www.ees.uni.opole.pl ISSN paper version 1642-2597 ISSN electronic version 2081-8319 Economic and Environmental Studies Vol.

10, No. 3 (15/2010),255-269., Sept. 2010

Environmentally motivated energy taxes in Scandinavian countries

Micha PTAK Wrocaw University of Economics, Poland
Abstract: The article contains a review of energy taxes used in four Northern European countries (Denmark, Finland, Norway and Sweden) since the 1990s2000s. These countries pioneered the introduction of carbon taxes. Some of these taxes were used as parts of national environmental tax reforms. The author discusses environmental considerations in carbon-energy taxation schemes in the Nordic countries. Attention is also paid to the problem of simultaneous use of different climate policy instruments: energy taxes and the emissions trading scheme.

Keywords: environmental protection, energy taxes, Nordic countries, environmental tax reform

1. Introduction Environmental taxes are economic instruments for environmental protection providing financial incentives for economic actors to improve their environmental performance (Speck et al., 2006: 19). Economic instruments, in particular environmental taxes, have the potential to minimize the social cost of achieving environmental policy objectives (Wallart, 1999: 19). Another advantage of these instruments is that they provide ongoing incentives for innovation in pollution control. Green taxes are raised from various products or activities that are harmful to the environment (Buckley, 2003: 152). The most significant environmental taxes, in terms of generated revenue, are energy taxes. They are levied on energy products for transport purposes (motor fuels) and on energy products for domestic and industrial use (Eurostat, 2008: 408).

Correspondence Address: Micha Ptak, Wrocaw University of Economics, Faculty of Regional Economics and Tourism in Jelenia Gra, ul. Nowowiejska 3, 58-500, Jelenia Gra, Poland. E-mail: michal.ptak@ue.wroc.pl

2010 Opole University

Micha PTAK All European countries use taxes (in particular excise duties) on various energy products. Normally, the main purpose of these taxes is to generate revenue for the public sector. At the same time, such energy taxes (due to relatively high rates) have some incentive effects, for example encouraging the rational use of fossil fuels. Energy taxation schemes may be designed more explicitly to achieve environmental policy objectives. Such environmentally-motivated energy taxation schemes exist in particular in Northern European countries such as Denmark, Finland, Norway and Sweden. It is interesting, that the Nordic countries use revenues from energy taxes to reduce other taxes. Thus, energy taxes are components of environmental tax reforms which involve partial replacement of traditional taxes by taxes with the objective of improving the state of the environment (Wallart, 1999: 147). According to the double dividend hypothesis such reforms could not only improve the quality of the environment but also improve the functioning of the economy as a whole, in particularly leading to an increase in employment (European Environmental Agency, 2005: 83-84). The aim of the article is to present energy taxation schemes in the four Northern European countries: Denmark, Finland, Norway and Sweden. The paper focuses on environmental considerations in these taxes and experience in environmental tax reforms. Attention is also paid to the issue of simultaneous use of two economic instruments addressing the same environmental problems: energy taxes and the European Union Emissions Trading Scheme. The Nordic countries avoided overlapping use of these instruments by reducing taxes for emission sources that are included in the trading system (Lindhjem et al., 2009: 140). Experience with energy taxes and environmental tax reforms in the Northern European countries is of interest in Poland and other European countries. The experience may be used in reforming national energy tax systems in order, e.g., to tackle climate change and air pollution.

2. Overall characteristics of energy taxation schemes in the Nordic countries Table 1 presents information about energy tax revenues in the four analyzed countries in 2008 as well as indicators of the significance of the energy taxes. The data provided by the Eurostat shows that Denmark and Sweden had the highest share of energy taxes in GDP. Denmarks and Swedens ratios quite significantly exceeded the EU-27 average (1.8%). The highest shares of energy taxes in the total tax revenues are also found in those two countries.

