The paper provides an empirical assessment of the electricity efficiency improvement potential in the Swedish pulp and paper industry by employing data envelopment analysis (DEA) and mill-specific input and output data for the years 1995, 2000 and 2005. The empirical results are discussed in relation to the reported outcomes of the Swedish voluntary energy efficiency programme PFE. The estimated electricity efficiency gap is relatively stable over the time period; it equals roughly 1 TWh per year for the sample mills and this is three times higher than the corresponding self-reported electricity savings in PFE. This result is largely a reflection of the fact that in the pulp and paper industry electricity efficiency improvements are typically embodied in the diffusion of new capital equipment, and there is a risk that some of the reported measures in PFE simply constitute an inefficient speed-up of capital turnover. The above does not preclude, though, that many other measures in PFE may have addressed some relevant market failures and barriers in the energy efficiency market. Overall the analysis suggests that future energy efficiency programs could plausibly be better targeted at explicitly promoting technological progress as well as at addressing the most important information and behaviour-related failures.

The purpose of this paper is to evaluate the efficiency of the global primary aluminum industry. Efficiency is here taken to be evaluated relative to some benchmark, i.e., the smelter or smelters identified as the most efficient in the data set, thus forming the production frontier. The performance of individual smelters, specifically their technical, allocative, and scale efficiencies are calculated by the means of data envelopment analysis. A proprietary database containing data on inputs used, output, and cost of production for 151 primary aluminum smelters operational globally in 2003 were used in the efficiency estimations. In order to assess and contrast the performance of smelters at different locations, facing dissimilar policy and factor supply environments, smelters are grouped into geographical regions. Furthermore, the technology used will also be evaluated in terms of the above efficiency measures. For each region, measures of potential technical and cost-wise factor savings will be calculated in order to assess specifically in what way production factors improvements can be made and approximately how large these improvements are. The findings indicate that; (a) smelters are overall highly efficient given the scale of operation, (b) many smelters operate with increasing returns to scale and thus we find significant scale inefficiencies, (c) substantial allocative inefficiencies exist within the industry, and (d) there are significant variations in the level of efficiency across regions. The allocative efficiency is particularly low in regions such as China and the Commonwealth of Independent States (CIS) region. Finally, the greatest potential for factor reductions is in labor input in China, the CIS region and in Asia.

The purpose of the paper is to analyse and compare short-run factor demand responses to price changes in the primary aluminium industry in Western Europe and the Africa-Middle East (AME) region. We outline a Translog variable cost function model, which is estimated employing a panel data set at the individual smelter level over the time period 1990-2003. The empirical results show evidence of limited - but far from insignificant - price-induced factor demand responses in the short-run. Overall aluminium smelters in the AME-region show evidence of higher estimated short-run own- and cross-price elasticities than their competitors in Western Europe, at least when it comes to labour and electricity demand. One important reason for this result is the greater number of pot lines with slightly different technologies at each smelter as well as the more intense use of the Prebake technology in the AME-region making retrofits in existing plants less costly than in Western Europe. The results also suggest that in both regions the demand for electricity has over time become less sensitive to short-run price changes, while the labour and material demand responses to price changes have increased but only in the AME-region. The liberalisation of the Western European electricity markets in combination with the rigid labour markets in this part of the world suggest that the shift in production capacity from the western world to the AME-region as well as China may continue

The purpose of this paper is to analyze the economics of secondary aluminium supply in Western Europe. We derive a supply model of secondary aluminium recovery and recycling, which integrates microeconomic theory of production with a dynamic model of scrap generation and accumulation. The supply function contains the secondary output price, a vector of input prices, and a measure of the size of the stock of old aluminium scrap. The model is estimated using pooled cross-section and annual time-series data for four European countries, Germany, France, Italy and the United Kingdom, over the time period 1983-2000. The estimated own-price elasticity of secondary aluminium supply is low (0.21) as is the supply response to changes in the stock of old scrap. The empirical results are useful for analyzing market behavior and policy impacts in the secondary aluminium market. The low supply responses to changes in the output price can - in combination with the high-income elasticity of material demand - help explain the observed price volatility of secondary aluminium prices. They also suggest that price-based policies influencing the supply side of the market may only have limited impacts on aluminium recycling rates, and that national collection of aluminium scrap is likely to have small influences on secondary aluminium production internationally.

