Carbon Tax: A Norwegian Case Study Since 1991

Norway's carbon emissions have increased 15% since imposing a carbon tax in 1991, unlike neighbor's Sweden and Denmark where emissions decreased with their carbon taxes. Unlike the oil industry which became carbon-lean, Norway's drivers didn't change
October 1, 2008, 12pm PDT | Irvin Dawid
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"In 1991, Norway became one of the first countries in the world to impose a stiff tax on harmful greenhouse gas emissions. Since then, the country's emissions should have dropped. Instead, they have risen by 15%."

However, considering that economic growth has grown 70% while GHG emissions rose only 15% since 1990, the carbon tax has proven effective.

As a result of carbon sequestration in the North Sea, Norway's oil industry, measured in CO2 emissions per ton of oil and gas extracted, is 39% the industry average.

The real failure has been in transportation. "Norwegians are used to paying high prices at the pump: a gallon of gasoline costs around $9 to $10, and about 6% of the price comes from the carbon tax. Yet since two-thirds of Norwegians live in the countryside, they pay up and keep driving."

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Published on Tuesday, September 30, 2008 in The Wall Street Journal
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