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Browsing by study line "Ympäristö- ja luonnonvaraekonomia"

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  • Kaariaho, Tuomas (2023)
    Following the Fukushima Daiichi nuclear accident in 2011, Germany swiftly decommissioned eight of its seventeen nuclear reactors, ultimately committing to a complete nuclear phase-out. Consequently, a substantial portion of nuclear power production was replaced by fossil fuels. Given the established link between fossil fuel use in electricity generation and localized air pollution, this transition likely adversely affected local air quality and associated respiratory health effects. This thesis examines the unintended health consequences of Germany's nuclear phase-out, focusing on premature mortality from non-communicable respiratory diseases, quantified through Potential Years of Life Lost. This thesis uses the synthetic control method to investigate the health outcomes of nuclear phase-outs, adding to the limited existing literature in this domain. Employing synthetic control techniques and utilizing mortality data from the World Health Organization, I am able to construct a counterfactual scenario representing a Germany that did not phase out nuclear energy. This allows me to assess the trajectories of potential years of life lost due to non-communicable respiratory diseases following the nuclear plant closures. I find an annual increase of 14 potential years of life lost per 100,000 residents after these closures, predominantly affecting individuals aged 50 to 64. The resulting economic costs due to this increased mortality range between five billion to 19 billion euros, depending on the chosen value of life year. Considering the exceedingly low probability of Fukushima scale nuclear accident, these figures surpass the expected damages of a such accident. In sum, this thesis underscores the importance of considering potential unintended consequences of policy changes. The German nuclear phase-out led to amplified mortality and economic expenditures. Despite its substantial local impact, local air pollution remains less recognized than greenhouse gas emissions. Policymakers should extend their considerations in the energy sector to encompass local air pollution alongside greenhouse gas emissions.
  • Jaana, Haavisto (2023)
    Policy makers must make decisions regarding budget allocation between policies and research. Only actions improve the state of the system, but knowledge increases the probability of effective action. The outcome of environmental policies is usually uncertain, and the question remains: should we invest more in research or use resources for additional policies? Under uncertain decision making, it is clear, that doing and knowing go hand in hand. Still, there is a lack of scientific analyses about the relationship between these features. This paper analyses how uncertainty in policy implementation outcome (i.e., Value- of- control, VoC) effects the need for additional knowledge, which is measured using value- of- information (VoI) analysis. Additionally, the paper analyses how the obtained results can help in the allocation of resources between policy and research. To answer these questions, I use a published Bayesian decision model by Helle et al. (2015) as a source for further analysis. It is an influence diagram model, consisting of two decision variables, 40 random variables and 13 utility variables which are described in euros, allowing the monetary summarisation of utility. I introduce levels of implementation uncertainty to the other decision by placing an additional random variable to influence the successor variables of the decision. I define the levels of uncertainty using two co-variation methods, first one being the proportional co-variation method, and the second one the order- preserving uniform method. By this way, I analyse and compare the effect of distinct levels of decreased controllability (VoC) to VoI analysis results. These two methods describe two alternative ways of modelling the uncertainty in implementation, which is always uncertain when we consider future actions that have yet to been implemented. I conduct the analysis separately for both co-variation approaches, and 10 alternative levels of implementation uncertainty, to enable systematic comparability between the chosen methods, and to learn alternative ways to consider the relationship of controllability and knowledge. First, I preform the VoI analysis only for the policy that is subjected to implementation uncertainty. Secondly, the analysis is done for both decision variables and the Single Policy Updating (SPU) algorithm of Hugin software is used for detecting optimal policies for different implementation uncertainty levels. In other words, I show how the various levels of controllability of the system impact the needs to carry out research. I argue, that this is a fundamental question for many environmental policy questions, such as climate change, eutrophication, loss of biodiversity and in my example, risks of oil spills. The results show a consistent, but interesting effect of decreased controllability to the VoI analysis results. Increase in implementation uncertainty raises the overall VoI and increases the number of variables presented with VoI, i.e., once the estimated uncertainty of controllability increases, the chance to achieve desired results increases only by knowing more. When only one decision variable is included, VoI increases to the point of no control, indicating that VoI is zero when controllability of the system is zero, indicating that there is no point of carrying out research, if the knowledge cannot be used to improve the effects of actions. When both decision variables are included in this case, VoI increases to a certain point and decreases after that. This study highlights the need for such analyses in decision problems, where uncertainty in policy implementation is often overlooked. This is the case with most deterministic, point estimate models. I argue, that this type of analysis would lead to more effective solving of environmental problems.
  • Jenkins, Jamie (2020)
    The Arctic environment is unique and hosts many economic opportunities. The environment is fragile and is home to many different animals, plants and indigenous people. The area has undergone periods of remilitarisation since the end of the cold war, and this is impacting local communities economically, environmentally and their social development. This research has been undertaken to assess the impact that military activity is having on these local communities. A literature review was undertaken in 3 key areas: Arctic sustainability, military sustainability and Arctic militarisation to identify relevant indicators that impact sustainable development. Sustainable development was defined using the 3 pillars from the Brundtland report, as economic, environmental and social. These indicators were collated to create a conceptual framework that was used to analyse two case study cities in the Arctic. These two cities were Fairbanks, in Alaska, and Severomorsk in Russia. These were chosen as economically and socially, they are very different, but they share the main similarity of being militarised Arctic cities. This meant the framework was tested on two different cities and in two different environments to test the validity and usefulness. The two case studies were built from reports, census information, statistical information and government reports. Although quantification was outside the scope of this research, observations were found from the data. Economically, the impact is positive. Military activity generates jobs, growth, infrastructure and military spending. The environmental impact is clearly negative. Military activity contaminates groundwater, soil, water and the local environment. The social impact is more ambiguous. Military activity helps foster community development but can impact personnel health. A discussion was undertaken on the effectiveness of the framework and improvement areas. The framework provided a good overall picture of activity but could be improved in some areas. These areas include reducing subjectivity in the construction phase, improved environmental data and time series data. The research was limited by time constraints and data availability in some impact areas.
