Flexible Carbon Tax Policy in Sweden

A carbon tax is considered a significant force behind the increased use of bioenergy in Sweden, which includes CHP from biomass (Andersson 2015; Ericsson 2009; Johansson 2000). Sweden’s carbon tax has increased from USD 44 per metric ton of carbon dioxide when first applied in 1991, (Sumner, Bird and Smith 2009) to USD 168 per metric ton of carbon dioxide in 2014, the highest globally (World Bank, n.d.). Sweden has simultaneously experienced strong growth in GDP and decreased emissions (Nordic Council of Ministers, n.d.). While the carbon tax complements an existing energy tax (Sumner, Bird, and Smith 2009), analysis indicates that carbon tax increased bioenergy use (Johansson 2000).