The variability of environmental protection expenditures between sectors in Sweden.

The focus of this paper is on environmental protection investments for reducing emissions to air in the pulp and paper industry and in the energy and heating industry. We use data on environmental protection investments to assess the costs for environmental protection in order to characterize the potential differences between these two industries in their ability to adapt to national policymaking. We find that the energy and heating industry invests more than the pulp and paper industry in relation to their revenues. This pattern is also true if we look at the type of environmental protection investment (i.e. clean technology or end-of-pipe solutions). That the pulp and paper industry is less investment intensive with regards to environmental protection is in line with what can be expected, i.e. firms in a competitive market do not seem to have the same possibility of internalizing the external cost of production in response to ‘green’ consumer demand. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment. [ABSTRACT FROM AUTHOR]