Browsing by study line "Ympäristö- ja luonnonvaraekonomia"
Now showing items 1-20 of 60
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(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.
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(2024)Air pollution has many negative effects, for example on human health. It is important to reduce these effects with different policy measures. However, reduction measures can affect which groups of people suffer from pollution. Market-based methods, such as emission trading, are often cost-effective but raise concerns about environmental justice. When air pollutants are reduced from the cheapest places, there is a risk that pollutants will be unevenly distributed among socioeconomic groups. It is important to study whether such environmental injustice exists in Finland. Finland is an interesting research subject because it differs from other countries where similar studies have been conducted, for example, due to population density and relatively small income differences. In this thesis, it is analysed how air pollutants are distributed in Finland based on socioeconomic factors and whether the levels of air pollutants have developed evenly among different income groups during the 2010s. The air pollutants that are in the scope of this thesis are carbon monoxide, sulfur dioxide, and nitrogen dioxide. The air pollution data is produced by NASA and is mainly collected by satellites. The socioeconomic factors that are used in the study include household income, low-income households, households with children, one-parent households with children, and highly educated individuals. Socioeconomic data is obtained from Statistics Finland's Paavo database. To analyse the data, bivariate and multivariate ordinary least squares regressions are done for the variables. The main finding of this thesis is that air quality is somewhat unevenly distributed among different income groups in Finland. High-income households are more exposed to pollution than low-income households. High-income households are more exposed to pollution because there are higher pollution levels in urban areas where households have higher incomes. Additionally, highly educated individuals and one-parent households are exposed to more pollution than others. Air quality has developed differently for different pollutants during the 2010s. Not all air pollution concentrations have decreased in the 2010s. Air quality has improved, especially for carbon monoxide among low-income households, and for sulfur dioxide and nitrogen dioxide among high-income and highly educated individuals. This study contributes to the research on the distribution of air pollutants and can help the development of more effective air pollution policies.
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(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.
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(2024)The LULUCF (land use, land use change, and forestry) sector has been a net emission source for the past few years, which underscores the pressing need for effective measures to mitigate emissions and combat deforestation. Among these measures, the introduction of a land use change fee stands out as a promising policy instrument. The land use change fee, by the polluter pays principle, would impose a cost on deforestation activities, thereby internalising the negative externalities associated with land use changes. The prior studies of the land use change fee have focused on the climate effects, acceptability and legal feasibility of the fee and concentrated more on deforestation due to agriculture. Furthermore, prior studies consistently highlight significant uncertainty surrounding the implications and estimates of the land use change fee. Consequently, there exists a significant gap in the literature regarding the assessment of deforestation arising from construction activities. Thus, this thesis aims to address this gap by conducting an empirical market analysis of the unbuilt and built single-family lot transactions in the presence of a land use change fee. Additionally, the thesis compares two options for designing the land use change fee: hectare-based and emission-based fees. Different levels of these fees are analysed to understand their effects on deforestation, emissions reduction, and economic consequences. The thesis relies on three primary datasets for its data analyses: CORINE land cover change 2006-2012 and 2012-2018, Forest use declarations (FUDs) 2004-2018, and the Purchase Price Registry 2000-2020. Initially, the Corine land cover change and Forest use declarations were integrated using QGIS to determine the land use changes from forestland to other land use categories across Finland, incorporated with the analysis of local detailed plan areas. Subsequently, the market analysis was conducted by integrating the Purchase Price Registry, with a specific focus on transactions intersecting with both FUDs and the combined FUD+Corine dataset. The combined data from the Purchase Price Registry were utilised for conducting the market-level analysis, differences-in-differences analysis, and lastly, an analysis on the land use change fees, all performed using Stata. The results imply that the implementation of a land use change fee demonstrates a notable decrease in deforestation, and a proportional relationship is observed wherein a larger fee level corresponds to a higher reduction in deforestation. Moreover, emissions exhibit a corresponding decline with the introduction of the land use change fee as deforestation decreases. To effectively address the negative climate impact of deforestation, it is recommended that the fee level align with the climate harm. A uniform fee across Finland may lead to regional disparities in construction, as the fee would incentivise abandoning construction in areas where land prices are low. The emission-based fee system would effectively guide reductions in emissions where it is most cost-effective, but administrative costs may become prohibitively high. The proposed land use change fee of 5,000 euros per hectare results in an 8.5 % decrease in deforestation, as indicated by the market analysis, considering all zoning areas and lot sizes. This reduction is significantly lower than the estimate provided by the Ministry of Agriculture and Forestry, which projected a 20 % decrease, excluding local detailed plan areas and areas smaller than 0.5 hectares. Furthermore, the exclusion of local detailed plan areas and areas smaller than 0.5 hectares from the scope of the fee is discouraged based on the results, as this omission would negatively impact urban forests and biodiversity, as it would encourage deforestation activities in these areas. Further research could for instance focus on considering soil emissions and future carbon sequestration, focus on the construction of renewable energy sites and study the deforestation due to construction and agriculture simultaneously.
