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The Swedish Carbon Tax: A Resilient Success

September 2022

DOI:10.1093/oso/9780192856296.003.0012

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In book: Successful Public Policy in the Nordic Countries (pp.239-262)
Chapter: 12
Publisher: Oxford University Press

Authors:

Roger Hildingsson

Lund University

Åsa Knaggård

Lund University

The Swedish carbon tax of 1991, one of the first of its kind, has positioned Sweden as a forerunner in climate governance. It is often depicted an international success and today constitutes the backbone of Swedish climate policy. At first, however, the tax received widespread criticism and had limited political support. The policy design process was short, with limited time for deliberation. While providing the required tax revenues for the tax reform of which it was part, it was set at a level too low to reach the political goal of stabilizing carbon emissions. However, over the years, the tax has been redesigned, strengthening its delivery and gradually increasing political support. Discounts for industry motivated by competitiveness concerns have eased opposition, while households have carried the main burden. This has formed the basis for a counter-narrative about distributive impacts, which, however, has not yet succeeded in getting hold politically and only temporarily hindered continued increases in the tax rate. In terms of the four success dimensions in the PPPE assessment framework (programmatic, process, political and endurance), it represents what McConnell (2010) would call a ‘resilient success’—not perfect but a policy successful to a second-best degree. This chapter tells the story of how a highly energy dependent and export-oriented Nordic country came to introduce this novel policy so early on, and how a policy that initially was not seen as a success, over time came to be taken for granted.

The development of the Swedish carbon tax 1991-2019. Source: Criqui et al. 2019; reproduced with permission by its authors. Note: For 1991-1993, the industrial carbon tax level represents an average estimate, as the deductions for industries were provided on a complex case-by-case basis (for details, see e.g. Sterner 1994) until being replaced by a general discount for energy-intensive industries in 1994. Currency conversion based on an exchange rate of SEK 10.33 per EUR.

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

The Swedish Carbon Tax

  

Roger Hildingsson and Åsa Knaggård

An Early Adopter of Carbon Taxation

           

            

               

           

               

          

           

              

           

           

           

          

            

          

            

              

             

           

  

            

            

           

            

             

             

             

Roger Hildingsson and Åsa Knaggård, The Swedish Carbon Tax. In: Successful Public Policy in the Nordic Countries.

Edited by Caroline de la Porte et al., Oxford University Press. © Roger Hildingsson and Åsa Knaggård (2022).

DOI: 10.1093/oso/9780192856296.003.0012

Downloaded from https://academic.oup.com/book/44441/chapter/376663322 by guest on 21 October 2022

    

            

          

  

            

              

         

             

           

              

          

                 

          

A Resilient Success

 

             

            

           

            

              

           

        

             

          

           

          

             

  

             

            

          

            

           

                

          

             

             

      

           

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      

             

         

             

           

              

                 

              

             

           

             

            

         

             

             

             

            

          

           

          

            

 

             

              

            

            

           

              

               



         

         

          



 

               

                

                 

            

              

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    

          

         

             

            

          

         

        

           

           

           

         



            

              

          

             

          

         

            

  

 

             

               

             

           

            

              

          

            

          

              

             

            

    

            

          

           

           

            

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      

           

           

            

           

           

              

        

          

          

            

           

          

            

  Swedish Society for Nature Conservation    Swedish Bioenergy

Association       Fores  Global Utmaning 

             

             

             

              

  



            

            

            

            

            

         

          

              

           

         

      

            

            

             

             

             

              

          

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    

           

            

            

            

              

            

            

       

            

             

           

           

               

          

           

            

              

               

            

     

             

           

           

          

              



A Story of Sequencing, Timing and Coinciding Processes

            

            

             

            

          

            

             

               



      

         

          

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      

        

            

         

          

          

             

           

          

      

          

Socialdemokratiska arbetarpartiet       

            

             

             

             

          

           

             

          

            

            

      

            

           

            

           

        

         

          

           

           

             

             

           

             

           

            

           

           

               

                    

       

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    

             

            

             

              

         

             

          Moderata

samlingspartiet          Centerpartiet

         

          

   

           

             

            

            

      Folkpartiet     

          

              

          

