Energy Use, Efficiency Gains and Emission Abatement in Transitional Industrialised Economies: Poland and the Baltic States

Sammanfattning: This thesis is a study of how energy use and air pollution in Poland, Estonia, Latvia and Lithuania have been affected by the economic transition after 1989. It consists of six articles, which examine three different aspects of these changes. The first group of articles analyses the structure of energy use in the Baltic states (Article I) and Poland Articles II and III) at the outset of transition. The results show that these countries had a primary energy consumption per GDP which was two to three times higher than in developed market economies because of a more energy intensive structure of the economy and higher specific energy intensities in many sectors of the economy. They also had significantly higher levels of air pollution per primary energy consumption and GDP because of a heavy reliance on fossil fuels, an energy intensive economy and an ineffective control of emissions. The deep fall in energy consumption during the first phase of transition was due to a sharp drop in industrial output and higher fuel prices. In the Baltic states, part of the fall in energy consumption was the result of shortfalls in the supply of oil and gas from Russia. The second group of articles (Articles IV and V) examines changes in electricity production, fuel consumption, generation efficiency and sulphur dioxide (SO2) emissions in the Polish power industry between 1988 and 1997. The results show that SO2 emissions dropped by 45 per cent between 1988 and 1997. The drop in emissions was partly the result of a fall in economic activity and electricity production in the early 1990s. Other reasons were more important. One reason was the restructuring of the power industry, during which hard budget constraints were introduced and the price of coal was raised. Another reason for the fall in emissions was the reorganisation and stricter enforcement of environmental protection. Together, these reforms created strong incentives for power plants to switch to high-quality coal with lower sulphur and ash content. Because of higher coal prices and the introduction of hard budget constraints, power plants improved their generation efficiency, which also contributed to the reduction of emissions. After 1994, the decline in SO2 emissions has continued thanks to the installation of pollution abatment equipment. The final article (Article VI) analyses the conversion of small boilers for heat production from fossil to biomass fuels. It compares the results of six boiler conversion projects in the Baltic states with seven projects in Russia and the Czech Republic. The results show that the conversions in the Baltic states reduced the fuel cost of heat production and achieved cost-effective reductions of SO2 and carbon dioxide (CO2). It also resulted in transfer of technology and know-how, less dependence on imported fuels and the creation of local markets for biofuels.