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ENVIRONMENTALLY MOTIVATED ENERGY TAXES IN SCANDINAVIAN COUNTRIES However, all of the four Nordic countries display a substantially lower share of energy taxes in the total tax revenues than certain Central and Eastern European countries (inter alia Poland)1.
Table 1. Energy tax revenues, final energy consumption and the implicit tax rate on energy in Denmark, Finland, Norway and Sweden (2008) Specification Denmark Finland Norway Sweden Energy tax revenues (in million of euro) 4923.4 3272.0 3807.4 7189.4 Energy taxes as % of GDP 2.1 1.8 1.2 2.2 Energy taxes as % of total taxation 4.4 4.1 2.9 4.7 Final energy consumption (in thousand tonnes of oil 15545 25878 18894 32836 equivalent) Nominal ITR on energy (in euro per tonne of oil equivalent) 316.7 126.4 201.5 218.9 Real ITR on energy (in euro per tonne of oil equivalent) 267.8 114.5 150.7 190.1 Source: own elaboration based on: Eurostat, 2010: 156-157, 358-359; the Eurostat database, [Online] Available at: http://epp.eurostat.ec.europa.eu/ [Accessed 28 February 2010].

The ratio of energy tax revenue to total taxation may be considered as a kind of indicator of the role of energy taxes in the environmental policy. However, this indicator has in fact quite limited information value and a number of drawbacks. For example, effective energy tax may decrease energy consumption in a given country. In such case, the energy tax revenues may fall (Eurostat, 2007: 112-113). The data on energy tax revenues and final energy consumption allow to calculate an implicit tax rate2 (ITR) on energy (the amount of energy taxes levied per unit of final energy consumption). ITR on energy is more appropriate measure of the significance of energy taxes than the share of energy taxes in the total tax revenues. However, it has also some drawbacks for example, ITR on energy treats equally all kinds of energy consumption, regardless of their environmental impact (Eurostat, 2007: 112-113). The data in Table 1 presents wide differences in the tax revenue raised per unit of energy consumed in analyzed countries. In 2008 Denmark had the highest nominal ITR on energy (based on nominal tax revenues) in the European Union. Denmark levied four times as much revenue per unit of energy than the least taxing EU Member State (Romania) (Eurostat, 2007: 10; 2010: 156). Table 1 shows also the real ITR on energy which differs from the nominal ITR in the sense

In 2008 energy taxes in Poland represented 6.6 percent of the total tax revenues. The high share of excise duties in the total tax burden is treated in the literature as a favorable feature of the Polish tax system (see Samojlik, 2006: 71). 2 Implicit tax rates measure the average effective tax burden related to the potentially taxable base (European Communities, 2007: 62).

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Micha PTAK that the nominal euro amount in the numerator of the ratio is deflated with the cumulative percentage change in the final demand deflator from 2000 (Eurostat, 2009: 366). The energy related taxation systems in the Nordic countries consist of different types of taxes: excise duties, CO2 taxes and other taxes or fees3 (Table 2)4.
Table 2. Tax burden (in euro) on selected energy products in Denmark, Finland, Norway and Sweden (2008) Other taxes Fuel Unit Basic tax CO2 tax Total taxation and fees Denmark Unleaded petrol 1000 l 521.7 30.0 551.7 Diesel oil 1000 l : : 364.7 Light fuel oil 1000 l 253.5 33.1 286.7 Coal and coke 1000 kg 197.9 297.4 495.3 Electricity 1 MWh 78.7 11.8 90.5/81.6 a) Finland Unleaded petrol b) 1000 l 572.2 47.8 7.2c) 627.2 b) Diesel oil 1000 l 306.7 53.8 3.9 c) 364.4 Light fuel oil 1000 l 29.4 54.1 3.9 c) 87.4 Coal and coke 1000 kg 493.2 11.8 c) 505.0 Electricity 1 MWh 2.5/8.7 a) 0.1 d) 2.6/8.8 a) Norway Unleaded petrol 1000 l 563.3 106.7 : : Diesel oil 1000 l 422.3 71.5 : : Light fuel oil 1000 l : 71.5 : : Coal and coke 1000 kg : : : : Electricity 1 MWh : : : 14.1 Sweden Unleaded petrol b) 1000 l 320.9 254.5 575.4 Diesel oil b) 1000 l 138.9 313.6 452.5 Light fuel oil 1000 l 83.1 313.6 396.7 Coal and coke 1000 kg 35.3 272.9 308.2 Electricity 1 MWh 29.4 29.4 a) The second rate applies to non-business use. b) Transportation fuels of the highest environmental class. c) Strategic stockpile fee and oil pollution fee. d) Strategic stockpile fee. Source: own elaboration based on: European Commission, 2008: 1-45; Swedish Tax Agency, 2008: 3-4; Lindhjem, et al., 2009: 25, 27, 40, 42, 64, 66, 70, 84-85; OECD, 2009: 147.

