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The Use of Economic Instrumentsin Nordic Environmental Policy 1999-2001
Economic instruments have been applied in the Nordic countries for over ten years as tools to achieve environmental aims in addition to the continued predominant use of administrative regulations. The most common economic instruments employed are various taxes and charges, which above all are introduced to reduce emissions to air and / or to reduce the use of fossil fuels. Roughly, Nordic taxes directed towards fossil fuels can be divided into a basic energy tax, a tax on carbon dioxide and a sulphur tax, even though each country has its own specific environmental tax system. The industry sector is allowed different exemptions from tax in order to safeguard conditions for international competition. The taxes on carbon dioxide emissions in place in the Nordic countries have been evaluated in over 60 studies. The methods, as well as underlying assumptions, differ between these evaluations but they result in the conclusion that CO2 taxes do limit domestic CO2 emissions.