  • Tamminen, Tiina (2021)
    One-fifth of Finland’s total greenhouse gas emissions and two-fifths of the Effort Sharing sector’s emissions come from domestic transportation. Of the domestic transportation emissions, 94% comes from road traffic. The target for Finland is to reduce 39% of the greenhouse gas emissions from the Effort Sharing sector by 2030, and Finland is committed to halving its emissions from traffic by the year 2030 compared to the 2005 level. The electrification of the vehicle fleet is one of the instruments set to achieve the emission reduction targets of the transportation sector. An ambitious goal of 700 000 electric vehicles, of which a significant part is battery electric vehicles, is suggested for 2030. The study explores the most significant attributes and the factors that affect the likelihood of adopting electric vehicles in Finland. The choice experiment data was collected by a survey questionnaire. The data comprises 409 respondents and represents the Finnish driving license holders well regarding age, gender, and living county. The data was analysed with econometric models using Nlogit and SPSS software. The results show that the most important attributes in vehicle purchase choice are purchase price, driving range, and charging time. Driving costs and CO2 emissions from driving were not statistically significant in this study. Plug-in hybrids were chosen more frequently than battery electric vehicles. The study finds many socio-demographic characteristics, and vehicle and driving-related factors that affect vehicle purchase choice. These simultaneously statistically significant characteristics for the vehicle purchase choice for battery electric vehicle are living county Uusimaa, university degree, gender woman, age less than 50 years, and driving less than 50 km per day. The variables found to increase the probability to choose a plug-in hybrid vehicle are residence in Northern or Eastern Finland, university degree, gender woman, row or semi-detached house, and the possibility to charge an electric vehicle at home. The study identifies the respondents who never chose an electric vehicle in the choice tasks and reveals a wide set of attitudes towards electric vehicles. The study reveals respondents' overall lack of information on electric vehicle and traffic emissions, and instruments for emission reductions.
  • Raschen, Annika (2021)
    This thesis studies the economic benefits that the installation of nature-based solutions can have as a flood risk management tool. The effects of a changing climate often accumulate in urbanised areas and can translate into an increased likelihood and heightened damage potential of precipitation-induced flood events. One way to reduce the devastating flood impact is the use of nature-based solutions, which are management tools relying on natural processes and ecosystem services (EC, 2018). Green roofs are one example of nature-based solutions. To date, little research is available in the academic literature on the economic profitability and cost-efficiency of such alternative approaches (Palmer et al., 2015). The thesis aims to contribute to the scare literature on the topic by conducting a flood damage assessment for a case study site. It is devel-oped from a research contribution to the EU OPERANDUM project, which evaluates nature-based solutions as tool to alleviate hydro-meteorological risks as well as their cost-efficiency on a broader scale (OPERANDUM Project, 2018). The thesis conducts a flood dam-age assessment for green roofs hypothetically installed in Dublin, Ireland. It estimates the expected damage costs from flood scenarios with a recurrence period of 10, 100 and 1000 years. To this end it relies methodologically on a flood damage assessment, specifically the Joint Research Centre model developed by Huizinga, de Moel & Szewczyk (2017), as well as on value transfer. The assessment is re-stricted to the calculation of direct, tangible flood damages. To provide more robust results, the assessment also draws on the analytical insights from the cost-benefit analysis literature and incorporates aspects such as discounting and a partial sensitivity analysis. In terms of software, the majority of the research is carried out in QGIS and Excel. Comparing the flood impacts with and without the installation of nature-based solutions, it assesses the size of the avoided damage costs and finds a noticeable positive impact of green roofs. The green roofs cannot only reduce the size of the flooded areas by up to 19% as well as decrease the water depth in the still inundated parts, but also noteworthily curtails the height of the direct, tangible flood damage costs. The thesis cannot extract definite conclusions on the profitability of green roofs in the sense of providing a net present value, because it does not study costs nor other benefits of green roofs for reasons of scope. It does, however, show that the installation of green roofs can lower the flood damage costs in Dublin by up to 36%. As additional conclusion, this thesis calls for research into more nuanced flood damage assessment methods, since the selected model excluded many factors. A methodological refining could increase the precision of monetary damage estimates. Altogether, the thesis observes that green roofs can be a useful tool to reduce the devastating impact of urban floods. However, green roofs should be combined with other flood management tools, since they can be insufficient if applied on their own.
