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The Effectiveness of Environmental Regulations: Design, Implementation and Institutional Context
Luleå University of Technology, Department of Social Sciences, Technology and Arts, Social Sciences.ORCID iD: 0000-0003-3179-634X
2025 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This doctoral thesis consists of an introductory preface and five independent papers, which all address the effectiveness of environmental regulations. The focus is on how regulatory design and implementation as well as institutional context could influence the outcomes of industrial pollution control. Paper I investigates the impact of performance standards on the Chemical Oxygen Demand (COD) discharges from Swedish pulp and paper mills over a four-decade long period. The analysis employs an instrumental variable estimation of the fixed effects panel data model and data for 22 individual mills. The results show that these COD standards have led to significant reductions in water pollution from the mills. However, the magnitudes of this effect differ across two regulatory regimes in Sweden, thus highlighting the role of the institutional context in which the regulations are embedded. Paper II focuses on how the use of compliance periods, i.e., granting industry extended deadlines to comply with new standards, has affected industrial pollution reductions. This regulatory tool is discussed conceptually, and the empirical analysis relies on an extended version of the above data set, and a Panel Vector Autoregressive model specification. The results illustrate that the combination of COD discharge standards and compliance periods has been effective in reducing water pollution. High regulatory capacity will improve the effectiveness of this type of regulation. Paper III investigates the factors that help explain the duration of environmental licensing processes. The paper devotes particular attention to incomplete license applications, and argues that theoretically, the industrial actors may have an incentive to submit environmental impact assessments (EIAs) that have a high risk of being deemed inadequate by the authorities. The analysis relies on an Accelerated Failure Time (AFT) model and data covering 1606 environmental licensing processes that reached a final decision during the time-period 2018-2022. The results confirm that the high prevalence of incomplete applications has been a significant driver of delays in Swedish environmental licensing processes. The purpose of Paper IV is to investigate how licensing procedures can be implemented, and the regulatory requirements designed, to control pollution without jeopardizing investments in novel zero-carbon or digital projects. This is achieved in the empirical context of two licensing processes: Northvolt’s battery factory in the city of Skellefteå and Facebook’s data center in Luleå. The empirical analysis builds on an analytical framework, which provides the conceptual anchor for 20 semi-structured interviews with key persons involved in these two processes. The findings are consistent with the notion that well-functioning licensing processes will be characterized by three general attributes: flexibility, predictability and knowledge. These can be attained within the realms of existing legislation, in turn suggesting that successful green and digital transitions are likely not dependent on more radical legal reforms. Finally, Paper V provides a brief conceptual discussion of the choice between economic instruments, e.g., taxes, and standards in environmental policy. This paper questions the claim that the former always represents a superior policy approach for mitigating pollution. Based on recent research, it is argued that the zero-carbon transition involves specific challenges that tend to strengthen the case for the use of standards. Moreover, standards-based regulations are not necessarily adopted as crudely as some economic models assume, and efforts could be undertaken to reduce compliance costs and incentivize technological change. All in all, the findings in this thesis are consistent with the notion that such efforts ought to acknowledge the entire set-up of the regulatory system, including knowledge generation and transfer as well as the nature of the relationship between regulators and industry.

Place, publisher, year, edition, pages
Luleå: Luleå University of Technology, 2025.
Series
Doctoral thesis / Luleå University of Technology 1 jan 1997 → …, ISSN 1402-1544
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:ltu:diva-115268ISBN: 978-91-8048-939-3 (print)ISBN: 978-91-8048-940-9 (electronic)OAI: oai:DiVA.org:ltu-115268DiVA, id: diva2:2009747
Public defence
2026-01-14, E632, Luleå University of Technology, Luleå, 10:00 (English)
Opponent
Supervisors
Funder
The Kamprad Family FoundationSwedish Energy Agency, 52479-1Available from: 2025-10-28 Created: 2025-10-28 Last updated: 2025-11-13Bibliographically approved
List of papers
1. Environmental Regulation and Institutional Change: Industry Responses over Four Decades and Two Regulatory Regimes
Open this publication in new window or tab >>Environmental Regulation and Institutional Change: Industry Responses over Four Decades and Two Regulatory Regimes
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-115260 (URN)
Funder
The Kamprad Family FoundationSwedish Energy Agency, 52479-1
Available from: 2025-10-28 Created: 2025-10-28 Last updated: 2025-10-29Bibliographically approved
2. Time Flexibility in Environmental Regulation: Discharge Limits and Compliance Periods in the Swedish Pulp and Paper Industry
Open this publication in new window or tab >>Time Flexibility in Environmental Regulation: Discharge Limits and Compliance Periods in the Swedish Pulp and Paper Industry
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-115259 (URN)
Funder
The Kamprad Family FoundationSwedish Energy Agency, 52479-1
Available from: 2025-10-28 Created: 2025-10-28 Last updated: 2025-10-29Bibliographically approved
3. Incomplete and Delayed: How Uncertainty Drives Prolonged Environmental Licensing Processes
Open this publication in new window or tab >>Incomplete and Delayed: How Uncertainty Drives Prolonged Environmental Licensing Processes
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-115258 (URN)
Funder
The Kamprad Family FoundationSwedish Energy Agency
Available from: 2025-10-28 Created: 2025-10-28 Last updated: 2025-10-29Bibliographically approved
4. Reforming Environmental Licensing in the Green and Digital Transitions: Case Study Insights from Sweden
Open this publication in new window or tab >>Reforming Environmental Licensing in the Green and Digital Transitions: Case Study Insights from Sweden
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-115261 (URN)
Funder
The Kamprad Family FoundationSwedish Energy Agency, 52479-1
Available from: 2025-10-28 Created: 2025-10-28 Last updated: 2025-10-29Bibliographically approved
5. The Institutional Blind-Spot in the Green Transition: Market Incentives versus Command-and-Control
Open this publication in new window or tab >>The Institutional Blind-Spot in the Green Transition: Market Incentives versus Command-and-Control
2025 (English)In: Journal of Economic Issues, ISSN 0021-3624, E-ISSN 1946-326X, Vol. 59, no 2, p. 438-444Article in journal (Refereed) Published
Abstract [en]

This article questions the neoclassical claim that compared to command-and-control instruments such as performance standards, economic policy instruments (e.g., taxes or emission allowance schemes) represent a superior policy approach to mitigate industrial pollution. Based on recent research, we argue that the ongoing transition towards zero-carbon production processes involves specific challenges, which tend to strengthen the case for using standards-based regulations, not least quantitative performance standards. Empirical research suggests that this regulatory approach is not necessarily adopted as crudely as some economic models (and textbooks) suggest. Efforts can be undertaken to reduce the cost of compliance and incentivize technological change. These, in turn, must address the entire set-up of the regulatory systems, including knowledge generation and transfer, social trust, and the forms of relationships between regulators and industry. All in all, it is essential to abstain from simplified normative arguments about instrument choices in environmental policy regardless of the institutional context.

Place, publisher, year, edition, pages
Taylor & Francis, 2025
Keywords
green transition, environmental regulation, institutional context, market-based instruments
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-112863 (URN)10.1080/00213624.2025.2493534 (DOI)001499360200030 ()2-s2.0-105006903872 (Scopus ID)
Note

Validerad;2025;Nivå 2;2025-06-02 (u2);

Full text: CC BY license;

Available from: 2025-06-01 Created: 2025-06-01 Last updated: 2025-10-28Bibliographically approved

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