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(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.
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(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.
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(2024)Lake ice is vital for functioning of the lake ecosystems and provides multiple key ecosystem services to the Arctic societies. Climate change changes lake ice conditions which affects these ecosystems and ecosystem services provided by the lake ice. To assess changes of the lake ice in the Northern hemisphere, a climate service providing information on the lake ice extent (LIE) has been set up. The LIE service generates also other types of benefits to for example sector of hydroelectricity and recreation. Potential of climate services has not been fully realised by stakeholders and decision-makers. Economic evaluation may support communicating their value especially in times when objectives of public economy are preferred. Moreover, impacts of small climate services can be difficult to perceive, and certain types of benefits can be challenging to observe. These benefits include avoided costs using climate services. In this thesis avoided costs of the LIE service are estimated both quantitatively and qualitatively using avoided-cost assessment. Used data includes interview results, statistical data, and previous literature. Avoided costs the service generates comprise mainly of avoided in-situ lake ice monitoring trips and travel expenses, avoided flood and infrastructure damages, and potentially avoided injuries and mortality through improved safety. Although quantitatively assessed avoided costs are quite low, level of avoided costs using the LIE service are considerable when quantitatively and qualitatively assessed avoided costs are combined. Moreover, the benefit-cost ratio (BCR) of the avoided costs is reasonable. Findings underline the importance of understanding benefits of climate services that are difficult to quantify. Understanding these benefits also supports justifying financing of climate services. Nonetheless, results are highly uncertain and prospective assessments are required.
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(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.
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(2024)The depletion of natural resources, and the continuous increase in waste volumes, and consumption have increased environmental concerns strongly in recent years. To solve these environmental challenges, the interest in circular economy and resource efficiency in companies' business operations has increased, and the EU has also set targets to accelerate the circular economy. One of the first steps in promoting a circular economy is to understand the drivers and barriers associated with circular economy business models. This thesis aims to investigate the barriers and drivers of implementing five key circular economy business models. The business models studied are 1) resource recovery, 2) sharing platforms, 3) product as a service, 4) product life extension, and 5) Circular supply, which refers to circulating raw materials and resources. The thesis was carried out by interviewing five different Finnish companies from different industries whose business operations corresponded to the studied business models. The case companies have already implemented circular economy business models and can be assumed to have a good understanding of the drivers and barriers. With the help of case studies, the study aims to identify the key barriers and drivers that touch each business model and to identify differences between business models in terms of barriers and drivers. The study provides up-to-date perspectives on circular economy business, business models, and impacts on the development of sustainable business. Based on the results, circular economy related barriers that affect almost every business model can be seen as regulatory uncertainty, high investment costs, and product development more specifically, the development of new materials and products. Drivers shared by business models were related to increasing market demand for sustainability, regulation, innovation, stakeholder pressure, and organizational culture towards sustainability. The identified barriers and drivers also varied depending on whether the company was either manufacturer-oriented or technology-driven. Manufacture-oriented companies faced barriers related to market competition, material development, and the supply chain, while technology driven companies faced barriers related to user acquisition and financing. The drivers, on the other hand, were related to low carbon footprint in manufacturing-oriented companies and technological development in technology-driven companies. The results show that regulation will play a key role in the future tackling the current circular economy related barriers in business models. The regulation must be as predictable as possible, securing long-term investments and product development. It's highly important that legislation encourages sustainable practices by offering financial incentives to companies and promoting cooperation and innovation.
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(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.