  • Matula, Alina (2023)
    Among financial institutions, there is a growing concern about risks in their portfolios related to biodiversity, and its closely related affiliate, climate change. Investors are demanding greater transparency and biodiversity management in order to make informed investment decisions in listed equity and to act as responsible shareholders. The aim of this thesis is to explore, from the Nordic pension investor point of view, how the risk related to biodiversity loss is assessed and managed in the financial markets. Following qualitative approach, primary data was collected with 14 semi-structured in-depth interviews of two target groups: pension investors in the Nordic countries and ESG specialists which refers to specialists in sustainable finance or biodiversity related sustainability fields. The results were analyzed using template analysis. The results show that taking biodiversity into consideration in investment processes is constantly evolving and Nordic pension investors are paying close attention to the topic. Among drivers to incorporate biodiversity into investment decision-making, risk management was the most important. ESG specialists' experience of institutional investors' means to influence biodiversity loss mitigation differed from pension investors' perspective. Nordic pension investors are not fully aware of the existing methods for analyzing the risks and impacts of biodiversity loss in their own investment portfolio. However, they are highly motivated to find reliable ways to manage portfolio risks. Integrating biodiversity risks and impacts into the investment process can be challenging due to a lack of investment tools and best practices. Investors are preparing for increasing statutory and voluntary regulation. Both ESG specialists and Nordic pension investors see that lack of comparable, transparent, reliable data is an essential barrier when it comes to listed-equity investments and biodiversity loss mitigation. The data available lacks financial materiality and the impacts of biodiversity loss on the real-world return expectations, and return-risk-profiles are unknown. To solve problems regarding the lack of data in general and especially transparent and comparable data, companies are expected to disclose material nature-related dependencies and impacts, and report associated metrics and targets.
  • Aarnio, Sebastian (2022)
    Since the term blue carbon was first coined in 2009, the interest in the carbon stocks and annual carbon sequestration of mangrove forests, salt marshes and seagrass meadows has increased noticeably. However, in the past couple of years, the carbon capabilities of kelp forests have also started to garner more attention, leading to multiple published studies arguing for their inclusion as a blue carbon ecosystem. However, so far, few studies have actually compared the amount of carbon stored and sequestered by kelp forests to the three traditional blue carbon ecosystems. Thus, the aim of this thesis was to estimate and compare the amount of carbon currently stored and annually sequestered by the different blue carbon ecosystems. Furthermore, the effects and costs of blue carbon ecosystem degradation were also estimated. Based on the results of a thorough literature review regarding the global distribution and degradation rates of the ecosystems as well as the amount of carbon sequestered and stored per unit area, the total amount of carbon stored in blue carbon ecosystems is estimated to be between 5 and 25 Pg, with mangrove forests storing roughly half of that. Yet, whilst kelp forests are estimated to have a far larger global distribution than all of the other blue carbon ecosystems combined, they only store around 0.1–1.4 Pg of carbon, since all of the carbon is stored in their biomass, unlike the other blue carbon ecosystems, in which the vast majority of carbon is located in the soils. However, the total amount of carbon sequestered annually by all blue carbon ecosystems is estimated to be between 40 and 331 Tg, out of which 8–231 Tg is sequestered by kelp forests. Yet, due to the degradation of the ecosystems during 2022, a combined 30–294 Tg of the previously stored carbon is estimated to be released into the atmosphere, whilst the amount sequestered during the year is reduced by roughly 0.4–6 Tg. Out of the carbon released, the majority is from the carbon stocks of seagrass meadows, whilst the carbon sequestration of kelp forests is reduced the most. The total combined cost of the degradation equals €9–174 billion, when the costs of the previously stored carbon released is combined with the NPV of the reduced carbon sequestration. Out of this, the total cost for kelp forests is estimated at €1–59 billion. However, whilst the number of studies published on blue carbon has increased, the data available regarding the ecosystems is still limited. As such, there are considerable uncertainties regarding the values presented and the results of the thesis should thus be considered rough estimates. That being said, the results still underline the importance of blue carbon ecosystems as carbon sinks as well as the considerable costs caused by environmental degradation. Furthermore, the thesis provides further support for the notion that kelp forests should indeed be considered a blue carbon ecosystem.
  • Husa, Miikka Helmer (2021)
    Climate change and the biodiversity loss have created a need to change forest management in commercial forests. Carbon sequestration, climate change adaptation, and biodiversity conservation can be promoted in commercial forests through various measures, and this thesis examines what factors affect non-industrial private forest (NIPF) owners’ willingness to adopt such forest management practices. Additionally, the aim was to examine whether these factors vary among different measures. A systematic literature review was conducted to summarize previous research on the subject and to serve as reference for an empirical analysis. In the empirical part of the study, survey data of 405 Finnish NIPF owners was utilized to establish binary logistic regression models for forest owners’ willingness to adopt 13 distinct forest management practices. In the empirical analysis statistically significant factors varied among assessed forest management practices, although some patterns were recognized. The most striking consistencies were found concerning older forest owners reluctance towards deadwood in general, and positive effect of environmental motivation in willingness to adopt variety of measures, as long as they do not conflict with biodiversity. Overall, the results imply that the diversity of NIPF owners concerns also their stances on various forest management practices, and they are not indifferent in terms of what forest management practices they are willing to adopt. Thus, when designing and implementing policies and advisory services aiming to promote carbon sequestration, climate change adaptation, or biodiversity protection in commercial forests, policy makers should take into account forest owners’ heterogenous preferences regarding different forest management practices.
