UN Handbook on Carbon Taxation with a Swedish touch


Several employees at the Tax and Customs Department of the Swedish Ministry of Finance have been involved in the elaboration of a new handbook on carbon taxation. The handbook is aimed to inspire more countries to use taxation as an instrument for reducing emissions. The UN Tax Committee launched the handbook on October 25th.

“Many countries agree that putting a price on carbon emissions is one of the key issues if we are to successfully limit global warming to 1.5 degrees Celsius,” says Ingela Willfors at the Tax and Customs Department of the Swedish Ministry of Finance.

The handbook has been prepared under the leadership of the UN Tax Committee, where Ingela Willfors is one of 25 international tax law experts. She came up with the idea of producing a handbook on carbon taxation six years ago. 

“At that time, there was little interest, but in recent years more countries have explored the possibility of introducing a carbon tax. Especially many developing countries that are already experiencing the effects of climate change,” says Ingela.

What makes the handbook unique compared with other publications on environmental taxation is that it focuses on practical issues rather than theoretical models.

“The aim is to provide policy makers and officials at various levels of Government practical guidance and an understanding of the pros and cons   of carbon taxation, regardless of their previous experience of environmental taxation” says Ingela.

Much of the handbook is based on the experiences of the two different approaches to carbon taxation that are being used around the world today. Most countries, including Sweden, tax emissions indirectly via fuel taxation. This is made possible by using average emission factors to set the tax rates. The other approach is to measure, and tax emissions directly, as done in e.g. Chile.

Susanne Åkerfeldt and Karl-Anders Stigzelius, also at the Tax and Customs Department of the Swedish Ministry of Finance, served as experts in the sub-committee and as lead authors of several of the handbook’s central chapters. Both agree that the handbook should not lecture readers.

“It is not possible to copy a tax and introduce it in a new country. Rather, it must be adapted to the conditions of each individual country. We have maintained this perspective throughout our work,” says Susanne.  

Another important part of the work on the handbook was sharing experiences from countries that have already introduced a carbon tax, such as Sweden.

“We have been keen to share the Swedish example – in particular the lesson that designing and administering a carbon tax does not have to be complicated. We also have good experience of how a carbon tax can be designed to reduce the risk of carbon leakage and how it can develop over time,” says Karl-Anders. 

At the same time, Susanne and Karl-Anders emphasise that carbon taxation should not be considered as a silver bullet against the climate challenge.

“A carbon tax could be viewed as the engine for the green transition, but complementary instruments are needed as lubricants for optimal effect,” says Susanne.


About the UN Tax Committee

The Committee of Experts on International Cooperation in Tax Matters UN Tax Committee) is a permanent committee under the UN Economic and Social Council (ECOSOC). The Committee’s mission includes providing practical guidance primarily for developing countries in the field of international taxation. The Committee consists of 25 experts from different countries.

About Sweden’s carbon tax

In 1991, Sweden became one of the first countries in the world to introduce a carbon tax. Today, around30 countries have introduced a carbon tax, and many of them have followed the Swedish model of taxing fuels. The Swedish tax was introduced as part of a major tax reform and was a result of increased interest in environmental issues in Sweden during the 1990s. The Swedish carbon tax has contributed to the almost total phasing out of oil boilers in Swedish homes.