Scandinavian countries prove that a carbon tax can work

Published: September 29, 2008 2:34 a.m.

Last modified: September 29, 2008 2:38 a.m.

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Scandinavia is cold enough to grow a Mats Sundin. Yet nowadays nearly everyone in the hockey hero’s native Sweden keeps warm in winter without burning so much as a drop of oil.

Such are the spoils of the Nordic energy paradox, where a generation of pragmatic energy policy is putting paid to the notion that life cannot prosper on a lower-carbon diet.

For those who would have their cake and eat it, too, look to Sweden, where the raw data is to be envied: Between 1990 and 2006, the country enjoyed economic growth of 44 per cent in fixed prices, even as it cut carbon emissions by 9 per cent.

Denmark’s numbers show a similar decoupling of GDP from the use of fossil fuels, with 43 per cent growth contrasting with a 14 per cent carbon reduction in the same time frame.

The shift was driven by a complex array of policies. But at its root, experts say, was the world’s first carbon tax on fossil fuels — an early version of the so-called green shift now under discussion in Canada.

“We are living proof the world should not fear a tax on carbon. Sweden has the highest carbon taxation in the world but we are not living in the Stone Age,” said Per Rosenqvist, a climate expert with the Swedish Environment Ministry

“The standard of life here has improved even as emissions came down. It hasn’t been easy. It takes a range of policies, not just a tax. The solutions are different in every country. And they need to be regularly readjusted, as we learn from our mistakes. But it works.”

It is almost required, when writing about Scandinavian energy policy, to wax breathless about enlightened nations who put the planet uppermost on their national agendas.

Yet the reality is something somewhat less angelic. The Danish and Swedish models are driven as much by hard-nosed pragmatism as anything else. Enlightened? Absolutely. Daring? That, too. But the imperative, as with any nation, was self-interest, first and foremost.