  • Leinonen, Helmi (2023)
    Discussion around climate crisis and companies’ role in its mitigation has been accelerating especially in the past few years. Companies are in a crucial role if the targets set in the Paris Agreement are wished to be fulfilled. Companies have also noted the importance of the topic. Corporate environmental responsibility and sustainability themes have gotten a firm foothold in corporate world and companies can control them by utilizing different corporate governance mechanisms. This thesis aims to examine the importance of corporate governance and sustainability management in companies. Purpose is to study whether there is a link between the level of companies’ climate maturity and different corporate governance mechanisms that are used to manage companies’ sustainability. In addition, this thesis examines if there are differences in the results depending on size, industry, or country where companies are headquartered. Scope of this thesis is corporate environmental responsibility and climate sustainability in the context of greenhouse gas emissions. Companies are divided into two groups based on their climate maturity which is determined by whether they have set science-based emission reduction targets validated by the Science Based Targets initiative. Analysis is conducted with statistical analysis, logistic regression and is carried out with Stata. Data is originally from a corporate study and consists of 46 medium and large-sized Nordic companies from various industries. Sustainability criteria in management’s incentive plans and in companies’ investment decisions had a positive and significant link to companies’ climate maturity. Chief Sustainability Officer and board-level sustainability committee were insignificant in the model. Larger companies were more connected to climate maturity most likely because they have more resources to develop their sustainability and corporate environmental responsibility. In addition, larger companies are often obligated to disclose their sustainability performance and face pressure from the public to decrease their negative effects which can encourage them to set more advanced targets. It seems that the most effective measures are mechanisms with concrete criteria, compared to the more symbolic measures with no direct effect. Companies should focus on creating actions with impactful measures that create change in their organizations whereas policy makers should aim to create regulation directing companies towards these measures. Scientific research can help by providing knowledge of the most impactful corporate governance mechanisms. Sample size was relatively small, which prevents from making highly generalized conclusions. With a larger dataset, companies’ maturity could have been determined on a wider scale, different analysis methods could have been used and sustainability could have been considered in a more comprehensive perspective.
  • Österberg, Nico (2020)
    We study the compensation required to increase carbon sequestration in privately owned forests as a part of effective climate policy. We develop a theoretically correct understanding of compensating additional carbon sequestration in a voluntary stand-level carbon offset scheme by creating incentives for extending the rotation from the privately optimal length. We examine the cost of extending the length of the rotation to a socially desired level. The resulting costs and the increase in carbon sequestration determine the level of compensation required to make the private forest owner indifferent between joining the compensation scheme and resuming privately optimal forest management. A correctly defined subsidy scheme is required as forests are expected to play a major role in meeting national climate change mitigation targets, and so far, the existing schemes have failed to attract voluntary participants. The well-established univariate optimal rotation model (Faustmann 1894, Samuelson 1976) with a net carbon subsidy (van Kooten et al. 1995) is used to evaluate the compensation structure in the California Forest Offset Protocol and the New Zealand Emissions Trading Scheme, and to present a theoretically sound framework for subsidizing additional carbon sequestration in forests. An empirically more realistic size-structured forestry model with carbon storage (Assmuth et al. 2018) is used to verify the understanding of a correctly defined subsidy scheme when thinnings and multiple carbon pools are included. The results of the theoretical modelling are compared to practical applications in California Cap-and-Trade and the New Zealand Emissions Trading Scheme. These practical applications have faced various problems and have been subject to numerous revisions, due to issues with baseline establishment, over-crediting, questionable additionality, and leakage. We show that if the compensation scheme follows the Californian structure, a significantly high compensation is required to create sufficient incentives for private forest owners to participate in the sequestration program. The exclusion of carbon stored in harvested wood products may have decreased voluntary participation of post-1989 forests in the New Zealand Emissions Trading Scheme. These schemes serve as an example for the rest of the world of constructing a carbon sequestration compensation scheme. Thus, it is paramount to evaluate the choices in policy design, by comparing the compensation structure to a theoretically sound way of incentivizing additional carbon sequestration.
  • Juvonen, Jaakko (2020)
    Ilmastonmuutoksen aiheuttamien riskien hallinta on nyt ja tulevaisuudessa tärkeää. Tämä tutkielma keskittyy antamaan tietoa päätöksenteon tueksi ilmastonmuutoksen aiheuttamien hydrometeorologisten riskien hallintaan, joita ilmastonmuutos aiheuttaa vedenlaadussa Puruvedellä. Tutkimuksen tarkoituksena on arvioida jatkuvapeitteisen metsän kasvatuksen (CCF) ja suojavyöhykkeiden soveltuvuutta luontopohjaisiksi ratkaisuiksi (NBS), joilla saadaan pidettyä järven vedenlaatu nykyisellään tai parantamaan sitä. Tutkimuskysymys on: ”Onko taloudellisesti järkevää käyttää jatkuvapeitteistä metsän kasvatusta ja suojavyöhykkeitä ravinnekuormituksen vähentämiseen tutkimusalueella, jotta vedenlaatu alueella säilyy vähintään nykyisellä tasolla” Aiempi tutkimus on osoittanut jatkuvapeitteisen metsänkasvatuksen olevan taloudellisesti varteenotettava vaihtoehto kasvattaa metsää. Lisäksi tutkimus on osoittanut, että CCF ja suojavyöhykkeillä voidaan vähentää vesistöihin kohdistuvaa ravinnekuormitusta metsämailta. Näistä NBS:istä aiheutuvia kustannuksia ja hyötyjä arvioidaan tutkielmassa kustannus-hyötyanalyysin keinoin, jossa tarkoituksena on laskea projektista johtuvat hyödyt ja kustannukset ja verrata näiden nettonykyarvoa. Mikäli projektista seuraava yhteiskunnan nettohyöty on positiivinen, tulisi projektia suositella. Tutkimusalueen virkistysarvo arvioitiin käyttämällä hyödyksi Luonnonvarakeskuksen aiempia arvottamistutkimuksia. Virkistysarvoja verrattiin NBS:stä aiheutuviin taloudellisiin menetyksiin metsänomistajille. Kustannukset saatiin hyödyntämällä kokoluokka-rakenteista metsän optimointimallia. Tavoitteena oli selvittää, mikä on metsästä saatava maksimoitu tuotto metsänomistajille ja verrata sitä optimointitulokseen, jossa päätehakkuu on rajoitettu. Tämän lisäksi suojavyöhykkeillä olevan metsän maksimoitu arvo laskettiin, josta saadaan suoraan metsänomistajille aiheutuva menetys, koska alueet poistuvat kokonaan metsätalouden piiristä. Jatkuvapeitteinen metsänkasvatus oli kummassakin tapauksessa taloudellisesti optimaalinen tapa kasvattaa metsää. Tämän lisäksi arvioitu yhteiskunnan nettohyöty projektista on positiivinen, joten NBS:iä voidaan tältä perusteelta suositella keinoiksi vedenlaadun säilyttämiseksi tutkimusalueella. Tutkimuksen tuloksiin on kuitenkin suhtauduttava varauksella, koska analyysiä tehtäessä tutkimusalueen ravinteiden huuhtoutumismallit ovat vielä tekeillä, joiden valmistuttua tarkempi tieto NBS:ien vaikutuksista on saatavilla.
