The Use of Economic Instruments in Nordic Environmental Policy 2006–2009

image of The Use of Economic Instruments in Nordic Environmental Policy 2006–2009

The Nordic Council of Ministers publishes regular overview reports on the use of economic instruments in Nordic environmental policy. In this report, Part I presents an overview of the use of economic instruments with the main focus on changes during the years 2006 - 2009. Part II gives a brief overview of mixes of policy instruments (also other than economic instruments) and presents two case studies. There are generally few changes in the use of economic instruments since 2006, except for the introduction of the emissions trading system, EU ETS, and changes in vehicle registration tax systems to become more based on specific fuel use or CO2 emissions. In general, the tax systems could be made more effective and efficient by treating different sectors and fuels more equally.




Sweden has a long tradition of making use of economic instruments in the environmental policy. Since the 1990s, economic instruments have been a central part of the "green taxation" system where higher environmental taxes have been shifted against increased personal allowances and lower social security contributions. Under the green taxation, the government has increased the carbon dioxide (CO2) tax, the energy tax on electricity, the diesel tax, the waste tax, the tax on natural gravel, the pesticide tax, the road vehicle tax and the petrol tax, as well as introduced a SEK 0.005 electricity tax for industry. The taxes that have been lowered are the general salary charge, the energy tax and the diesel tax for agriculture and forestry. The personal allowance for income tax has also been raised. The aspiration is to achieve a SEK 30 billion green tax shift between 2001 and 2010 (Swedish Environmental Protection Agency, 2007).


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