Allocation and Ex Ante Cost Efficiency of a Swedish Subsidy for Environmental Sustainability: The Local Investment Program

We evaluate the allocation rationality and ex ante cost efficiency of a major Swedish investment subsidy program, the “Local Investment Program” (LIP). The LIP, effective between 1998-2002, had dual purposes: to step up the pace at which Sweden transforms into an ecologically sustainable society and to reduce unemployment. During the program period, more than 6.2 billion Swedish kronor (approximately Euro 670 million) were granted to different municipal projects. By using data on the projects’ subsidies and anticipated environmental and employment effects, we find that these effects to a high degree explain the magnitude of the subsidy granted. We find that the marginal LIP subsidy for carbon dioxide (CO2) reductions does not vary significantly over the projects, implying that the LIP was cost efficient for such reductions. Furthermore, for a majority of the projects, the marginal subsidy for CO2 reductions was lower than the, at the time, prevailing CO2 tax. Assuming successful project fulfillment, we conclude that the LIP was a low cost, cost efficient environmental policy for reducing CO2 emissions provided that the projects generate spillover effects large enough to justify the subsidy.Environmental policy; evaluation; greenhouse gas; spillover effect; subsidy

Financial implications of relationship breakdown: Does marriage matter?

In raw data in the UK, the income loss on separation for women who were cohabiting is less than the loss for those who were married. Cohabitants lose less even after controlling for observable characteristics including age and the number of children. This difference is not explained by differences in access to benefits or labor supply responses after separation. In contrast, there is no difference in the change in household income experienced by cohabiting and married men who do better on average than both groups of women. We show that the difference for women arises because of differences in the use of family support networks: cohabitants’ standard of living falls by less because they are more likely to live with other adults, particularly their family, following separation, even after controlling for age and children. Divorced women do not return to living with their extended families. The greater legal protection offered by marriage does not appear to translate into economic protection.Fisher acknowledges the support of the Australian Research Council Discovery Project (DP150101718) and Australian Research Council Centre of Excellence for Children and Families over the Life Course (CE140100027). The Centre is administered by the Institute for Social Science Research at The University of Queensland, with nodes at The University of Western Australia, The University of Melbourne and The University of Sydney. The views expressed in this paper are not necessarily those of the Australian Research Council. Low thanks funding from the ESRC as a Research Fellow, grant number RES-063-27-0211.This is the author accepted manuscript. The final version is available from Springer via http://dx.doi.org/10.1007/s11150-015-9292-

Can We Buy Time? Evaluation of the Government’s Directed Grant to Remediation in Sweden

The interim targets of the Swedish environmental quality objective “A non-toxic environment” emphasize that remediation of contaminated sites should progress at a high speed. Since remediation is an expensive venture, it is valuable to gain knowledge about where in the remediation process government funding affects the pace of progress the most. In this paper we analyze how government funding, in the form of a directed grant, affects the pace of progress in four different states of the remediation process. The estimation is performed in a simultaneous sequential duration model in which a site has to exit a state to be eligible for inclusion in the following state. We control for a number of variables that may also affect the pace of the remediation process, such as the municipal tax base and the site’s level of contaminants. Although there is heterogeneity between the sites that contribute to making remediation a slow process, our analyses show that the directed grant positively affects the probability of leaving the first and third states. We identify the third state (i.e., the time between the end of a thorough risk classification and the inception of on-site remediation)as the remediation process’ bottleneck. Even if the directed grant can speed up the process in this state, the effect is minuscule compared to the amount of directed grants needed to do so.

Matters Risk? The Allocation of Government Subsidies for Remediation of Contaminated Sites under the Local Investment Programme

In this paper we evaluate how the environmental and health risks posed by a contaminated site affected the probability that it would receive funding for remedial action under a Swedish subsidization scheme, the Local Investment Programme (LIP). The LIP, effective between 1998 and 2002, had a twofold purpose: to step up the pace at which Sweden becomes an ecologically sustainable society and to reduce unemployment. Under the LIP, almost € 43 million (SEK 400 million) were granted to various municipal projects aimed at remediation of contaminated sites. In analyzing data on both subsidized and non-subsidized remediation projects, we unexpectedly find that the more hazardous a site, the less the probability of its receiving funding. Thus, contrary to the “worst things first” strategy officially adopted by the Swedish Parliament for remediation of contaminated sites, our results reveal a risk-avoiding allocation of government subsidies. Furthermore, the number of employment opportunities generated by remediation projects positively affects the probability of receiving a LIP subsidy. Although more faithful observance of the official strategy would have been desirable, the most highly contaminated sites at least received the most money. Based on our findings, we believe that extensive information about the hazards posed by contaminated sites is necessary to ensure better decisions on remediation funding and more efficient use of public resources in the future.