            

         

            

             

        

           

            

             

         

          

         

           Miljo¨partiet de gro¨na

               

  

          

            

             

            

            

                

              

              

                  

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      

             

           

             

        

             

            

             

          

              

          

            

           

  

               

              

           

           

           

           

           

             

                

             

             

            

         

          

             

            

            

           

           

             

           

          

              

            

             

        

                  

  

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    

    

             

              

             

           

           

            

             

            

            

           

              

          

 

           

             

             

           

             

          

           

              

              

           

             

          

            

        

  

             

           

             

            

              

           

               

             

      

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      

            

            

          

           

         

         

             

           

           

            

             

             

              

           

           

      

           

            

             

               

              

             

          

          

          

           

          

           

         

             

              

           

   

 

         

                

              

  

Downloaded from https://academic.oup.com/book/44441/chapter/376663322 by guest on 21 October 2022

    

             

            

             

  

             

             

          



           

             

              

              

         

              

            

            

            

           

           

          

             

 

       

          

           

              

             

          

         

              

           

            

Va¨nsterpartiet kommunisterna       

            

           

           

                

                    



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      

            

     

 

            

               

            

                

            

     

            

           

           

           

          

          

            

            

              

            

               

              

           

     

           

           

            

             

             

         

The Politics of Implementation

            

             

           

           

          

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    

          

   Automobile Parliament  

               

              

           

         

          

            

             

             

     

              

            

            

          

           

              

             

           

 

        

            

           

            

               

         

            

             

             

          



             

          

         

            

              

            

           

          

         

             

            

Downloaded from https://academic.oup.com/book/44441/chapter/376663322 by guest on 21 October 2022

      

140

120

100

CO2-tax (Euro/tonne)

1991 1995

Carbon tax general level Carbon tax industry level

1999 2003 2007 2011 2015 2019

Fig. 12.1        

Source          

Note             

            

           

              

              

     ,       

               

              

           

               

            

           

               

               

     

            

             

           

               

         

           

             

        

           

            

            

             

             

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    

                

       

          

             

              

               

             

              

              

       Petrol Tax Upr ising   

             

        

         Krist-

demokraterna          

    

        

              

            

          

            

            

             

             

          

               

  

               

            

        

            

         

          

           

         

         

           

            

         Les gilets jaunes  

      Petrol Uprising 2.0  

            

           

            

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      

            

          

          

          

               

              

             

          

          

           

           

               

             

              

              

             

Conclusions: The Dynamics of an Emerging Success

             

             

              

                 

       

           

              

        

         

            

          

          

          

             

         

             

         

            

           

          

                

          

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    

           

              

             

             

         

          

              

           

            

           

          

             

          

             

            

          

            

            

           

           

               

             

           

          

            

              

              

            

             

            

         

            

            



          

            

            

            

             

              

             

Downloaded from https://academic.oup.com/book/44441/chapter/376663322 by guest on 21 October 2022

      

            

             

          

       

           

              

          

            

              

           

             

            

             

           

            

            

            

              

             

              

               

 

Questions for discussion

              

           

     

              

           

    

           

             

            

  

           

          

             

 

           

       

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    

Links to online resources

            

  



      



   

       

  

   

        

   

    State and trends of carbon pricing 2021  

         

 

References

              

 National Tax Journal   

         An evaluation of the impact

of green taxes in the Nordic countries     

          

    Development in a changing climate  

 



   Socialdemokraterna och miljo¨frågan: En studie av framstegstankens

paradoxer     

   Kampen om klimatet: Miljo¨politiska strider i Sverige 2006–2009

  

   Miljo¨opinionen i Sverige   

            Dagens Nyheter

   

              The climate

change performance index 2021: Results  

   Så ta¨nkte jag: Politik & dramatik   



        Great policy successes  

 

              

Sustainability  

   Sa¨tt pris på miljo¨n: Samha¨llsekonomiska argument i miljo¨politiken

 

      Dagens Nyheter     

Downloaded from https://academic.oup.com/book/44441/chapter/376663322 by guest on 21 October 2022

      

    Dagens Nyheter     

            Dagens

Nyheter    

        Ekonomisk Debatt

  

