On October 3-4th, the Swedish Ministry of Finance hosted a workshop on carbon taxation with participants from a large number of finance ministries in countries that have, or are considering implementing a carbon tax. The workshop was held within the framework of the Coalition of Finance Ministers for Climate Action, a new coalition launched in April 2019 aimed at boosting collective action on climate change. The topic of the workshop was to address key questions that arise when considering carbon taxation, and to increase the understanding of how an efficient carbon tax can work in different national contexts. The workshop was inaugurated by Magdalena Andersson, Swedish Minister of Finance who emphasized that the time is ripe for this initiative and that this Swedish initiative has already led to participation in the coalition by more than thirty countries across the World. Find the Ministry of Finance’s press release here.
Thomas Sterner contributed with a lecture on the need for complementary policy measures to enhance the impact of carbon taxation. Thomas spoke of how carbon taxes can be efficient tools to reduce emissions, but for the tax to reach its full potential, policymakers need to consider the context in which the tax is implemented and to complement it with additional measures to improve the effectiveness and acceptance. In addition to creating a better understanding of how to design optimal carbon taxes, the workshop also presented an opportunity to spread the word about the initiative on carbon pricing in developing countries taken by Thomas and the EfD. Many of the participants from low and middle-income countries expressed an interest in the EfD’s work on carbon taxes, which will be one of the highlights at the EfD’s annual meeting in Bogotá in November.