  • Tanhuanpää, Taru (2023)
    The accumulation of biological material, i.e., biofouling, on ship`s hulls is a significant issue both for the shipping companies and the environment. Biofouling on a ship`s hull increases friction, leading to increased fuel consumption and hence, an increase in the fuel costs and emissions from shipping. Furthermore, the EU maritime traffic will be included in the EU Emissions Trading System in 2024, meaning that shipping companies must pay for their carbon dioxide emissions. This creates an additional economic incentive for the companies to prevent biofouling. The main methods for preventing biofouling on a ship`s hull are different coatings and possible in-water cleaning of the coated surfaces. The coating types include biocidal coatings, fouling release coatings, and hard coatings. Despite the notable problems from biofouling, there is currently no international regulation concerning biofouling management of shipping companies. A holistic understanding of this complex issue is needed to develop more sustainable shipping in the future. In this thesis, I analyze this topic by further developing an existing Bayesian network model, which is a decision tool for examining the outcomes from different biofouling management strategies. My focus on the topic is the costs of shipping companies from biofouling and its management. The existing model concerns the costs of coating, in-water cleaning, and fuel consumption. In this thesis, I add emission allowance costs and uncertainty to the fuel prices in the model to study whether these additions would change the profitability of different biofouling management strategies. My hypothesis is that to minimize the costs of biofouling and its management, shipping companies should increase the in-water cleaning times when the emission allowance costs are included in the model. The study revealed that the most cost-effective coating type, for a general cargo ship and a tanker, is a fouling release coating. For a passenger ship, the cost-effectiveness depends on the age of the coating, but a biocidal coating is the most cost-effective option when the age of the coatings is two years. My additions to the existing model did not change the result concerning the cost-effectiveness of the coating types. The results also revealed that the future inclusion of maritime transport to the EU Emissions Trading System will increase the costs of shipping companies from biofouling. Despite this, my hypothesis got rejected since the inclusion of the emission allowance costs did not lead to increased in-water cleaning times. My changes in the fuel prices led to a decrease in the in-water cleaning times, for some ship types, compared to the original model. This is not due to the uncertainty itself but because the fuel price distributions, which I used, led to lower expected fuel costs than in the original model. The study highlights that fuel costs might be one of the most important factors in determining whether enhanced biofouling management will be profitable for shipping companies in the future.
  • Huisman-Dellago, David (2020)
    Dairy farms account for a large portion of the greenhouse gas emissions in the planet. Since cow manure provides a good medium for anaerobic digestion, this study analyzes the economic feasibility of installing a biogas plant adjacent to a 200-cow farm in Finland. The farms in this study produce only cow manure and grass silage to feed the digester. This paper focuses in comparing different scenarios such as electricity production for farm needs and the production of biofuels such as compressed biomethane as an additional business activity. After designing the farm economic model and the biogas installation, we provide an economic analysis of each scenario. The first one shows that it is not feasible to run the biogas business model based only on electricity savings for the farm. The second one proves that additional revenue streams such as biofuel production can revitalize and strengthen the financial model of the plant. Then, the sensitivity and reliability of the model is discussed by providing reasons (i.e. Finnish electricity tariff system) for the outcome of the results. The model reinforces the idea that farms must base their biogas business model on alternative side-streams and do not rely on energy production only. For further research, it is recommended that real life farm business models are incorporated as input data and a proven plant and CHP engine energy balance is secured.