Energy products in all four countries are also subject to sulphur taxes. Those taxes are not included in the study, as the SO2 taxes are treated as pollution taxes rather than energy (product) taxes. 4 Tax rates for given year have been converted to euro using exchange rate as of first working day of October the previous year (according to the Directive 2003/96/EC restructuring the Community framework for the taxation of energy products and electricity). However, tax rates for the year 2003 and earlier years have been converted to euro using annual average exchange rates. The sources of the exchange rates are: Official Journal of the European Union and the Eurostat database.

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ENVIRONMENTALLY MOTIVATED ENERGY TAXES IN SCANDINAVIAN COUNTRIES Excise duties on energy (basic taxes) can be treated as traditional taxes which are primarily aimed at generating revenue. Such energy taxes (e.g., levied on motor fuels) exist in all European countries. Carbon taxes on energy carriers are levied with the objective of changing environmentally damaging behavior rather than generating revenue (International Energy Agency, 2008: 24). Carbon taxes can be defined as taxes levied in proportion to the carbon content of fossil fuels. Because virtually all of the carbon in fossil fuels is ultimately emitted as CO2, a carbon tax is equivalent to an emission tax (CO2 tax) levied on each unit of CO2-eqivalent emissions (Metz, 2007: 821). Carbon taxes were implemented in the Nordic countries in the period 1990-1992 (Table 3). The main objective of those taxes was to reduce (or stabilize) CO2 emissions (Haugland, 1993: 7; Hoerner and Bosquet, 2001: 22). It is worth noting that the tax rates were not necessarily based on the marginal external cost of CO2 emissions for example in Denmark the tax rate reflected some political and economic considerations (Hoerner and Bosquet, 2001: 11). Table 3 presents evolution of the CO2 tax rates in the four analyzed Nordic countries in recent years. Although the data are not complete, it can be noticed that in Denmark the standard CO2 tax rate of 100 DKK was constant over 13 years (Speck and Jilkova, 2009: 31).

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Table 3. Development of the standard CO2 tax rates in Denmark, Finland, Norway and Sweden in recent years Tax rate (per tonne of CO2) Country Year in national currency in euro Denmark 1992-2004 100 DKK 12.8-13.6 a) 2005 90 DKK 12.1 Finland 1990 6.7 FIM 1.2 1992 . 1.3 1993 14 FIM 2.4 1994 . 3.7 1995 . 6.4 1997 . 11.8 1998 (Jan. 1) 82 FIM 13.8 1998 (Sept. 1) 102 FIM 17.2 2003-2007 18.1 EUR 18.1 2008-2009 20 EUR 20 Norway 1991 97-269 NOK b) 12.1-33.6 b) 2005 171-337 NOK b) 20.5-40.5 b) Sweden 1991-1992 250 SEK 33.2-33.4 1993 320 SEK 35.1 1994-1995 340 SEK 36.4-37.1 a) 1996-2000 370 SEK 41.5-44.0 a) 2001 530 SEK 57.3 2002 630 SEK 68.8 2003 760 SEK 83.3 2004 910 SEK 99,7 2005 920 SEK 101.9 2006 930 SEK 99.9 2007 950 SEK 101.8 a) Depending on the exchange rate. b) The lowest rate applies to heavy fuel oil. The highest rate applies to petrol. Source: own elaboration based on: International Energy Agency, 2008: 24; Grafstrm, 2009: 42; Haugland, 1993: 7, 13-14, 22-24; Hoerner and Bosquet, 2001:17, 25; Lindhjem et al., 2009: 25, 39; Speck, et al. 2006: 62, 64, 100, 170.

All four analyzed Nordic countries have used taxes on electricity for many years (for example, in Norway and Sweden taxes on electricity consumption were introduced in the early 1950s). Currently, under Directive 2003/96/EC electricity taxes must be applied in all EU member states. This Directive also establishes minimum tax rates for electricity and for other energy products (motor fuels, heating oils). It should be noticed, that energy taxes rates in the Nordic countries are usually much higher than the minimum tax levels.

