I had read about British Columbia’s carbon tax initiative that began in 2008 in The Carbon Efficient City but I didn’t know much about its success or failure, so I thought I would do some research. Even before I began looking more in depth at BC’s carbon tax, it’s obvious that a 5 years study of its effects is still a little too short to truly be significant. Luckily, after doing a bit of research, I found out Sweden has been charging a carbon tax since 1991 and the plan they adopted is much more aggressive towards businesses that are CO2 emitters compared with BC’s tax. I won’t get into the details of the tax Sweden imposed in this post because there is not enough space, but if you would like to learn more about the tax feel free to read the two attached articles at the end of this post.
What I would like to highlight is before the carbon tax, Sweden’s GDP and CO2 emission’s followed a similar upward trajectory. After the tax was initially enacted both began a downward trajectory but after about a year in that direction, GDP and CO2 emissions split and GDP began to again increase while CO2 continued to decrease. It’s impossible to truly say that if the US imposed a similar tax our GDP and CO2 emissions would follow the same pattern, especially considering Sweden generally relies on nuclear, hydro and bio-mass sources for its power. However, what this does show is that imposing a CO2 tax on a first world nation has been successful at reducing CO2 emissions and did not affect long term GDP.
Here are two great articles, which are not too long, regarding Sweden’s carbon tax: