2019/11/01 by Julius Andersson · 500 citations
Energy · Economics, Econometrics and Finance · Engineering · Chemistry · Mathematics · #Energy, Environment, and Transportation Policies #Climate Change Policy and Economics #Vehicle emissions and performance #Economics #Carbon tax #Greenhouse gas #Elasticity (physics) #Gasoline #Price elasticity of demand #Carbon dioxide #Carbon fibers #Tax deferral #Natural resource economics #Monetary economics #Econometrics #Public economics #Tax reform #Microeconomics #Chemistry #Mathematics #State income tax
paper · pdf · doi:10.1257/pol.20170144
published in American Economic Journal Economic Policy 11(4), 1-30 (American Economic Association)
openalex publication_date 2019/11/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
This quasi-experimental study is the first to find a significant causal effect of carbon taxes on emissions, empirically analyzing the implementation of a carbon tax and a value-added tax on transport fuel in Sweden. After implementation, carbon dioxide emissions from transport declined almost 11 percent, with the largest share due to the carbon tax alone, relative to a synthetic control unit constructed from a comparable group of OECD countries. Furthermore, the carbon tax elasticity of demand for gasoline is three times larger than the price elasticity. Policy evaluations of carbon taxes, using price elasticities to simulate emission reductions, may thus significantly underestimate their true effect. (JEL H23, L91, Q54, Q58)