3. Environmental considerations in energy tax schemes All kinds of energy taxes in the Nordic countries strengthen incentives to save energy by increasing the price of fuels. Carbon taxes additionally induce switching to lower-carbon fuels. Environmental policy objectives (such as elimination of polluting emissions, reduction in fossil 260

ENVIRONMENTALLY MOTIVATED ENERGY TAXES IN SCANDINAVIAN COUNTRIES fuel consumption) should also be achieved through tax exemptions or tax differentiations. In 2007 and 2008 such environmentally-motivated provisions in energy taxes included: A lower tax rate on electricity used for space heating in Denmark. The reduced energy tax rate (0.07 euro per KWh5) applies to the share of the consumption above the 4000 kWh (Ministry of Taxation, 2008: 40, 56). This exemption has been existing since 1986. Tax differentiations according to the sulphur content of the fuel or environmental class of the fuel (Finland, Sweden) (European Commission, 2008: 10, 15). It is worth mentioning that in the 1980s fuel taxes were also used to reduce the use of leaded petrol and to give consumers an incentive to choose unleaded petrol (OECD, 2007: 127-128). Total exemption from electricity tax in Sweden for industries participating in the PFE programme for improved energy efficiency. The aim of the programme is that the improvements in energy efficiency should be equivalent to the improvements that would otherwise have been achieved by the minimum levels of taxation prescribed in the 2003/96/EC Directive (Swedish Environmental Protection Agency, 2007: 13)6.

A tax rebate in Denmark for fuels sold from stations with a vapour recovery system (in existence since 1995). The aim of the rebate is to secure the best environmental technology at petrol stations (OECD, 2007: 128).

Exemptions in fuel and electricity taxes for biofuels (used in work machines or in heating) and for electric rail traffic in Finland (Parkkinen, 2008: 3). Electricity tax refunds for wind power stations and for small water power stations in Finland (Parkkinen, 2008: 3). A 50 per cent tax rebate (in CO2 tax) for natural gas in Finland (International Energy Agency, 2007: 24). Reduced electricity tax rates for Norwegian firms in the pulp and paper industry that implemented approved energy-saving measures (Lindhjem et al., 2009: 63-64). A 85 per cent tax rebate (in CO2 tax) for fuels used in production of heat from combined heat and power plants in Sweden (Lindhjem et al., 2009: 82). There are also some tax provisions in the energy taxes used in the Nordic countries which

may be considered as environmentally-harmful. They include tax exemptions and reduced tax
5 6

The basic rate was 0.08 euro per 1 KWh (78.7 euro per MWh). See Art. 17 of the 2003/96/EC Directive.

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Micha PTAK rates for industrial energy users introduced in order to protect their international competitiveness (OECD, 2007: 127). As a result of these provisions, the energy taxes in the Nordic countries are not a cost-effective solution for the problem of pollution from an economic efficiency point of view every agent that causes pollution of the environment should pay the same tax rate. When the tax rates are differentiated, marginal emission reduction costs (so called marginal abatement costs) for each source are not equal. As the cost-effective reduction criterion is not met, the total social cost of achieving the environmental objective is not minimized (Wallart, 1999: 132; Thomas, Callan, 2006: 91-92). Table 4 presents the payable share of CO2 tax in Denmark. As can be sees, the carbon taxation scheme has not been relevant from an environmental point of view, since the heaviest emitters faced the lowest tax rates. The scheme has been introduced to avoid relocation of energy-intensive enterprises (in particular heavy industry) abroad (OECD, 2003: 133).
Table 4. Payable share (%) of CO2 tax in Denmark, 1996-2005 Sector 1996 1997 1998 1998 2000 2001 2002 2003 2004 2005 Households 100 100 100 100 100 100 100 100 100 100 Industry Space heating 100 100 100 100 100 100 100 100 100 100 Light processesa) 50 60 70 80 90 90 90 90 90 100 Without voluntary agreement 50 50 50 58 68 68 68 68 68 76 With voluntary agreement Energy intensive processesb) 5 10 15 20 25 25 25 25 25 28 Without voluntary agreement 3 3 3 3 3 3 3 3 3 3 With voluntary agreement a) Lighting, office machines, etc. b) Processes in energy-intensive enterprises (e.g., energy that is used directly in the production of cement or glass, for the smelting of metals). Source: Hoerner and Bosquet, 2001: 13; OECD, 2007: 199.

