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Sweden's carbon tax and Washington's I-732

Washington’s Carbon Tax Swap and Sweden’s Success

Sweden implemented a carbon tax in 1991 and it has many similarities with I-732.

  • Started at a relatively modest level, increased over time and is currently the highest in the world at around $130 (117 euro).
  • In turn reduced other taxes and increased tax deductions for low and middle income households. Turns out not even Swedes love paying more taxes and prefer a tax swap.
  • Was part of a broader set of energy and carbon policies. Much as I-732 is not the only policy needed to reduce carbon emissions.

Sweden’s experience has been generally very positive and is captured in this presentation that was shared with a delegation from Seattle in 2013. In summary, Sweden has seen reduced CO2 emissions while enjoying strong BNP growth (-20% and 59% respectively from 1990 to 2012).

Sweden's Clean Energy, I-732 Washington Carbon Tax Swap

Chart of Sweden's real GDP CO2 emissions