   Miljo¨framgångar: Från freonfo¨rbud till klimatlag  



     Expressen     

     Go¨teborgs-Posten     

    Go¨teborgs-Posten     

            

 Go¨teborgs-Tidningen     

            

      Governing decarbonisation: The state

and the new politics of climate change      

  

            

      Rethinking the green state: Environmental

governance towards climate and sustainability transitions     

     

      Svenska trender 1986–2007   

   

   Swedish climate policy: Lessons learned   

        Dagens Nyheter  

 

            

 Svenska Dagbladet    

   Agendas, alternatives and public policies  



   Vetenskaplig osa¨kerhet i policyprocessen: En studie av svensk kli-

matpolitik      



   Sveriges utsla¨ppsminskningar     



        Intervjustudie om fo¨rutsa¨ttningar fo¨r

en svensk klimatomsta¨ llning—prelimina¨ ra resultat[Interv iew study on the conditions

for a Swedish low-carbon transition—preliminary results]   

 



          Konikter,

samarbete, resultat: Perspektiv på svensk miljo¨politik. Festskri till Valfrid Paulsson

          

   Sweden and ecological governance: Straddling the fence 

   

           Journal

of Public Policy   

             Go¨teborgs-Posten    

         Dagens Nyheter 

  

Downloaded from https://academic.oup.com/book/44441/chapter/376663322 by guest on 21 October 2022

    

          



     

    

         European

Environment   

    Svenska Dagbladet     

         Svenska Dagbladet

   



   Westerbergeekten: Socialliberala reektioner  



   Bensinskatteupproret: En a¨kta folkro¨relse 



             

           

       

   State and trends of carbon pricing 2021   

 

Public material

      

      

 

     

       

      

        

  

        

       



          

     

        

  

       

        

  

            

     

          

       

Downloaded from https://academic.oup.com/book/44441/chapter/376663322 by guest on 21 October 2022

      

       

       

  Energy in Sweden Facts and Figures 2021   



  Utva¨rdering av styrmedel i klimatpolitiken. Delrapport 2 i

Energimyndighetens och Naturvårdsverkets underlag till Kontrollstation

2004/.       

    

         

      

       



Interviews

          

      

        

          

     

          

          



       

           

         

   

           

         



           

      

        Swedish Society for Nature

Conservation         



           

     

          

          

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Combating Climate Changes Through Fiscal Policies in Developed World: Key Insights for Indonesia from Scandinavian Green Tax Scheme

Article

Full-text available

Feb 2025

Climate change remains a pressing global issue, necessitating innovative fiscal policies to mitigate its impact. Green taxation, first conceptualized by Pigou in the 20th century, has emerged as a pivotal tool in encouraging sustainable practices while penalizing environmental degradation. This study examines the implementation of green tax policies in Denmark, Norway, and Sweden, highlighting their success in reducing emissions and fostering renewable energy adoption. Drawing lessons from these Scandinavian models, the research explores how Indonesia can tailor similar strategies to strengthen its green taxation framework. By adopting a comparative case study approach, this paper identifies critical success factors, including gradual implementation, public acceptance, and balancing economic and environmental goals. The findings aim to inform Indonesia's policymaking, enabling the alignment of fiscal policies with sustainable development objectives.

Fuelling Denial The climate change reactionary movement and Swedish far-right media Fuelling Denial The climate change reactionary movement and Swedish far-right media

