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LIP from a Socio-Economic  Perspective: -an evaluation of state funding of Local Investment Programmes for ecological sustainability in Sweden
2005 (English)Report (Other academic)
Abstract [en]

This report is the result of an evaluation of Swedish Local Investment Programmes from a socio-economic perspective. The evaluation was conducted by researchers at the International Institute of Industrial Environmental Economics (IIIEE) and commissioned by the Swedish Environmental Protection Agency. Investment programme funding was available between 1998 and 2002. A total of SEK 6.2 billion was granted to 211 programmes in 161 municipalities (representing 55 per cent of all Swedish municipalities). Each programme involved a number of measures, often investments. The measures were carried out by the municipalities themselves or by private enterprise. An average of 25 per cent of the investment costs were funded. Out of a large number of measures of various kinds, this evaluation focuses on those resulting in reductions of CO2, NOX or SO2. We have calculated indicators of the costeffectiveness of the funding, in relation to these environmental effects as well as effects on employment. The evaluation includes a qualitative discussion of the impact of the funding on the introduction of new technologies and new methods. The results were surprisingly positive, as criticisms and concerns have previously been voiced about the funding scheme. Measures reducing emissions of CO2 have had an average state investment cost of SEK 0.12 (€0.013), assuming an annuity factor of 0.1 on the investment cost. This estimate assumes all other desirable effects to have a value of zero, even when significant results are reported. A sizeable portion of the investments were made in sectors achieving a carbon tax reduction. From an environmental economics perspective, the scheme has been of benefit to society in these cases, since the tax reductions (society’s loss) are larger than the funding (society’s cost). We identified two mechanisms we believe have contributed to the strong performance of the completed programmes in this evaluation compared to previous reports on projects in receipt of state funding. The first mechanism – "progressive selection" - describes how less cost-effective projects have been abandoned during the LIP process from discussion of ideas at municipal level, through application and on to granting of subsidies. Even after funding has been granted, many projects have not been carried out because municipalities or private actors have decided they were not cost-effective enough. The second mechanism is "constructive evolution" and represents the flexibility inherent in the system. The project owners were allowed to change the scope and design of their projects as long as their relative cost-effectiveness remained at least the same (if not better). Funding was never increased. This procedure was carried out in a written dialogue between the municipality and the Swedish EPA so that each step and statement is a public document available for anybody to scrutinise. This funding scheme has led to testing of new technology and new forms of cooperation. Unlike traditional subsidies targeted at technology developers, the LIP investments were channelled via existing customers, thus creating a demand-fuelled stimulus for new technology. Examples were found of successful investments that were later repeated and spread, without additional funding. he evaluation has been based on quantitative information from the EPA’s project database and interviews with representatives from 10 municipalities. The evaluation also includes the results of an in-depth study of four LIP projects in the pulp and paper industry. 

Place, publisher, year, edition, pages
Stockholm: Naturvårdsverket, 2005. , p. 78
Series
Rapport / Naturvårdsverket, ISSN 0282-7298 ; 5479
National Category
Environmental Sciences
Identifiers
URN: urn:nbn:se:naturvardsverket:diva-10070ISBN: 91-620-5479-1 (print)OAI: oai:DiVA.org:naturvardsverket-10070DiVA, id: diva2:1640167
Available from: 2022-02-23 Created: 2022-02-23 Last updated: 2022-02-23Bibliographically approved

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CiteExportLink to record
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