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The Swedish experience of carbon taxation: Get a fossil free beer or carton of milk!

Welcome to Sweden. We can serve you a beer or a glass of milk with a very low carbon footprint—thanks to our carbon tax. This tax dates back to 1991. It was one of the world’s earliest carbon taxes, and today, it is the highest imposed by any government.

The price is 1150 SEK/tonne CO2, or 130 USD/tonne CO2 and is paid by all sectors except for companies included in EU-ETS, the common European emission trading scheme. A consequence is that the biggest emitters pay the lowest cost for carbon emissions, whereas households and small-scale industry pay much more for each emitted kilo CO2. In a way this is clever, we have been able to reduce carbon emissions very efficiently in the household sector and in industries that are not energy intensive or in international competition.

Despite the record high carbon tax, the Swedish economy is thriving.

This may in part be due to the carbon tax, as a major result is reduced imports of fossil fuels and better use of domestic renewable energy sources. The share of renewable energy in the Swedish final energy use is 54%, of which bioenergy accounts for 36%.

Since a year ago, food industries and other “non-heavy” industries pay a full carbon tax (these industries previously had a rebate, but it has been eliminated). We see many good projects and investments in the industry as a result of this carbon price.

Read more at Carbon Pricing Leadership Coalition

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