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Time Flexibility in Environmental Regulation: Discharge Limits and Compliance Periods in the Swedish Pulp and Paper Industry
Luleå University of Technology, Department of Social Sciences, Technology and Arts, Social Sciences.ORCID iD: 0000-0003-3179-634X
Luleå University of Technology, Department of Social Sciences, Technology and Arts, Social Sciences.ORCID iD: 0000-0003-2264-7043
(English)Manuscript (preprint) (Other academic)
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:ltu:diva-115259OAI: oai:DiVA.org:ltu-115259DiVA, id: diva2:2009715
Funder
The Kamprad Family FoundationSwedish Energy Agency, 52479-1Available from: 2025-10-28 Created: 2025-10-28 Last updated: 2025-10-29Bibliographically approved
In thesis
1. The Effectiveness of Environmental Regulations: Design, Implementation and Institutional Context
Open this publication in new window or tab >>The Effectiveness of Environmental Regulations: Design, Implementation and Institutional Context
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 environmental regulations have been embedded. Paper II focuses on how the adoption of compliance periods, i.e., granting industry extended deadlines to comply with new standards, has affected 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. 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 and devotes particular attention to the role of incomplete license applications. Theoretically, the industrial actors might 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 in Sweden, and that reached a final decision during the time-period 2018-2022. The results confirm that the high prevalence of incomplete applications has been strongly correlated with prolonged environmental licensing processes. The purpose of Paper IV is to investigate how environmental licensing procedures can be implemented, and the regulatory requirements designed, to regulate pollution without jeopardizing investments in novel zero-carbon or digital projects. This is achieved in the 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 contingent on comprehensive legal reforms. Finally, Paper V provides a brief and conceptual discussion of the choice between economic instruments, e.g., taxes, and performance standards in environmental policy. This paper questions the claim that the former unequivocally 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 implemented as crudely as some economic models assume, and efforts could be undertaken to reduce compliance costs and encourage green technological change. Overall, 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 information-sharing 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, ISSN 1402-1544
Keywords
environmental regulation, environmental licensing processes, regulatory design, institutional context, Sweden
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-115268 (URN)978-91-8048-939-3 (ISBN)978-91-8048-940-9 (ISBN)
Public defence
2026-01-14, E632, Luleå University of Technology, Luleå, 10:00 (English)
Opponent
Supervisors
Funder
The Kamprad Family FoundationSwedish Energy Agency, 52479-1
Available from: 2025-10-28 Created: 2025-10-28 Last updated: 2025-12-03Bibliographically approved

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Sundström, KristofferSöderholm, Patrik

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