Economic Instruments - Charges and taxes

Differential Fuel Taxation - Brief Summary (Sweden)

Differential Fuel Taxation, Sweden

 

 

Achievements

  • Difficult to separate the effects of the differential tax from other measures in place but overall effect has been a success (Swedish Green Tax Commission 1997, pp28)
  • 1986-1992: proportion of leaded fuel on the market fell from 100% to 40% (Barde & Smith, pp25) and ceased to be sold in 1994 (Swedish Green Tax Commission 1997, pp27)
  • Provided incentive to ‘reduce and/or accelerate the reduction of pollution,' (Barde & Smith, pp25)
  • The effectiveness of differential taxation was reinforced by ‘the replacement of leaded fuel for cars that continue to require this type of fuel by a fuel containing an alternative lubricant, sodium,' (EEA 1996, pp55), this fuel took off due to the tax advantage it had over leaded fuel (Swedish Green Tax Commission 1997, pp28)
  • Lead emission fell by approximately 80% between 1988 and 1993 (EEA 1996, pp55)


Introduced

  • Gradual increase in differential between 1986-1992.


Design

  • 1986-1992 tax differential between leaded and unleaded increased from SEK 0.1 to SEK 0.51 (Barde & Smith, pp25)


Related Instruments

  • Operated in conjunction with stricter emissions standards on new cars which could only be met by those cars fitted with catalytic converters and running on unleaded fuel (these standards were voluntary from 1987 and became mandatory in 1989)
  • Plus the government reduced the sale tax on cars purchased in 1987 and 1988 by a sum approximately equal to the cost of fitting catalytic converter in the hope owners would do so (Swedish Green Tax Commission 1997, pp25)


References

Do Economic Instruments Help the Environment?' Barde & Smith, The OECD Observer, No.24, Feb/Mar 1997, pp22-26 http://www.oecd.org//publications/observer/209/ART_IDXE.HTM

Environmental Taxes: Implementation and Environmental Effectiveness (Environmental issues Series No.1), European Environment Agency, Copenhagen 1996, pp53

Taxation, Environment and Employment, A report from the Swedish Green Tax Commission, Ministry of Finance, Stockholm 1997, pp25-28


Information Request

As it is the aim of this website to provide information which is as accurate, comprehensive and up-to-date as possible, please contact us with any additional information or studies on this topic and we will add it to the website.

Email contact: louise.dunne@ucd.ie

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Differential Fuel Taxation, Sweden

 

 

Achievements

  • Difficult to separate the effects of the differential tax from other measures in place but overall effect has been a success (Swedish Green Tax Commission 1997, pp28)
  • 1986-1992: proportion of leaded fuel on the market fell from 100% to 40% (Barde & Smith, pp25) and ceased to be sold in 1994 (Swedish Green Tax Commission 1997, pp27)
  • Provided incentive to ‘reduce and/or accelerate the reduction of pollution,' (Barde & Smith, pp25)
  • The effectiveness of differential taxation was reinforced by ‘the replacement of leaded fuel for cars that continue to require this type of fuel by a fuel containing an alternative lubricant, sodium,' (EEA 1996, pp55), this fuel took off due to the tax advantage it had over leaded fuel (Swedish Green Tax Commission 1997, pp28)
  • Lead emission fell by approximately 80% between 1988 and 1993 (EEA 1996, pp55)


Introduced

  • Gradual increase in differential between 1986-1992.


Design

  • 1986-1992 tax differential between leaded and unleaded increased from SEK 0.1 to SEK 0.51 (Barde & Smith, pp25)


Related Instruments

  • Operated in conjunction with stricter emissions standards on new cars which could only be met by those cars fitted with catalytic converters and running on unleaded fuel (these standards were voluntary from 1987 and became mandatory in 1989)
  • Plus the government reduced the sale tax on cars purchased in 1987 and 1988 by a sum approximately equal to the cost of fitting catalytic converter in the hope owners would do so (Swedish Green Tax Commission 1997, pp25)


References

Do Economic Instruments Help the Environment?' Barde & Smith, The OECD Observer, No.24, Feb/Mar 1997, pp22-26 http://www.oecd.org//publications/observer/209/ART_IDXE.HTM

Environmental Taxes: Implementation and Environmental Effectiveness (Environmental issues Series No.1), European Environment Agency, Copenhagen 1996, pp53

Taxation, Environment and Employment, A report from the Swedish Green Tax Commission, Ministry of Finance, Stockholm 1997, pp25-28


Information Request

As it is the aim of this website to provide information which is as accurate, comprehensive and up-to-date as possible, please contact us with any additional information or studies on this topic and we will add it to the website.

Email contact: louise.dunne@ucd.ie


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