Headlines 2013

Public Ownership is Questioned

2013-08-29


A report "Energy markets, ownership and climate" (SNS Förlag) written by Thomas Tangerås, IFN, Tommy Lundgren, Jesper Stage and Bjorn Carlén was presented on August 29. The authors warn that it might be expensive and inefficient to let municipally owned companies take responsibility for the climate. In an article in the Swedish newspaper Svenska Dagbladet writes Thomas Tangerås about the report: "A logical conclusion would be (partial) privatization of operations in competitive markets."

In the photo can be seen, from left: Björn Carlén, Jesper Stage, Thomas Tangerås, Tommy Lundgren as well as the commentators Göran Karreskog, the Swedish Competition Authority, Maria Eriksson, freelance artiter and Carl Cederschiöld, chairman KFS.

 

The authors have reached a number of conclusions: They argue, among other things, that "extra steps” in the name of climate policy at the local level do not have the effect that rhetoric claims. The researchers suggest that municipalities that want to influence the climate do better if they buy and cancel tradable emission permits in the EU ETS system, than if they invest in for example local renewable energy. This is because extra steps taken on local level creates legroom, under the EU cap for emission, for others to increase emissions.

In the report the researchers do a review of the pros and cons of private and public ownership (state and municipalities). They point to competition concerns and suggest a review of state-owned energy companies in terms of corporate governance. They explain that underpriced capital is one of the problems: "An alternative solution would be to require the municipal owned companies receiving capital investment on market terms. This means for example that municipalities would refrain from acting as the guarantor of loans for municipality owned energy companies." The rationale for this would be to level the playing field between municipal and private operators.

Read opinion piece in Svenska Dagbladet by Thomas Tangerås, IFN, "Limitations are needed for state owned firms". (in Swedish)

Read the report (in Swedish)
 

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