Carbon Tax Sweden

About Carbon Tax Sweden

Sweden introduced the worlds first carbon tax in 1991, initially at 27 per ton of CO2. The tax was part of a major tax reform that shifted taxation from labor to pollution. The carbon tax was gradually increased to approximately 130 per ton, the highest in the world. The tax contributed to Swedens 80 percent reduction in carbon emissions per unit of GDP since 1991. Critics argued the carbon tax was regressive and hurt competitiveness. Sweden addressed this by using carbon tax revenue to reduce other taxes. The carbon tax has been cited as a model by climate policy advocates. British Columbia implemented a similar revenue neutral carbon tax in 2008. The EU carbon border adjustment mechanism, launched in 2023, extends carbon pricing to imports.