LEVYING taxes for the protection of
environment has done wonders for
Sweden. Green taxes have led to a sharp
decline in acid rain, encouraged power
stations to burn less fossil fuels and cut
diesel emissions. These results have
been highlighted in a detailed evaluation
of the country's environmental taxes,
which were introduced from 1984
onwards. The study was recently
released by Sweden's Environmental
Protection Agency.
The study says that taxes on sulphur
dioxide emissions reduced acid rain
between 1989 and 1995 by up to 30 per
cent. The taxes prompted power generation companies to invest in desulphuriation equipment and buy fuel oil that
contains less sulphur. According to
David Pearce, an environmental economist, the success of the Swedish tax
experiment Les in the recycling of green
taxes. The revenues from the taxes were
not simply used to fin government coffers
but were recycled directly back into
subsidies for green investments. For
instance, the sulphur tax revenues help
to pay for desulphurisation equipment.
"I think we could learn a lot from what
Sweden has achieved," says Pearce.
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