THE COST OF EDIBLE FISH - EFFECTS ON THE SWEDISH AND FINNISH FOREST INDUSTRIES FROM THE IMPOSITION OF EFFLUENT CHARGES ON CHLORINE RESIDUALS IN SWEDEN

An urgent issue in environmental protection in Sweden and Finland is the reduction of discharges of organic chlorine compounds produced by bleached chemical pulp manufacturing into the Baltic Sea. To speed up the process, the Swedish Government is currently considering introduction of an effluent charge on chlorine residuals. This would raise the cost of chlorine-bleached pulp and paper products in Sweden and induce restructuring of the forest industries of both Sweden and Finland. These effects, and the total cost to Sweden, including the deadweight loss on the pulpwood market are analysed. A computable model for comparative static analysis on the long-term equilibrium on the Swedish and the Finnish pulpwood markets is developed. It is shown that, on one hand, the marginal cost of emission control through product substitution is less than the marginal cost of technical purification measures to reduce discharges per unit of output, but, on the other hand, the role played by product substitution induced by an effluent charge will be minor in comparison to the effects that can be attained by traditional regulation through emission standards. © 1991 Academic Press Limited.