The Swedish carbon tax: A resilient success

The Swedish carbon tax of 1991, one of the first of its kind, has positioned Sweden as a forerunner in climate governance. It is often depicted an international success and today constitutes the backbone of Swedish climate policy. At first, however, the tax received widespread criticism and had limited political support. The policy design process was short, with limited time for deliberation. While providing the required tax revenues for the tax reform of which it was part, it was set at a level too low to reach the political goal of stabilizing carbon emissions. However, over the years, the tax has been redesigned, strengthening its delivery and gradually increasing political support. Discounts for industry motivated by competitiveness concerns have eased opposition, while households have carried the main burden. This has formed the basis for a counter-narrative about distributive impacts, which, however, has not yet succeeded in getting hold politically and only temporarily hindered continued increases in the tax rate. In terms of the four success dimensions in the PPPE assessment framework (programmatic, process, political and endurance), it represents what McConnell (2010) would call a ‘resilient success’—not perfect but a policy successful to a second-best degree. This chapter tells the story of how a highly energy dependent and export-oriented Nordic country came to introduce this novel policy so early on, and how a policy that initially was not seen as a success, over time came to be taken for granted.