the participants to start unofficial face-to-face negotiations mediated by the author. The compromise achieved together with the contacts created during the post-analysis negotiations contributed immediately to the Finnish Government’s first move towards a real ecological tax reform. Later on, the Government implemented a refund scheme for the industry that resembled by and large the one outlined in the post-analysis negotiations. This study thus provides a clear indication of the usefulness of the premediation concept in an unsettled conflict situation, where the disputants have not earlier tried to resolve their disagreements by negotiating.