A carbon tax is basically tax on burning fossil fuels that contain high percentages of carbon. In a more technical term, it is a fee that a government imposes on any company that burns fossil fuels. This is imposed so as to reflect the true cost of burning carbon and effectively control it.
Sweden implemented the world’s first carbon tax in 1991. It is calculated based on the estimated amount of CO2 emissions caused by the combustion of fossil fuels.
Some numbers: –
- In 1991, the carbon tax stood at about $26/ton of CO2 burned.
- In 2020, the carbon tax rate was about $126 per metric ton of CO2.
- Between 1990 and 2018, Sweden decreased its greenhouse gas emissions by 27%.
- In 2019, Sweden’s carbon tax raised about $2.3 billion, making 1% of total tax revenues.
- The Swedish carbon tax covers approximately 40 percent of Sweden’s greenhouse gases.