  • Seppänen, Anni (2023)
    Finland has set ambitious goals to reduce road transport emissions. One of these goals includes halving emissions from transport by 2030 compared to the 2005 levels. Another goal is the carbon-neutrality target of 2035, in which the transport sector plays an important role as well. Achieving these targets requires efficient instruments. A possible instrument which can be used to reduce transport emissions sufficiently is emission trading. The possibility of creating a national emission trading system for the transport sector to reach Finland’s targets regarding emissions is the focus of this thesis. Establishing an emission trading system would likely have effects on the fuel price. I present the theoretical background before modelling these effects. Understanding how the fuel market works and how emission trading would affect it is crucial before analysing the impacts by modelling. The role of the price elasticity of demand in determining the change in the fuel price is highlighted. The existing literature has studied the topic of emission trading for transport extensively and points out three important design elements: the inclusion of the transport sector, the allocation of permits, and the point of regulation. These elements are discussed using previous studies on the topic. Furthermore, many studies highlight the possible distributional effects an emission trading system could cause. Exploring the currently operational emission trading systems around the world gives real-life examples of the different design elements and how distributional effects could be corrected in practice. When modelling the effects of emission trading on the fuel price, the value for the price elasticity of demand can be estimated using meta-analysis. For the meta-analysis, I selected 28 previous studies. The weighted average for the short-term elasticity is found to be -0.1607. For the long-term elasticity, the value is found to be -0.448. Using Monte Carlo simulations and the values obtained from the meta-analysis, it is possible to calculate the average changes in the fuel price and in the emission permit price, and also illustrate the uncertainty arising from the fact that the actual price elasticity of demand is not known. For emission reductions of 0.6 megatonne, the total change in the fuel price by 2030 is calculated to be 0.34 euros per litre. This means that the emission permit price would be approximately 204 euros per tonne of CO2 in 2030. In addition, other possible instruments as well as other emission reduction target values are modelled in the analysis. Finally, I discuss the design elements in more detail. An upstream system with auctioning would be an efficient option for the design of an emission trading system. In addition, I discuss the interaction of emission trading with other instruments and the possible EU ETS for transport. Last, I present limitations and some topics for future research.
  • Leppälä, Antti (2023)
    Tieliikennesektorilla sekä rakennusten erillislämmityksellä on merkittävä rooli EU-alueen kasvihuonekaasupäästöistä. Edellä mainitut sektorit eivät ole yhdessä onnistuneet saavuttamaan EU:n laskevaa kokonaispäästö. Tämän vuoksi tieliikenteen polttoaineille sekä rakennusten erillislämmityksissä käytettäville polttoaineille järjestetään erillinen EU:n laajuinen päästöoikeuskauppajärjestelmä. Tutkielmassa tarkastellaan päästökauppajärjestelmän vaikutuksia talouden pitäjiin tutkimalla vaikutuksia polttoaineiden hintoihin. Myös järjestelmän yksityiskohtaisia asetuksien tarkoituksenmukaisuutta tarkastellaan lähemmin vertailemalla tutkimuksen analyysin tuloksia ja määrättyjä päästöoikeuden hinnoilla laskettuja vaikutuksia. Vaikutuksia tutkitaan useiden eri tavoin muodostettujen kysynnän hintajoustoskenaarioiden kautta. Analyysi ei ota huomioon rakennusten erillislämmitykseen käytettävien polttoaineiden sektoria huomioon, vaan sen odotetaan reagoivan päästökauppajärjestelmän toimeenpanemiseen yhtäläisesti tieliikennesektorin kanssa. Analyysin mukaan päästöoikeuskaupan implementointi tulee kasvattamaan polttoaineen hintaa keskimäärin 0,12 €/l. Olennaisimpana tekijänä lopputuloksessa on järjestelmään lisätty konfiguraatio, joka käytännössä rajoittaa päästöoikeuden hinnan 45 euroon. Tarkoituksenmukaisuus on kyseenalainen vertailtaessa lopputulosta skenaarioihin sekä 180 euron päästöoikeuden hintaan, sillä 45 euron dynaaminen hintakatto tekee vähennystavoitteen saavuttamisesta mahdollisesti haasteellista. Tutkimuksen analyysi tarjoaa selkeän estimaatin päästökauppajärjestelmän täytäntöönpanon vaikutuksista polttoaineen hintaan. Analyysi mahdollisesta päästöjen jakautumista päästökauppajärjestelmän sisällä tuottaisi oletettavasti täsmällisempiä estimaatteja polttoaineen hinnan vaikutuksiin. Lisäksi sähköautojen yleistyessä kuluttajamarkkinoilla polttoaineen kysynnän hintajouston yksityiskohtaisempi tarkastelu saattaisi olla olennaista.
  • Zaman, Sara (2020)
    Despite much scholarly attention given to values and preferences toward the environment, comparatively few studies have examined the spatial relationships between relational values and more established concepts including instrumental and intrinsic values, self-reported knowledge of natural resource management issues, and perceived landscape threats. This study examines these context-based relationships using public participation geographic information systems (PPGIS) survey techniques. An online PPGIS survey was administered during the summer of 2019 to 1,200 residents in Mjölby kommun in Sweden, a community heavily reliant upon silvo-pastoral landscape use. A total of 301 responses were obtained, resulting in a 25.1% response rate. Spatial association and statistical analyses tests were conducted to examine the relationships between different categories of values, self-reported knowledge of natural resource management issues, and values and preferences for landscape threat management. Results indicate that socio-demographics alone have little to no significant impact on how many value points of any category are associated with the environment; however, significant differences in the spatial distribution of values were found by gender and self-reported knowledge of forestry, agriculture, and native biodiversity. Male respondents tended to assign instrumental values in more diverse areas across the landscape. Respondents who rated themselves as knowledgeable about biodiversity tended to assign relational values inside Natura 2000 sites, while those who rated themselves as knowledgeable about forestry avoided placing instrumental values in Natura 2000 sites. Contrary to expectations, instrumental values were the most evenly dispersed across the landscape, while intrinsic values were more concentrated in specific areas, and relational values were the most concentrated around the towns of Mjölby, Skänninge, and Mantorp. High degrees of spatial overlap were found between intrinsic and relational values, implying these value types may be conceptually similar for residents. Future PPGIS research could focus on smaller regions such as those at the municipal or regional level to more precisely identify the context-specific relationships between instrumental, relational and intrinsic values and natural resource management preferences in the local landscape.