Does remediation save lives? On the cost of cleaning up arsenic-contaminated sites in Sweden

Swedish environmental policy is based on 16 environmental quality objectives (Gov. Bill 2000/01:130 and Gov.Bill 2004/05:150).1 One of the most challenging objectives,‘A non toxic environment’, has two interim targets that concern remediation of contaminated sites. In sum, they state that the highest priority should be given to sites posing the highest risks to human health and the environment.2 By eliminating pollutants in soil, groundwater and sediment, the interim targets aim to reduce risks to human health and the environment. In Sweden, 83,000 sites are potentially contaminated due to previous industrial activities. According to the Swedish Environmental Protection Agency (EPA), the administrator of the governmental funds for remediation, approximately 1500 of these sites contain contaminant concentrations that could seriously harm human health and the environment (Swedish EPA, 2008a). To reach the interim targets, all these sites need to be remediated by 2050. Remediation of contaminated sites has so far cost more than SEK 3,000 million.3 The approximated cost to mitigate the potential risks at the most harmful sites is estimated at SEK 60,000 million.4 The Swedish government’s funding for remediation presently comes in the form of a directed grant (sakanslag). The directed grant, administrated by the Swedish EPA, subsidises remediation of contaminated sites that were contaminated prior to modern environmental legislation (in 1969) or for which no liable party can be found. The directed grant amounts to approximately 455 millions annually, which corresponds to about 10 percent of the annual national funds for environmental protection (Gov. Bill 2007/08:1). To make it possible to prioritise among contaminated sites, the Swedish EPA has developed a method for risk assessment called the ‘MIFO’ (i.e. the Method for Inventory of Contaminated Sites). The risk assessment does not take into account the actual exposure at a contaminated site. Risk is instead assessed based on divergence from guideline values for acceptable concentrations given a standardised (i.e. worst case) exposure situation on an individual level. This means that a site can be remediated without any individuals actually being exposed. The expected risk reduction is consequently not quantified. This eliminates the possibility of valuing the risk reduction, which should be weighed against the remediation cost. The purpose of this paper is to analyse how health effects, in the form of cancer risks, from sites contaminated by arsenic are valued implicitly in remediation. By using an environmental medicine approach that takes exposure into account, and without underestimating the potential health consequences of arsenic exposure, our purpose is to place arsenic risk management in the overall picture of live-saving interventions. In the case of cancer prevention, it is necessary to recognise that focus on an environmental carcinogen like arsenic may draw public attention – and funding – away from mental health risks like ambient air pollution and indoor radon. Although environmental pollution accounts for less than ten percent of all cancer cases (Harvard Centre for Cancer Prevention, 1996; Saracci and Vineis, 2007), environmental factors are important to recognize since they may be preventable. We emphasise, however, the inefficiency in becoming overly concerned about small risks while, at the same time, losing sight of the large risks. If society’s spending on lifesaving measures with small effects (i.e. a small number of lives saved) crowds out spending on lifesaving measures with large effects, then remediation can, in fact, even be said to waste lives. By using data on 23 arsenic-contaminated sites in Sweden, we estimate the sitespecific cancer risks and calculate the cost per life saved by using the sites’ remediation costs. Our results show that the cost per life saved through remediation is much higher than that associated with other primary prevention measures, indicating that the ambition level of Swedish remediation may be too high.

Scenarios and Sustainability A Swedish Case Study of Adaptation Tools for Local Decision-Makers

Adaptation to climate change often involves long time frames and uncer-tainties over consequences of chosen adaptation measures. In this study, two tools developed for assisting local decision-makers in adaptation planning were tested: socio-economic scenarios and sustainability analy-sis. The objective was to study whether these tools could be of practical relevance to Swedish municipalities and foster local level climate change adaptation. We find that the municipal civil servants who participated in the testing generally considered the tools to be useful and of high rele-vance, but that more time was needed for using the tools than provided during the test process.climate change; adaptation; socio-economic scenarios; goal conflict; cost-benefit analysis

Allocation and Ex Ante Cost Efficiency of a Swedish Subsidy for Environmental Sustainability: The Local Investment Program ALLOCATION AND EX ANTE COST EFFICIENCY OF A SWEDISH SUBSIDY FOR ENVIRONMENTAL SUSTAINABILITY: THE LOCAL INVESTMENT PROGRAM Allocatio

