The Impact of Emissions Trading on the Price of Electricity in Nord Pool : Market Power and Price Determination in the Nordic Electricity Market

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market area. There is reason to believe that imperfect competition prevails in the Nordic market, thus the issue is approached through the theory of oligopolistic competition. The generation capacity available at the market, marginal cost of electricity production and seasonal levels of demand form the data based on which the dominant firms are modelled using the Cournot model of competition. The calculations are made for two levels of demand, high and low, and with several values of demand elasticity. The producers are first modelled under no carbon costs and then by adding the cost of carbon dioxide at 20€/t to those technologies subject to carbon regulation. In all cases the situation under perfect competition is determined as a comparison point for the results of the Cournot game. The results imply that the potential for market power does exist on the Nordic market, but the possibility for exercising market power depends on the demand level. In season of high demand the dominant firms may raise the price significantly above competitive levels, and the situation is aggravated when the cost of carbon dioixide is accounted for. Under low demand leves there is no difference between perfect and imperfect competition. The results are highly dependent on the price elasticity of demand.

Hintakäsitykset funktionaalisista elintarvikkeista ja euron käyttöönoton vaikutus

Työn tavoitteena oli tutkia kuluttajien hintakäsityksiä funktionaalisista elintarvikkeista sekä euron käyttöönoton vaikutuksia niihin. Teoriaosassa tarkasteltiin funktionaalisen elintarvikkeen käsitettä ja sen hintaan liittyviä kysymyksiä erikoistuotteen näkökulmasta sekä kuluttajan hintakäsityksen muodostumisessa tärkeää osaa näyttelevää referenssihintaa ja sen vaikutuksia sekä teoreettista taustaa, erityisesti adaptaatiotasoteoriaa. Lisäksi tarkasteltiin euron mahdollisia vaikutuksia referenssihintaan sekä referenssihinnan roolia kuluttajan hintakäsityksen muodostumisessa. Työn empiirinen osa koostui kahdesta kyselytutkimuksesta, jotka suoritettiin ennen euron käyttöönottoa joulukuussa 2001 ja sen jälkeen huhtikuussa 2002. Ensimmäiseen kyselyyn vastasi 182 ja toiseen 135 vastaajaa. Vastaajat olivat pääkaupunki- sekä Hämeenlinnan seudulta. Tutkimuksen kohteena olevat tuotteet olivat Gefilus®-piimä ja -mehut, ja kohderyhmänä niiden käyttäjät. Tutkimuksen empiirisessä osassa selvitettiin funktionaalisten elintarvikkeiden käyttö- ja ostotottumuksia sekä mielipidettä niiden hintatasosta suhteessa terveysvaikutuksiin ja tavallisiin elintarvikkeisiin. Referenssihintoja tutkimuksen kohteena oleville tuotteille tutkittiin sopivana, korkeimpana ja alhaisimpana hyväksyttävänä hintana.Euron vaikutuksia hintakäsityksiin tutkittiin vastausten eroissa kyselyjen välillä. Euron käyttöönoton aiheuttamia referenssihintojen muutoksia tarkasteltiin hintaherkkyysmittari avulla. Lisäksi tutkittiin euron käyttöönoton aiheuttamia muutoksia ostokäyttäytymisessä. Faktori- ja ryhmittelyanalyyseja käytettiin vastaajien ryhmittelyyn. Funktionaalisia elintarvikkeita pidettiin vastaajien joukossa kalliina suhteessa niiden terveysvaikutuksiin tai tavallisten, ei-funktionaalisten, tuotteiden hintaan. Tutkimuksen kohteena olleiden tuotteiden, Gefilus®-piimän ja -mehujen, hintatasoa pidettiin myös kalliina. Gefilus®-mehujen hintaa pidettiin yleisesti liian kalliina. Euron käyttöönotto aiheutti muutoksia vastaajien referenssihinnoissa. Euron käyttöönoton voitiin havaita vaikuttaneen kuluttajien hintakäsityksiin siten, että hinnat vaikuttivat aikaisempaa halvemmilta. Lisäksi euron käyttöönotto oli vaikeuttanut hintojen arviointia. Lähes kaikki vastaajat olivat sitä mieltä, että euron käyttöönoton jälkeen hinnat olivat nouseet. Euron käyttöönotto oli myös lisännyt pankkikortin käyttöä maksuvälineenä käteisen sijaan. Avainsanat: funktionaalinen elintarvike, terveysvaikutteinen elintarvike, hintakäsitys, referenssihinta, euro