  • Vehola, Anni (2021)
    Forests play a key role in climate change mitigation. There are different ways in which forests can contribute to both increasing carbon sequestration and reducing emissions. In Finland, forests are largely owned by private forest owners and thus the actions of these forest owners have a great impact on the climate change mitigation potential of forests. Thereby, this study examined the perceptions of Finnish forest owners on the following climate change mitigation strategies in the forest sector: Forest management, More harvest, Less harvest, Wood products, Conservation, Adaptation, and Land use change. Especially, the study focused on “Less intervention” (a combination of three individual strategies), and “Forest management” as strategies and tested how the following hypothesized aspects are associated with the support for these strategies: the prioritized values affecting the choice between climate change mitigation strategies in the forest sector, risk perception of climate change, political orientation, education level, and the size of forest land. The tested hypotheses were derived from the existing literature on theories and empirical findings on the perceptions of citizens and forest owners. The effect of the independent variables on the chosen climate change mitigation strategies was studied through linear regression analysis based on a quantitative survey with 892 responses. Regression models were established separately for both chosen strategies. On average, forest owners supported all climate change mitigation strategies in the forest sector, except Less harvest. Further the results of the linear regression analysis supported all hypotheses to some degree. Perceived risk of climate change emerged as an important measure affecting the support for climate change mitigation strategies in general. Left-right political orientation was found important, where individuals positioned more on the right side of the political spectrum generally supported strategies that have more human intervention in forests. Forest owners’ prioritized values were discovered to significantly affect the support for climate change mitigation strategies in the forest sector, and forest owners who valued biodiversity gave more support towards Less intervention and less support towards Forest management. Forest owners with a smaller property tended to be slightly more supportive towards Less intervention, but in the Forest management model, the effect was not significant. Similarly, the simultaneous effect of education and political orientation was significant in the Less intervention model, indicating that forest owners with a university degree and right-winged political orientation tended to be more supportive towards strategies with more human intervention in forests, compared to forest owners with a university degree and left-winged political orientation. Apart from hypothesized variables, gender was found a significant predictor of support towards strategies, where, on average, women were more likely to support Less intervention, and similarly be more opposing towards Forest management, compared to men. In light of the results, Finnish forest owners tend to be rather conscious about climate change and support on average different climate change mitigation strategies in the forest sector. Nevertheless, private forest owners are a heterogeneous group of people whose preferences vary greatly, and thus policies need to be implemented accordingly.
  • Korhonen, Samuli Joonatan (2020)
    We analyse the forest reference level (FRL) projection in Finland. FRLs are included in the European Unions’ new land use, land-use change and forestry (LULUCF) regulation (EU 2018/841) that is part of the actions towards the Paris Agreement’s climate mitigation targets. The regulation defines the accounting rules for carbon dioxide (CO2) emissions within the sector. We build on the LULUCF regulation, the provided guidance documents on the FRL projection, national forestry accounting plans and the existing studies concerning the FRL projections. Business-as-usual reference levels were used for the Kyoto Protocol’s second commitment period. The parties of the Kyoto Protocol had an incentive to report high harvest levels (Frieden et al. 2012). Thus, the reference levels overestimated the harvests by including in assumptions about future policies. Some of the assumptions did not materialize and this led to windfall carbon credits (Grassi et al. 2018, Krug 2018). Such overestimation has happened, for example, in Finland. In this thesis we analyse, whether the new forest reference levels are able to avoid problems that occurred during the Kyoto Protocol. The LULUCF regulation is set for the compliance period (CP) of 2021-2030. The forest reference level is a baseline projection for the forest carbon sink, defined by the historical forest management practices of the reference period (2000-2009). Age-related dynamics of the forest can be taken into account but any anticipated policy changes need to be excluded from the projection. The FRL indirectly defines the level of harvests that are not considered as emissions. The excess carbon sink can be traded to other Member States or be used to compensate the effort sharing sector’s emissions. One of the suggested principles to project historical forest management is to utilize the intensity of management (Grassi and Pilli 2017, Grassi et al. 2018), which is calculated by dividing the reference period’s harvest by the amount of biomass that was available for the wood supply during the same period. The future harvest level is computed by keeping the intensity of management constant. This principle is used in Finland and in several other EU member states. To analyse the suggested principle, we utilize a partial equilibrium model for forestry and agriculture (Mitra and Wan 1985, 1986, Salo and Tahvonen 2004). Using this model, we are able to compute a FRL in a case where policy shock has increased harvest levels after the reference period. This resembles the situation in Finland. Our numerical results show that the choices on the biomass available for wood supply, interest rate and the starting year of the projection can have significant impacts on the FRL computation. By these choices, a member state is able to overestimate the harvest possibilities. Thus, the EU fails to set a regulation that fully excludes national incentives in specifying the FRL. The setting of the Finnish FRL includes a tendency of minimizing the restrictions on the future harvest levels. This outcome follows by choosing high interest rate, early starting year for the projection and a loose definition for the biomass available for wood supply.