This thesis consists of an introduction and five self-contained papers all dealing with various aspects of the economics of aluminium markets and production. Paper I focuses on various efficiency issues within the global primary aluminium industry. Using Data Envelopment Analysis (DEA) and data for the year 2003, we find that in general primary aluminium smelters are efficient given the scale of operation. However, many smelters operate with increasing returns to scale. Thus, many smelters would lower their average costs if the scale of production was increased. Furthermore, there exist substantial allocative inefficiencies in the industry, i.e., smelters are inefficient in changing the factor set up according to market prices. Overall, there are significant variations in the level of efficiency across smelter locations. Finally, we estimate the potential for factor reductions across smelter technologies and locations. Paper II analyzes the development in total factor productivity (TFP) over the period 1993-2003 in the global primary aluminium industry using DEA. The Malmquist indices calculated show that with the exception of Western Europe, smelters in high cost regions have experienced rapid TFP-growth, mainly driven by technical progress and not (as a priori assumed) by efficiency improvements. In regions with rapid capacity build-up, TFP-change is found to be weaker but likewise driven mainly by technical change. Finally, we do not find support for the notion that the dispersion of different smelter technologies affects regional smelter performance. Using a Translog variable cost function model, Paper III examines the ex post factor substitution possibilities in the primary aluminium industry in Western Europe and the Africa-Middle East region (AME) for the period 1990-2003. The results indicate higher short-run own- and cross-price elasticities at smelters in the AME region than in Western Europe, at least when it comes to labour and electricity demand. The results also suggest that in both regions the demand for electricity has over time become less sensitive to short-run price changes, while the substitution possibilities between labour and material have increased but only in the AME-region. The liberalization of the Western European electricity markets in combination with the rigid labour markets in this part of the world suggest that the shift in production capacity from the western world to the AME-region as well as China may continue. Paper IV provides an econometric analysis of the determinants of short-run supply and demand in the Western European market for secondary aluminium for the period 1983-1997. The empirical results indicate both price inelastic demand and supply. Policies aimed at increasing aluminium recycling by manipulating price will thus be ineffective considering the low own-price elasticity of secondary supply. However, increased demand for better fuel efficiency and safety in cars might increase the demand for materials with a favourable strength to weight ratio, such as aluminium, thus potentially increasing the demand for secondary aluminium. Finally, Paper V extends the analyzes in Paper IV by; (a) explicitly modelling the interdependencies between the primary and the secondary aluminium markets; (b) estimating secondary aluminium supply in a Cobb-Douglas framework; and (c) modelling aluminium scrap generation. The econometric results indicate that the secondary industry acts like a price taker to the primary aluminium industry. Taking account of the dependencies between input and output prices in secondary aluminium production, we find inelastic supply responses, thus confirming the ineffectiveness of price-driven policies aimed at stimulating recycling. We further calculate a continuously growing stock of scrap. Increased availability of aluminium scrap raises the probability of secondary producers to find the wanted quality, thus lowering the cost of recycling. The impact on supply is however found to be small. Given that increased recycling probably must come from the stock, the low responsiveness of supply from increased scrap availability indicates that attempts to stimulate ‘mining' of the scrap stock may be costly.

As the principal user of old scrap, secondary Al smelters and refiners have traditionally played a key role in the recycling of Al, producing primarily cast material demanded primarily by the automobile industry. The purpose of the paper is to explore the supply-demand relationships in the market for secondary Al alloys. Based on a standard microeconomic model, where the determinants of supply and demand are identified, an econometric model, using data from Germany, France, Italy and the UK for the time period 1983-1997, is estimated. The model is used to assess the relative importance of the factors determining the supply and demand of the European secondary Al industry. The results show that both the supply and the derived demand for secondary Al is own-price inelastic, which is reasonable given the short-run framework. On the demand side, the level of auto production is found to have a substantial impact on the level of secondary Al alloy demand. It is concluded that the model describes the market reasonably well. The inelastic supply in combination with the sensitivity to changes in the level of auto production provides a tentative explanation of the observed volatility in secondary Al prices. Furthermore, the inelastic supply responses indicate that policies aimed at increasing recycling using price-based incentives will be inefficient.