Vapaa-ajan vieton luonnonvarojen kulutus

This thesis studies the use of natural resources for leisure time activities. The method used is Material Input per Service Unit (MIPS method). Leisure time has an increasing effect on the material flows of households, and that way has a bigger pressure on the environment. The most popular way of spending spare time in Finland is to watch TV and to listen to music or radio. Regardless of these, this thesis takes a closer look at boating, playing a musical instrument and visiting a theatre and tries to quantify their material flows. MIPS calculations of this thesis are case-studies and do not tell the whole truth about the hobbies. The aim was to have an overview about the magnitude of the activities. In the boating calculations, inside the system boundaries there are the boat itself, transport of the boat, outboard motor, gasoline consumption of the outboard motor, travelling to and from the harbour, and the harbour infrastructure. Calculations of playing a music instrument consider the instrument itself, music school and its maintenance, and travelling to the school. In the case of theatre the included things are theatre house and its maintenance, decor and costumes of the plays, transport of the decor, and travelling of the audience. The results of this thesis suggest that the biggest material flow of boating comes from travelling to and from the harbour and from the harbour infrastructure. The gasoline consumption of the outboard motor also makes a difference. One hour of boating with a rowing boat consumes 1 kg of abiotic materials. Boating with an outboard motorboat consumes astonishing 113 kg of abiotic resources. Visiting a music lesson for one hour consumes 9 kg of abiotic resources when travelling there by bus. One hour in a theatre play consumes 17 kg of abiotic materials when travelling by bus. Transport has a significant role on the resource consumption of leisure time activities.

Suomen maatalouden tuottamat kasvihuonekaasujen päästöt eri politiikkaskenaarioissa

Climate change is the single biggest environmental problem in the world at the moment. Although the effects are still not fully understood and there is considerable amount of uncertainty, many na-tions have decided to mitigate the change. On the societal level, a planner who tries to find an eco-nomically optimal solution to an environmental pollution problem seeks to reduce pollution from the sources where reductions are most cost-effective. This study aims to find out how effective the instruments of the agricultural policy are in the case of climate change mitigation in Finland. The theoretical base of this study is the neoclassical economic theory that is based on the assumption of a rational economic agent who maximizes his own utility. This theoretical base has been widened towards the direction clearly essential to the matter: the theory of environmental eco-nomics. Deeply relevant to this problem and central in the theory of environmental economics are the concepts of externalities and public goods. What are also relevant are the problems of global pollution and non-point-source pollution. Econometric modelling was the method that was applied to this study. The Finnish part of the AGMEMOD-model, covering the whole EU, was used for the estimation of the development of pollution. This model is a seemingly recursive, partially dynamic partial-equilibrium model that was constructed to predict the development of Finnish agricultural production of the most important products. For the study, I personally updated the model and also widened its scope in some relevant matters. Also, I devised a table that can calculate the emissions of greenhouse gases according to the rules set by the IPCC. With the model I investigated five alternative scenarios in comparison to the base-line scenario of Agenda 2000 agricultural policy. The alternative scenarios were: 1) the CAP reform of 2003, 2) free trade on agricultural commodities, 3) technological change, 4) banning the cultivation of organic soils and 5) the combination of the last three scenarios as the maximal achievement in reduction. The maximal achievement in the alternative scenario 5 was 1/3 of the level achieved on the base-line scenario. CAP reform caused only a minor reduction when com-pared to the base-line scenario. Instead, the free trade scenario and the scenario of technological change alone caused a significant reduction. The biggest single reduction was achieved by banning the cultivation of organic land. However, this was also the most questionable scenario to be real-ized, the reasons for this are further elaborated in the paper. The maximal reduction that can be achieved in the Finnish agricultural sector is about 11 % of the emission reduction that is needed to comply with the Kyoto protocol.