Flexible emission fees: An incentive for driving sustainable production and consumption

This report explores the urgent question of how to transition to a green economy. If the price of pollution becomes the same as the price to not pollute, i.e. the investment required for a non-polluting solution, could market forces be harnessed to create a totally green economy? Would the consumer lead the way if pollution fees were simply credited into everyone’s account? Would economic growth and technical development forge ahead?

Taking the flexible fee mechanism proposed by Höglund as a starting point, the report examines the academic literature and presents the results of a workshop where leading Swedish economists and environmentalists examine the issues involved in price discovery mechanisms and call for further developments in this field.