This thesis consists of two self-contained papers on the West European market for aluminium metal made from scrap, so called secondary aluminium. The purpose of the first paper is to identify and estimate the relative importance of factors determining supply and demand of secondary aluminium casting alloys in the short-run. The analysis is carried out within a neo- classical market framework using pooled time series and cross section data for Germany, France, Italy and the UK over the time period 1983-97. The results show that both the supply and the derived demand for secondary aluminium is own-price inelastic, which is reasonable considering the short run framework. On the demand side, the level of auto production is found to have a substantial impact on the level of secondary aluminium alloy demanded. We conclude that the model seem to describe the market reasonably well. The inelastic supply in combination with the cyclical demand from auto manufacturers provides a tentative answer to the observed volatility in secondary aluminium prices. Further, the inelastic supply identified, indicates that policies aimed at increasing recycling by using price-based incentives will be relatively inefficient. The first purpose of the second paper is to examine pricing in the market for secondary aluminium, especially the interdependencies with the market for primary aluminium. We develop a simple model assuming that the price for secondary aluminium is determined by the price of primary aluminium and industrial activity. The entire secondary industry is thus viewed as a price taker. Using pooled time series and cross section data for Germany, France, Italy and the UK over the time period 1983-97, the OLS results show an inelastic, though still sizeable reaction of the secondary price to changes in primary price, leading us to conclude that the secondary aluminium industry as a whole indeed seem to be a price taker. The inelastic response also leads us to further conclude that the secondary industry cannot completely fill the slack caused by fluctuating primary prices. The cause of this is that substitution between secondary and primary only takes place in the market for castings. A second purpose is to refine the supply elasticity estimates from paper 1, and further to calculate and estimate the impact from the stock of aluminium scrap on the supply of secondary aluminium. To do that, a theoretical model of secondary aluminium supply is developed, that integrates microeconomic theories of production and cost with a simple model of scrap generation and accumulation. The parameters of the supply model are estimated in ‘two steps', using data for the same countries and time period as above. In the first step, we explicitly include input costs for scrap. The TSLS results show an inelastic, though still quite significant own-price response of secondary supply. However, we demonstrate that since the input price of scrap is not independent of the output price of secondary aluminum alloys, the resulting own price elasticity will be overestimated. Thus, in a second step, an alternative supply function accounting for this is estimated, where we assume that secondary and scrap prices have a fixed relationship to each other. The results of this exercise indicate, as expected, a significantly reduced own-price elasticity. A 1 percent increase in price leads to a fifth of a percent increase in secondary output, which is in accordance with previous research. We show that due to the inelasticity of supply, subsidies to secondary refiners equaling almost 20 percent price increase will increase the market share of recycled aluminium with only 1 percent. Thus, we confirm the result from the first paper that price driven policies will fail to achieve increased recycling. We further calculate a continuously growing stock of scrap during the period in question. The increased availability of aluminium scrap increases the probability of secondary producers to find the wanted quality, thus lowering the cost of recycling. The impact on supply is however found to be small, less than on tenth of a percent. Given that increased recycling probably must come from the stock, the low responsiveness of supply from increase scrap availability indicates that attempts to stimulate ‘mining' of the scrap stock will be costly.

As the principal user of old scrap, West European secondary aluminum smelters and refiners have traditionally played a key role in recycling of Al, producing for example cast material demanded primarily by the automobile industry. Over the last decade, the West European secondary smelter industry's position as the nucelus of the Al recycling industry has been challenged, due to changes in both the supply and demand sides of the secondary industry. On the supply side of example, there is now more competition for high-grade (new) scrap from wrought remelters and primary producers, with narrower margins for the refiners as a consequence. On the demand side, the secondary industry is still heavily dependent on the development in the auto industry. The purpose of this paper is to explore the supply-demand relationships in the market for secondary Al alloys. Based on a standard microeconomic model of price determination in the short run where the determinants of supply and demand are identified, a simple econometric model, using data for Germany, France, Italy and the UK for the period 1983-1997 will be developed. The model will be used to assess the relative importance of the factors determining the supply and demand of the European secondary Al industry

Examines the effect of property rights systems within common forests on output decisions in Sweden. History of common forests in Sweden; Structure and governance of Swedish common property forests; Behavioral assumption behind the actions of managers and co-owners of the common forests in Sweden.