Can integrated control strategies for multiple emissions enhance cost-efficiency in environmental policy?

The aim of this paper is to clarify the magnitude of the sub-optimization cost associated with separate control strategies for compliance with the Swedish environmental quality objectives. The marginal reduction costs are estimated using a separate and an integrated version of a deterministic linear programming model. To investigate whether the accuracy of the data is decisive for the result of this study, an extensive sensitivity analysis that deals with both the disparity in discount rates in data and the different types of measures, is carried out in four steps. It can be concluded that the results are robust for possible and probable faults in data. The main findings are that there are no substantial sub-optimization costs for separate control strategies for CO2, NOX and SO2, but an integrated action strategy could imply enhanced cost-efficiency in reductions of VOC and particles.