The Carbon Tax Has Proven Its Effectiveness in Sweden

Friday 03 July 2009

http://www.truthout.org/070309F?n

The Carbon Tax Has Proven Its Effectiveness in Sweden

Thursday 02 July 2009

by: Olivier Truc  |  Visit article original @ Le Monde

Swedish Environment Minister Andreas Carlgren. Since Sweden introduced a carbon tax in 1991, Swedish greenhouse gas waste has been reduced by 9 percent, while, during the same period, economic growth was 48 percent. (Photo: Lars Anders Karlberg / NyTeknik)

    Sweden, which has just taken over the European Union (EU) presidency for six months, is attempting to convince its European partners to follow its example by instituting a carbon tax. "A carbon tax affects many more waste products than does the system of a market trading carbon emissions quotas," asserts Swedish Environment Minister Andreas Carlgren. "But, take care," specifies Ministry spokesperson Mattias Johansson, "we're not talking about a European tax. Every country would assess its own carbon tax. There would be a minimum level and the tax would be deducted by the member governments, along the lines of the VAT."

    In 1991, the Swedes established a carbon tax that bears on energy consumption. To the skeptics who assert that this tax kills growth, they answer with their record: since the introduction of the tax, Swedish greenhouse gas waste has been reduced by 9 percent, while, during the same period, economic growth was 48 percent. "So this tax does not interfere with growth in any way," concludes Mr. Johansson.

    "If we had not had this tax, CO2 emissions would have been 20 percent higher in 2010 than the level in 1990," emphasizes Finance Ministry Adviser Susanne Akerfeldt. "The carbon tax brings in 15 billion Kroner (1.4 billion Euros) every year to the Swedish government. At its launch in 1991, it was assessed at 27 Euros per ton of CO2. Today, it is assessed at 108 Euros per ton.

    The successive increases in taxes on fuels have reduced CO2 emissions related to transportation, a phenomenon essentially due to individual cars. Every year between 1990 and 2005, a gain of between 1.5 and 3.2 million tons has been recorded. The government insists on the fact that the Swedes count among the Europeans who emit the least CO2 (6.7 tons per inhabitant versus the 9.3 tons per inhabitant EU average).

    A carbon tax, they deem in Stockholm, sends a clear political signal: the principle that the polluter pays. And the tax is easy to administer, the Swedes insist. "We have always suggested reducing taxes on work and, to replace them, increasing the taxes on CO2 emissions. That's what's happening progressively. But we think that the carbon tax is still too low in Sweden," asserts Anders Grönvall, spokesman for the Association for the Protection of the Environment, one of the most powerful environmental organizations in Sweden, which notes that the present center-right government converted only recently to the carbon tax.

    Swedish employers and management - firmly opposed to this tax until just recently - has now softened its criticism. "The carbon tax has not proven to be a major obstacle to growth, but it must be remembered that that's because industry enjoys a 79 percent reduction compared to what households pay," specifies Torbjörn Spector, a specialist in energy taxation at the employers' organization Svenskt Näringsliv. "In order not to be penalized, industries exposed to international competition must maintain this advantage."

    Sweden is better off than a number of countries, first of all because its oil dependence is less marked. Thanks to nuclear energy and hydroelectric power stations that together produce almost all of Swedish electricity, but also because, along with Finland, it is the country that uses the most non-fossil fuels, essentially forest biomass. The fuels drawn from renewable resources like ethanol, methane, agro-carburants, peat, and garbage are, in fact, exempt from the carbon tax. That has favored recourse to biomass for heating and industry. Since the tax's implementation, home owners who use fuel oil for heating have become the exception.

    A few years ago, the social-democratic government had proposed that Sweden become the first country in the world totally independent of oil between now and 2020. The present government has yet to take up the idea for its own account.

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    Translation: Truthout French language editor Leslie Thatcher.

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