The energy tax rates also differ greatly between different consumer groups in other three countries. For example, in Sweden fuels used in some industrial processes are totally exempted from the excise duty (International Energy Agency, 2008: 24). In Finland, there are two rates of CO2 tax on electricity: the mining and manufacturing sector pay more than three times less than other consumers such as households, services and agriculture (Parkkinen, 2009: 16). Electricity used in the industry and mining sector is also subject to reduced tax rates in Norway (Lindhjem et al., 2009: 63). Environmental effectiveness of energy taxation schemes in the Nordic countries (and in other European Union member states) is also limited due to the way in which electricity is taxed. 262

ENVIRONMENTALLY MOTIVATED ENERGY TAXES IN SCANDINAVIAN COUNTRIES Electricity taxes are revenue-raising taxes rather than incentive taxes, as they do not take into account the environmental impact of different methods of electricity generation and different fuels. The taxation of electricity at the end-user level is the option selected under the Directive 2003/96/EC. According to Art. 14 (a) of the Directive, energy products and electricity used to produce electricity are exempted from excise taxation (Speck et al., 2006: 102, 239; Lindhjem et al., 2009: 40-41). There are some estimates of environmental effects of energy taxes used in the Nordic countries. Analysis suggests that taxes havecaused lower energy-related emissions from industry and households (see Vos et al., 1999: 92-93). For example, it has been estimated that carbon dioxide emissions in Sweden in 2000 were at least 5 million tonnes lower than they would have been without higher taxes on energy and CO2 emissions (OECD, 2004: 160). The tax also boosted the use of bioenergy (European Environmental Agency, 2005: 93). The Swedish Institute for Transport and Communications Analysis estimates that tax increases on fuels implemented in the period 1990-2005 have reduced CO2 emissions from transport by 1.5 million tonnes to 3.2 million tonnes of carbon dioxide per year, mainly from passenger cars (The Budget Bill for 2008, 2007: 1). Some of the analyses suggest that the level of CO2 taxes in the Nordic countries is too low to internalize the external costs of emissions and to implement the polluter-pays principle. The authors of 2003 Eurostat report Energy Taxes in the Nordic Countries Does the Polluter Pay? analyzed the ratio CO2 tax revenue to CO2 emissions in Denmark, Finland, Norway and Sweden. Only in Sweden the average tax level (23 euro per tonne CO2) covered the estimated external costs of CO2 emissions (Eurostat, 2003: 7, 24).

4. Energy taxes and the environmental tax reforms in the Nordic countries Denmark, Finland, Norway and Sweden were among the first European countries to implement environmental tax reforms by shifting taxes from labour (personal income or social security contributions) to environmental degradation. Implementation of these reforms (which relied mainly on carbon and energy taxes) began in the early 1990s. Numerous studies were carried out in the Nordic countries to analyze and assess environmental and employment effects of green tax reforms. In the mid 1990s some of these countries (Denmark, Norway and Sweden) established interministerial committees or special commissions to make analyses and 263

Micha PTAK recommendations related to reforms (European Environmental Agency, 2005: 90-91). Simulations carried out by the Norwegian Green Tax Commission suggested, for example, that in long run environmental tax reform may (under certain conditions) generate in Norway positive effect on employment (Majocchi, 2000: 14). Implementations of the environmental tax reform concept (understood as the idea of financing cuts in the labour taxation from increases in environmental taxation) in the analyzed countries is shown in Figure 1. The figure presents changes in the ratio of taxes on labour and all environmental taxes to GDP in 1995-2005. In Denmark and Norway a simultaneous decline in the taxes on labour/GDP ratio and an increase in the environmental taxes/GDP ratio can be observed. Such changes may be considered compatible with the concept of greening the tax system. Another situation occurred in Finland and Sweden where the environmental taxes/GDP ratio decreased slightly.
Figure 1. Change in the ratio of taxes on labour and environmental taxes to GDP in Denmark, Finland, Norway and Sweden, 1995-2005
2 1 0 Denmark -1 -2 -3 -4 -5 Finland Norway Sweden Taxes on Labour/GDP Environmental taxes/GDP

Source: authors own elaboration based on: European Environmental Agency, 2005: 88; Eurostat, 2008: 276, 298; Eurostat, 2009: 294, 316.

