The biofuel bubble in northern Sweden and Finland
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 16 November 2012
Abstract
Purpose
The purpose of this paper is to offer a critique of government intervention in the production of biofuel in northern Sweden and Finland, highlighting some of the welfare consequences.
Design/methodology/approach
After a short review of government interventions, including laws, taxes and subsidies, Austrian economic principles are applied, which lead to universal statements about the impacts of government intervention.
Findings
Government intervention on behalf of the biofuel production industry leads to the emergence of an investment bubble, with consequential negative impacts on welfare.
Practical implications
The paper informs about the true costs of intervention in biofuel production, which suggests that policy makers may abstain from justifying interventions for the sake of increasing people's welfare.
Originality/value
The paper contributes to the research of the production impacts of a new energy technology in the form of biofuel in particular and of governmental intervention in production in general. The paper, furthermore, enhances the use of the method and theory of the Austrian school of economic science.
Keywords
Citation
Walter, S. (2012), "The biofuel bubble in northern Sweden and Finland", International Journal of Energy Sector Management, Vol. 6 No. 4, pp. 569-584. https://doi.org/10.1108/17506221211282000
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited