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

Sweden's current climate policy affects domestic combustion of fossil fuels and, thus, produces synergies on the policies aiming at reducing NOx and SO2 emissions. A matter of climate policy recently discussed by the Swedish Government, however, is to adopt a carbon emissions target, which excludes traded CO2 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 SO2 and NOx emissions arising from the current climate policy. The findings, here, suggest that additional policy instruments would have to decrease the SO2/GDP and NOx/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.