Energy, climate and environmental policy

Research in this area focuses on the impact of energy and climate policy on firms’ competitiveness, consumer choices and greenhouse gas emissions.

It is important to be aware of the incentive effects of policy measures when climate and energy policy is formulated: how firms and households will react to policy guidance and what happens to greenhouse gas emissions, firms’ competitiveness and household choices. One important question is the proportion of CO₂-based charges, such as carbon tax, paid by consumers and firms.

Energy markets are at a turning point. How policy measures affect the functioning of energy markets and investments is one of the key questions studied by VATT. It is important to understand how various policy actions guide firms’ R&D activities and how they impact changes in the energy sector and the economy more broadly.

Our evaluation is conducted using econometric methods and micro-economic optimization models.

Current research topics include:

• How our energy system needs to change if Finland's climate objectives are to be met in a cost-effective manner
• How a smart energy system will affect the Nordic energy markets
• fuel and car tax policies, in particular how consumer fuel prices respond to changes in fuel taxes
• development of new energy technologies and innovations, and policy actions to support these
• effects of business subsidies to firms' global competitiveness
• households’ investment behaviour in respect of energy prices and the role of households in an evolving energy market.

We have gathered the essential findings from our studies on energy and climate policy on one page.