Thesis

Full-text available

May 2024

Kjell Vowles

The fossil fuel industry has a long history of spreading disinformation about climate change science and obstructing mitigating policies. During the 2010s and 2020s, these vested interests have found a political ally in parts of the European far-right. This study explores how this has taken shape in Sweden, a country where there has been a political consensus about the seriousness of climate change. The ascendance of the far-right, however, has led to this consensus breaking down. The four empirical papers of the thesis analyse the climate change discourses on five Swedish far-right alternative media sites during the years 2018-2019 and in connection with the release of the IPCC’s sixth assessment report in 2021 (the physical science basis). The study shows how certain far-right media actors used literal denialist argumentation to renounce the science of climate change. This renouncement was used in the further far-right media ecosystem to designate climate change as a ridiculous topic using for example scare-quoting. Also, there was widespread, misogynistic opposition to Greta Thunberg. The thesis’ kappa introduces the term the climate change reactionary movement, to highlight how far-right opposition to climate change policies is connected to anti-feminism and nationalism. The nostalgic gaze of the Swedish far-right is towards the 1950s and 1960s and a society characterised by gendered divisions of labour, strong beliefs in technological innovation, and increased welfare for those deemed to be belonging to the nation. But this nostalgic gaze ignores that it was a society built on extensive exploitation of natural resources and otherised people, and fuelled by the carbon that today is threatening living conditions on the planet. The empirical analyses are done using methods from critical discourse analysis and content analysis, and the interdisciplinary theoretical framework is built on concepts from gender studies (industrial/breadwinner and petro-masculinities), environmental sociology (climate change obstruction), sociology (states of denial), political ecology (far right), media studies (propaganda feedback-loop) and history (concerning nationalism, industrial modernity, and fossil capital). Keywords: climate obstruction, denialism, nationalism, masculinities, modernity, alternative media, anti-reflexivity, Sweden

Exploring a green Swedish model: Coinciding and contradictory interests on a just climate transformation in Sweden

Article

Full-text available

Feb 2025
AMBIO

Climate policies are challenged around the world, a development coinciding with the backlash of globalisation. The emergence of the modern welfare state, however, indicates that similar tensions may give rise to transformative change, if coinciding interests for change develop. This article explores the case of Sweden, critical due to its longstanding role as an environmental frontrunner, now experiencing climate policy rollback. Based on 31 in-depth interviews, we analyse perceptions on a just transformation among business, trade union and civil society actors. The analysis reveals new and coinciding interests, driven by desire to restore climate leadership, and includes financial reform, more active state interventions and new policy tools to ensure public legitimacy. Views diverge on the depth of a just transformation, and power relations are different compared to the emergence of the welfare state. Nevertheless, a green Swedish model can be discerned, forging enhanced climate mitigation and renewed welfare state arrangements.

Fuel for revolt - moral arguments as delegitimation practices in Swedish fuel protests

Article

Full-text available

Mar 2024
ENVIRON POLIT

This article examines the role of moral arguments in the delegitimation of transition policies. Previous research has highlighted attitudes and arguments that explain resistance against transition policies, including perceptions of unfairness; inefficiency and effectiveness; lack of trust; and ideology. This article provides further understanding of resistance to climate policies by zooming in on how social movements implicitly and explicitly use moral arguments to delegitimise low-carbon transition policies. Through a qualitative interview study with members of a Swedish social media movement against low-carbon transport policies, we analyse central arguments against policies; how moral considerations figure in them; and how these strengthen argumentative delegitimation practices against transition policies in the transport sector. We show how moral arguments serve to legitimise protests both by instilling an urgency in the cause and generalising the demands to delegitimise mainstream transition policies, and suggest that recognition of this may contribute to both better analysis and policies.

Article

Full-text available

Feb 2023

There is strong scientific evidence for the existence of the significant economic value of several climate-related co-benefits. However, these are seldom recognised in policy-making, and knowledge is still scarce on some co-benefit types and categories. To identify research needs and highlight policy-making opportunities, we propose a new framework and three-type-taxonomy of climate-related co-benefits. We define climate policy co-benefits, such as improved air quality, as ‘Type 1’; co-benefits for climate objectives from policy-making in other fields, such as taxation, as ‘Type 2’; and co-benefits from policies designed to achieve multiple objectives as ‘Type 3’. In order to apply the framework and to analyse how co-benefits have been regarded in policy-making in a climate pioneering country, we also explore the case of Sweden. It is shown that several co-benefits exist, but that these are overlooked almost entirely in policy-making, constituting a bias against climate mitigation. In order to counteract this problem, the article presents a number of recommendations, including a call to researchers to identify and quantify additional co-benefits and to policy-makers on governance reforms, including the need to organise policy-making processes and set decision criteria that promote the consideration of co-benefits.