  • Arto, Tiina (2021)
    To combat climate change, emission reduction measures are needed in all sectors of the economy. Finland's effort sharing sector has a binding 39 percent emission reduction obligation for 2030. Achieving the obligation requires actions in every field of activity in the effort sharing sector. Emissions from decentralised heating systems in buildings are included in the effort sharing sector. In Finland these emissions originate mainly from oil heated buildings. Currently there are still around 130 000 oil heated detached houses in Finland whose carbon dioxide emissions could be reduced by utilising renewable energy. In this study oil heating is completely replaced with a ground source heat pump, a pellet heating system or an air-to-water heat pump. Partial replacement of oil heating was also studied, whereby an air-to-water heat pump is installed alongside the old oil heating or part of a fossil light fuel oil is replaced by bio-based fuel oil with the distribution obligation. The study was conducted from the perspective of environmental economics and the main purpose was to examine the cost-effectiveness of these emission reduction measures and the policy measures directed to the oil heated detached houses. The method used was a cost-effectiveness analysis based on a 15-year calculation period. Based on the results, the social costs of emission reduction measures varied from 35 EUR/tCO2 to 114 EUR/tCO2. From the societal point of view, the most cost-effective emission reduction measure proved to be an air-to-water heat pump alongside an existing oil heating system. Based on the results, the most expensive emission reduction measure for the society is the distribution obligation of bio-based fuel oil, which is why emissions from oil heating in detached houses should be reduced primarily by other measures. The tax and support levels used in the calculation were based on the 2020 levels. Based on the results, private emission reduction costs varied from -50 EUR/tCO2 to 169 EUR/tCO2, depending on the policy option and the discount rate. Based on the results, the tax level used in the calculations is insufficient for making the measures profitable for households which apply a higher discount rates than the society. The aid policy is therefore justified in order to promote the measures.
  • Kokkonen, Aino (2022)
    Yhteiskunta asettaa yhä enenevissä määrin paineita yrityksille, organisaatioille ja kuluttajille vähentää hiilidioksidipäästöjä ilman pakkokeinoja. Hiilidioksidipäästöjen vähentäminen nollaan ei ole kuitenkaan aina mahdollista ja kustannukset jo pienistäkin vähennyksistä saattavat olla huomattavat. Vaihtoehtona hiilidioksidipäästöjen vähentämiselle on hiilidioksidipäästöjen kompensoiminen. Päästökompensaation myötä yritykset, organisaatiot ja kuluttajat voivat ostaa kompensaatioyksikköjä, mikä tarkoittaa käytännössä sitä, että päästöjään kompensoiva taho maksaa päästöjen vähentämisestä jossain muualla, missä vähentäminen on edullisempaa ja helpompaa. Tämä pro gradu -tutkielma on toteutettu yhteistyössä Nokian Panimon kanssa. Tutkimuksessa lasketaan Nokian Panimon Be sharp -energiajuoman tuotannon hiilidioksidipäästöt, ja tarkoituksena on selvittää kyseisten hiilidioksidipäästöjen kompensaation hinta CO2eston päästöleikkurin avulla sekä tutkia kompensaatiota myös vaihtoehtoisten palveluntarjoajien kautta. Tavoitteena on löytää luotettavuuden ja tehokkuuden kannalta optimaalisin kompensaatiokeino. Tutkimus koostuu kahdesta osasta, kirjallisuuskatsauksesta ja case-tutkimuksesta. Kirjallisuuskatsauksessa keskitytään vapaaehtoisen päästökompensaation teoriaan, sen eri menetelmiin sekä niiden ominaisuuksiin. Osiossa käsitellään erityisesti päästökompensaatiomenetelmien luotettavuutta erilaisin mittarein. Tutkimusosiossa puolestaan käydään läpi Be sharp -energiajuoman hiilijalanjälkilaskennan lähtökohdat, laskenta ja tulokset. Lisäksi paneudutaan itse päästöjen kompensointiin ja siitä koituviin kustannuksiin. Tutkimuksen tuloksissa vastataan kysymyksiin mitkä ovat kompensoivan yrityksen kustannukset vapaaehtoisesta päästökompensaatiosta, mitä kompensaatio kustantaisi muiden palveluntarjoajien kautta ja millä perustein vapaaehtoista päästökompensaatiota tarjoava yritys kannattaisi valita. Tutkimuksen mukaan Be sharp -energiajuoman hiilidioksidipäästöjen kustannukset Euroopan päästöoikeuskaupan päästöoikeuden hinnasta riippuen, vuonna 2021 ovat 25,4–46,2 €/ 1000 l. Kustannukset eivät ole siis kovin merkittävät suhteessa tuotteen vähittäismyyntihintaan noin 3600 €/ 1000 l. Kompensaation kustannukset vaihtoehtoisten palveluntarjoajien kautta vaihtelevat välillä 4.7 €-35,7 €/ 1000 Hintaerot voivat olla merkittäviäkin, ja osassa kompensaatiokeinoista hinnan määritys on epäselvä. Tutkimuksessa todetaan, että hinnan sijaan tärkeämpää kompensaatioita tarjoavan yrityksen valinnassa ovat kriteerit, joita kompensaatiomarkkinalla pidetään yleisesti luotettavina mittareina. Tärkeimmät kriteerit ovat päästövähennysten lisäisyys, kaksoislaskennan välttäminen, mitattavuus, pysyvyys, ajoitus, hiilivuodon välttäminen, dokumentaatio ja valvonta. Näiden kriteerien avulla päästöjään kompensoiva taho voi löytää parhaan mahdollisen kompensaatiokeinon markkinoilta. Tämä vaatii kuitenkin pitkällistä perehtymistä aiheeseen, ja palvelujen luotettavuus saattaa silti jäädä epäselväksi. Markkinaa tulisikin selkeyttää ja mahdollisesti jopa rajoittaa väärinkäsitysten ja disinformaation välttämiseksi.