The Use of Economic Instruments in Nordic and Baltic Environmental Policy 2001-2005

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This new report commissioned by the Environment and Finance Group of the Nordic Council of Ministers continues the tradition of reviewing the use of economic instruments in environmental policy in the Nordic countries by providing a comprehensive overview. At the same time, this report extends the country coverage and content of the report. The application of economic instruments is not only discussed for the five Nordic countries, but also for the three Baltic countries. In addition, a discussion on the opportunities and shortcomings associated with the use of economic instruments in the field of environmental policy has been undertaken. The report is a follow-up of the previous five reviews – the last was published in 2002 (TemaNord 2002:581) – and discusses the latest development of the application of economic instruments covering the time period 2001-2005.




Power and heat production based on the combustion of fossil fuels (oil shale, heavy fuel oil, natural gas) and imported motor fuels represents the main source of national greenhouse gas emissions, as well as sulphur dioxide and particulate emissions, in Estonia. A characteristic of the Estonian energy sector is its heavy dependence on oil shale, especially in relation to electricity production. In 2003, the share represented by oil shale in primary energy supply was 64.7 percent, representing an increase of 4.8 percent compared with the previous year. The shares of other local fuels – wood and peat – diminished slightly, accounting for 9.7 percent and 1.1 percent, respectively. In 2003, local energy resources, therefore, accounted for 75.5 percent of primary energy consumption (Ministry of Economic Affairs and Communications, 2003).


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