Modelling the social cost of carbon for Malaysia

Article

Full-text available

Feb 2025

The interest in the economics of climate change and the need to quantify a more accurate financial value of the damage caused by every additional metric tonne of greenhouse gas (GHG), known as the social cost of carbon (SCC), is growing. Governments and decision-makers have utilised SCC estimations for more than ten years in benefit-cost analysis, using insights from climate science, economics, demography, and other fields. Malaysia has committed to reduce 45% of its GHG emission intensity by Gross Domestic Product (GDP) by 2030 compared to the 2005 level and achieve net-zero as early as the year 2050. However, current estimations of SCC are high and may negatively impact the Malaysian economy and no longer align with the latest research. To achieve its objective of net-zero emissions, the government of Malaysia must capitalise on the country's potential as a carbon sink by increasing conservation efforts in protected areas and arresting deforestation. It will establish an ideal trajectory for the SCC that aligns with its environmental obligations while supporting sustainability in the face of climate change challenges. A price on GHG emissions can help mitigate and adapt to climate change. This study aims to determine the SCC in Malaysia, fill the gap in the downscaled Integrated Assessment Models (IAMs) and develop a new model called the Integrated Climate Model for Malaysia (ICLIM-2024R). The Nordhaus IAM model was downscaled using Malaysian data, including emissions from deforestation and an additional function for carbon sinks. With current policies, the SCC in the business-as-usual scenario (BAU) will be 64 USD/tCO 2 e in 2025 and 212 USD/tCO 2 e by 2050. The study recommended pathway is to increase the Totally Protected Area (TPA) of forests, which will yield a lower SCC of 23 USD/tCO 2 e in 2025 and 152 USD/tCO 2 e by 2050 compared to BAU, meeting commitments to the Convention of Biological Diversity (CBD) as well as the Paris Agreement. The Malaysian government should urgently leverage its carbon sink potential to set Malaysia's optimal SCC, achieve its net-zero goal, and grow the climate-friendly economy by marketing lower carbon-intensity products. Graphical Abstract

The electoral consequences of environmental accidents: Evidence from Chernobyl

Article

Sep 2023
J PUBLIC ECON

Adrian Mehic

Use of Economic Instruments in Nordic Environmental Policy 2018–2021

Book

Full-text available

Jun 2023

An All Too Successful Reform?: The 1997 Overhaul of the Swedish Budget Process

Chapter

Full-text available

Sep 2022

Andreas Bergh

This book presents 23 in-depth case studies of successful public policies and programmes in Sweden, Denmark, Finland, Norway and Iceland. Each chapter tells the story of the policy’s origins, aims, design, decision-making and implementation processes, and assesses in which respects—programmatically, process-wise, politically and over time—and to what extent it can be considered a policy success. It also points towards the driving forces of success, and the challenges that have had to be overcome to achieve it. Combined, the chapters provide a resource for policy evaluation researchers, educators and students of public policy and public administration, both within and beyond the Nordic region.

Carbon Taxation: A Tale of Three Countries

Article

Full-text available

Nov 2019

Carbon pricing is considered by most economists as a central dimension to any climate policy. It is assumed to bring simple, transparent, and cost-effective means to change investment and consumption behaviors. The most straightforward method is carbon taxation, but its implementation is more complex. This study provides a comparative analysis of carbon taxation in three countries—Sweden, Canada, and France—aimed at drawing lessons for the future of carbon taxation. Comparing the experience of the three countries reveals that carbon taxes, once in place, do have the intended effect. In this sense, they work well. However, the analysis also reveals very different situations in terms of advances, difficulties, and results, which highlights the need to carefully consider the social and political conditions for the acceptance and effective implementation of such economic instruments. Against this background, the comparative analysis yields four main insights that deserve further research from economics and social scientists: the ability to combine pure economic instruments and other regulation or policies and measures; the management of lobbies and vested interests; the identification of a clear strategy for the recycling of the carbon revenues, whether earmarked or not; and finally, the importance of these three dimensions of carbon taxes in the new settings of zero net emission policies.

Sweden and ecological governance

Book

Full-text available

Jul 2018

Lennart J. Lundqvist

Too Many Targets or Too Few Measures? Discourses on Decarbonisation in Swedish Climate Policy-Making.

