The GGKP's Seventh Annual Conference took place on 21-22 October 2019 in conjunction with the Global Green Growth Institute’s Global Green Growth Week 2019 (GGGW2019) on the theme of “Achieving Global Energy Transformation” in Seoul, Republic of Korea.
Dr. Stanislav Shmelev presented his paper "Green Fiscal Reform in Sweden: Econometric Assessment of the Carbon and Energy Taxation Scheme" in Session C.1: Policy and Planning Approaches for the Green Energy Transition. Dr. Shmelev is the Director of Environment Europe, a non-governmental research centre based in Oxford, United Kingdom. The think tank focuses on research in macroeconomic sustainability, sustainable cities, renewable energy, ecosystems and biodiversity and sustainable waste management, consulting international organizations, governments, regions and companies.
1) Briefly describe the topic and conclusion of your research.
The topic of our research is "Green Fiscal Reform in Sweden: Econometric Assessment of the Carbon and Energy Taxation Scheme". This work has been undertaken with an aim to assess the effectiveness of energy and carbon taxes in Sweden, the country that was one of the first to introduce the carbon tax and also the country that has one of the largest carbon taxes at present.
2) What are the key policy implications?
The main policy message of our paper is that carbon taxes work. The details revealed through econometric modelling are more insightful. In Sweden, carbon taxes that applied to petrol were statistically significant related to reductions in CO2 emissions for the country as a whole. Equally, previously introduced energy taxes applied to coal and liquefied petroleum gas (LPG) were effective in driving CO2 emissions down. Significant factors include the introduction of nuclear electricity and the expansion of hydroelectricity in Sweden. At the same time, net electricity imports reduced CO2 emissions from Sweden's economy, as did imports of certain products like palm oil.
3) If applicable, briefly elaborate on the policy framework and financing mechanism.
Environmental taxes, represented by a CO2 tax in this instance, were introduced by British economist Arthur Pigou and have been applied in Sweden since 1957 and the European Union since 1970s. The environmental and resource taxes, it can be argued, should replace labour and VAT taxes, because they reduce the incentive to use more material resources and generate harmful pollutants. Environmental taxes can often be used as a vital fiscal instrument; however, their main purpose is to reduce environmental impacts.
4) Are there any challenges you would like to underline from this research?
One of the most significant challenge is data availability. In many instances related to biodiversity loss, urban pollution etc., the time series datasets are not long enough to allow detailed econometric analysis.
5) What are the opportunities for collaboration around this issue?
Environment Europe is very open to collaborations in the field of evidence-based policy assessment. We are happy to assist governments willing to empirically assess the effectiveness of a particular policy tool. More information about our work can be found at http://environmenteurope.eu
6) Which session are you interested in attending at GGKP7 and why?
All sessions. The conference promises to be very interesting.