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(2024)Global biodiversity is declining at an alarming rate, mainly due to unsustainable levels of industrial processes. Land use change is one of the main drivers of terrestrial biodiversity loss, and through deforestation it is also an important contributor to biodiversity loss in Finland. Biodiversity loss is considered as a negative externality, caused by inadequate land pricing that fails to internalize the value biodiversity creates through ecosystem services it supports. Biodiversity offsets constitute one method for pricing biodiversity loss in land use decisions. Mandatory offset policies have been introduced in large number of countries, while offsets are also used on a voluntary basis. Voluntary offset market is being developed also in Finland after the introduction of biodiversity offsets (‘ecological compensation’) in the Finnish Nature Conservation Act. Biodiversity offsets implement the ‘polluter pays’ principle and impose the cost of restoring at least an equal value of biodiversity, to the developer causing the harm. Offsetting aims to incentivize further implementation of the ‘mitigation hierarchy’, i.e., avoidance and reduction of the biodiversity loss, while allowing necessary development to occur. Voluntary offsetting creates benefits for developers through reputation and risk management and provides means to aim for ‘no net loss’ (NNL) of biodiversity – in line with global and national targets. The study used GIS data to estimate the biodiversity loss caused by industrial development in Finland during 2019–2023 and the costs of offsetting or avoiding the loss with alternative site selection to reach NNL. The study found that biodiversity loss from industrial land use change occurred even in the forests with the highest value for biodiversity conservation, while a considerable share of the loss would have been more cost-efficient to avoid than offset. Regional variation in the incentives were large and avoidance was generally incentivized the more valuable the biodiversity, and the lower the pressure on land use in the region. The costs and methods for offsetting the losses had considerable impacts on the economic incentives, whereas in some regions the costs of both alternatives would have been considerable and potentially disincentivized voluntary measures to reach NNL. Further research would be necessary to understand the factors influencing the decision-making of developers in the land use markets and to assess the importance of specific industries and activities on biodiversity loss caused by industrial land use change.
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(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.
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(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.
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(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.
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(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.
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(2024)The current clothing industry has a major impact on the environment and there is an urgent need to change the current production habits to be more sustainable. One solution is to introduce circular fashion products that are more durable, more easily repairable and recyclable. The current linear production model, resulting in clothing either being incinerated or sent to landfills, could be substituted with a more cyclical approach to material usage. The recent literature findings on barriers to engaging in the circular economy suggest that consumers have a significant role in changing the current production systems. By exploring consumer willingness to pay for hypothetical products that incorporate sustainable attributes, the current culture of resistance to incorporating innovative materials and designs may become more favourable if demand for circular products is closely examined. This study uses the contingent valuation method and consumer theory to quantify the price premiums for three hypothetical clothing products (T- shirt, trousers, and winter jacket) with third-party verified claims for environmentally friendly production (environmental impact is minimised) and circular design (longer lifetime and recyclability of materials). The latent factor design and statistical analysis techniques such as exploratory factor analysis and principal component method (PCA) are used to develop theoretical indexes to capture consumer attitudes. These indexes, along with background questions, are treated as independent variables in the willingness to pay modelling using regression analysis. The objective is to comprehend the behavioural factors that increase the price premium for pro-circular and pro-environmental attributes in clothing. The study collected data through an online survey involving 700 participants from universities in Finland. The population comprises young customers, specifically from the Z generation. The majority of participants were women (79%) and based in the Helsinki-Uusimaa region (47%). The findings indicate that consumer group that actively seeks out and compares clothing durability is willing to pay higher prices for long-lasting circular fashion items. Furthermore, consumers who prioritize environmentally friendly clothing exhibit a preference for durability in the case of inexpensive items such as T-shirts and trousers, while expecting environmentally friendly materials and ethical production practices in expensive items such as winter jackets. This research provides valuable insights into consumer behaviour and preferences, which can inform the development of sustainability plans within the clothing industry. By understanding the behavioral factors that drive consumer demand for circular and environmentally friendly products, companies can adopt more conscious production and design processes.
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(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.
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Cost-effective biofouling management strategies in the shipping sector : a Bayesian network approach (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.
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(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.
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(2024)This study investigates the economic implications of integrating catch crops into agricultural production systems in Finnish clay soils, focusing on their impact on farmer profitability and societal welfare over a 20-year horizon. Data from Salo et al. (2023) on soil organic carbon yield increase from catch crops is used to determine how catch crops influence private profits and social welfare. Accounting for externalities, yield effects, and additional costs associated with catch crop cultivation, the study assesses the economic profitability of catch crop adoption by examining whether the additional revenue covers the costs. The research also examines the social benefits from emission and nutrient loading reductions. Utilizing simulations conducted in Mathematica and grounded in theoretical frameworks using data from literature and statistics, the study aims to identify the mechanisms influencing private profits for individual farmers and the broader implications for social welfare. Economic instruments, including subsidies and taxes, are investigated to identify optimal policies that make catch crop farming economically viable for farmers and beneficial for society. The findings suggest that both farmers and society benefit from the adoption of catch crops within a 20-year period as the benefits are greater than the costs. Based on these results, policymakers could consider implementing targeted financial incentives to promote catch crop adoption among farmers with shorter time frames. This research contributes to understanding the economic and environmental aspects of sustainable agricultural practices, offering insights for policymakers and experts seeking to enhance agricultural sustainability and welfare outcomes.
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