Abstract We evaluate the allocation rationality and ex ante cost efficiency of a major Swedish investment subsidy program, the "Local Investment Program" (LIP). The LIP, effective between 1998-2002, had dual purposes: to step up the pace at which Sweden transforms into an ecologically sustainable society and to reduce unemployment. During the program period, more than 6.2 billion Swedish kronor (approximately C = 670 million) were granted to different municipal projects. By using data on the projects' subsidies and anticipated environmental and employment effects, we find that these effects to a high degree explain the magnitude of the subsidy granted. We find that the marginal LIP subsidy for carbon dioxide (CO 2 ) reductions does not vary significantly over the projects, implying that the LIP was cost efficient for such reductions. Furthermore, for a majority of the projects, the marginal subsidy for CO 2 reductions was lower than the, at the time, prevailing CO 2 tax. Assuming successful project fulfillment, we conclude that the LIP was a low cost, cost efficient environmental policy for reducing CO 2 emissions provided that the projects generate spillover effects large enough to justify the subsidy

Allocation and ex ante cost efficiency of a Swedish subsidy for environmental sustainability : the local investment program

We evaluate the allocation rationality and ex ante cost efficiency of a major Swedish investment subsidy program, the “Local Investment Program” (LIP). The LIP, effective between 1998-2002, had dual purposes: to step up the pace at which Sweden transforms into an ecologically sustainable society and to reduce unemployment. During the program period, more than 6.2 billion Swedish kronor (approximately Euro 670 million) were granted to different municipal projects. By using data on the projects’ subsidies and anticipated environmental and employment effects, we find that these effects to a high degree explain the magnitude of the subsidy granted. We find that the marginal LIP subsidy for carbon dioxide (CO2) reductions does not vary significantly over the projects, implying that the LIP was cost efficient for such reductions. Furthermore, for a majority of the projects, the marginal subsidy for CO2 reductions was lower than the, at the time, prevailing CO2 tax. Assuming successful project fulfillment, we conclude that the LIP was a low cost, cost efficient environmental policy for reducing CO2 emissions provided that the projects generate spillover effects large enough to justify the subsidy

Incentives and outcomes: Evaluation of a Swedish environmental subsidy programme

This paper empirically evaluates a Swedish government subsidy to environmental sustainability, the Local Investment Programme (LIP). During the programme period, 1998�-�2002, more than 670 million was granted to 1814 different municipal projects, making it the largest Swedish subsidization to ecological sustainability to date. For the 682 projects evaluated here, it was found that the projects were rewarded smaller subsidies than granted. To explain the gap between granted and rewarded subsidies, the gap was decomposed into a quantity effect, depending on the quantified environmental and employment outcomes of the projects, and a price effect, depending on the government's valuation of these outcomes. Whereas no statistically significant quantity effect was found, there was a large statistically significant price effect, indicating that the government paid the municipalities less than promised in the granting decision.

Economics without markets. Four papers on the Contingent Valuation and Stated Preference Methods

This thesis consists of four papers. The first two papers deal with the valuation of an endangered species, the African elephant. The third paper is on the assessment of attribute values for work trips. The fourth paper models the number of alternative travel modes for work trips. Paper [I] reports benefit estimates from a Contingent Valuation (CV) survey of Swedish households' willingness to pay (WTP) for the preservation of the African elephant. Methodological aspects of the CV method are addressed, such as the method's susceptibility to variations in the payment vehicle and in the time-horizon of the payment obligation. None of the treatments have significant impact on the WTP. Paper [II] analyses determinants of the WTP from Paper [I]. A double hurdle model for household choice is formulated where the household first decides whether to give to elephant protection or not and, then, decides on the size of the donation. The model is estimated with Heckman's two-step estimator. With one exception, the determinants significant for the decision to give are not the same as the ones significant for the decision on how much to give. Paper [III] uses stated preference data to estimate the values of time and safety for work trips. In standard and random parameters logit models the respondent's modal choice is related to the perceived time, cost, safety, and environmental friendliness or flexibility of the alternatives. The perceived time, cost and safety are shown to significantly affect the choice of work trip travel mode. From the estimated models we assess attribute values for time and safety. Paper [IV] estimates two count data models, an ordinary Poisson and a polynomial Poisson of order one (PP1), to explain the individual's number of alternative travel modes for work trips. The PP1 model, which allows for departures from equidispersed data, cannot improve the Poisson model. The individual's income and the distance to the workplace are found to affect the number of alternative travel modes for work trips.Intertemporal Embedding; Discrete/Continuous Choice; Value of Statistical Life; Value of Time; Random Parameters Logit; Count Data; Choice Set Size