Working Paper

Full-text available

Dec 2014

Roger Hildingsson

An Evaluation of the Impact of Green Taxes in the Nordic Countries

Technical Report

Full-text available

May 2002

The purpose of this report is to summarise the evaluations and studies of green taxes, that have been conducted in the Nordic countries and to discuss some of the methodological problems associated with these types of analyses.

Policy Success, Policy Failure and Grey Areas In-Between

Article

Full-text available

Dec 2010
J Publ Pol

Allan Mcconnell

Policy protagonists are keen to claim that policy is successful while opponents are more likely to frame policies as failures. The reality is that policy outcomes are often somewhere in between these extremes. An added difficulty is that policy has multiple dimensions, often succeeding in some respects but not in others, according to facts and their interpretation. This paper sets out a framework designed to capture the bundles of outcomes that indicate how successful or unsuccessful a policy has been. It reviews existing literature on policy evaluation and improvement, public value, good practice, political strategy and policy failure and success in order to identify what can be built on and gaps that need to be filled. It conceives policy as having three realms: processes, programs and politics. Policies may succeed and/or fail in each of these and along a spectrum of success, resilient success, conflicted success, precarious success and failure. It concludes by examining contradictions between different forms of success, including what is known colloquially as good politics but bad policy.

Sätt pris på miljön: Samhällsekonomiska argument i miljöpolitiken

Article

Jan 1968

E. Dahmén

Towards a Decarbonized Green State? The Politics of Low-Carbon Governance in Sweden

Chapter

Jun 2015

In this chapter we explore how a decarbonized green state might develop. Climate governance provides venues towards decarbonization and for greening the state by steering and enabling transformative social change. We study low-carbon transitions in Sweden in a set of policy sectors for their potential to reduce carbon emissions, spur innovation and enter policy paths towards decarbonization. Sweden has been successful in supporting transitions in the energy sector but decarbonization is not institutionalized in the transport and industry sectors. While lacking a strategic focus on long-term decarbonization, climate policy is dominated by the market-liberal norm of cost-efficiency.

Environmental tax reform: The Swedish experience

Article

Dec 2007
Eur Environ

Thomas Sterner

In the 1980s the Swedish tax system was in severe trouble. With large segments of the population paying 80% marginal tax rates it became a priority issue for government to reduce tax levels on income but without incurring too large a budget deficit. In this context and as part of a general tax reform (the main focus of which was to reduce marginal taxes and broaden the tax base) environmental taxes had a special chance of gaining acceptance and taxes on energy and transport were increased heavily around 1991. The following year industry succeeded in repealing a number of the increased taxes on energy. This reform was however, financed by further increasing the energy taxes for the household and transport sectors. This increase was designed so as to safeguard the competitivity of Swedish industry without reducing energy tax revenues. Generally it appears that the energy tax and the carbon tax are successful as revenue raisers while their environmental effect will only be seen in the long run (and furthermore only if other countries follow suit since the environmental problems such as the greenhouse effect are truly global in character). On the other hand such taxes as on sulphur and the tax differentiation on leaded fuel, as well as the tax differentiation between different qualities of diesel and fuel oil, have been very successful in an environmental sense, but have - for the same reason - not given any substantial revenue contributions. The differentiation between industrial and other consumers has had at least one unfortunate side-effect: that of creating a considerable disparity between industrial and other consumers' prices for some energy carriers. This type of price wedge always creates undesirable incentives for tax evasion.

Tax Reform of the Century—The Swedish Experiment

Article

Feb 1996

What can changes in tax structure accomplish? The Swedish tax reform of 1991 is the most far-reaching reform in any industrialized country in the post-war period. It represents a thorough application of a strategy of rate cuts cum base broadening, and it has affected a myriad of economic incentives in a more or less substantial way. This article reviews the lessons form a major evaluation effort, sponsored by the Swedish government, and involving a large number of researchers.

The climate change performance index 2021: Results

J Burck
U Hagen
N Höhne
L Nascimento
C Bals
T Essop

Burck, J., U. Hagen, N. Höhne, L. Nascimento, C. Bals and T. Essop. 2020. The climate change performance index 2021: Results. Germanwatch. http://www.ccpi.org/.

The Swedish Carbon Tax: A Resilient Success

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