Table 5 presents the development of ITR on labour, ITR on energy and energy intensity in the analyzed countries in the years 1996-2006. These data may be used to assess whether the changes in the countrys taxation systems are in line with the concept of environmental tax reform and, to some limited extent, to assess the effects of energy taxes.

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Table 5. Development of ITR on labour, ITR on energy and energy intensity in Denmark, Finland, Norway and Sweden 1996-2006 (index 1996=100)a) Specification 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 102.0 101.5 96.5 94.8 93.3 92.3 92.3 134.5 136.7 139.7 138.8 136.8 130.9 126.5 76.7 78.6 76.8 80.4 76.2 72.6 74.7 97.4 97.4 96.7 93.8 91.6 91.6 91.8 106.7 108.9 109.7 108.7 108.4 109.4 103.3 86.0 85.4 89.2 92.7 90.0 80.9 84.2 : : : 98.3 102.6 79.9 : 100.0 100.8 101.3 : 100.0 95.1 80.8 : 100.0 97.0 97.1 99.5 85.6 92.4 97.9 85.0 86.3 Denmark ITR on labour 100.0 101.2 96.8 100.0 Real ITR on energy 100.0 100.2 113.3 129.2 Energy intensity of the economy 100.0 90.6 86.5 81.6 Finland ITR on labour 100.0 96.2 96.7 95.6 Real ITR on energy 100.0 109.6 106.2 111.7 Energy intensity of the economy 100.0 99.8 96.4 91.3 Norway ITR on labour : : : : Real ITR on energy : : : : Energy intensity of the economy : : : : Sweden ITR on labour 100.0 100.8 102.9 101.0 Real ITR on energy 100.0 98.0 100.5 102.8 Energy intensity of the economy 100.0 95.2 92.5 87.8 a) For Norway: 2002-2006 (index 2002=100)a)

96.3 93.3 93.1 93.1 93.8 92.7 99.6 105.4 110.0 112.1 111.0 112.3 84.8 82.3 79.9 79.9 76.0 71.0

Source: own elaboration based on: the Eurostat database, [Online] Available at: http://epp.eurostat.ec.europa.eu/ [Accessed 28 February 2010]; Eurostat, 2009: 79, 123.

The most noticeable changes took place in Denmark in 1996-2002. A significant increase in ITR on energy and in energy efficiency maz be observed. The data suggest that taxation may have played a role in stimulating energy conservation, alongside other structural factors and environmental policy instruments (Eurostat, 2009: 123-124). Somewhat similar changes took place in Sweden and Finland. In Norway there was a substantial decrease in the real tax burden on energy (by 15 percent over 5 years). The ITR on labour remained fairly stable in Norway. In the other three countries the tax burden on labour declined in 2006 by around 7-8 per cent (compared to 1996).

5. Energy taxes and the EU Emissions Trading Scheme An important issue in European Union is the problem of overlap between two economic instruments for environmental protection: energy taxes (particularly CO2 taxes) and the EU Emissions Trading Scheme (ETS), through which emitters are able to sell or buy CO2 emission allowances (OECD, 2007: 127). The latter mechanism was launched by the EU member states in January 2005. In 2005 Norway put in place an emissions trading scheme similar to the EU ETS (though it had relatively limited coverage). For the second trading period (2008-2012) the Norwegian system is linked with the EU ETS.

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Micha PTAK The simultaneous use of energy taxes and the EU ETS may create double burden for some industries. Denmark, Norway and Sweden have noticed this problem and have granted some exemptions from carbon taxes to industries included in the emission trading systems. For example, Sweden has reduced CO2 tax (for the use of some fuels) by 85 per cent (Lindhjem et al., 2009: 26, 68, 81-82). Finnish authorities have not made major changes in the carbon taxation system after the launch of the EU Emissions Trading Scheme. However, the government has in turn lowered the electricity tax paid by industry and abolished tax on peat (Lindhjem et al., 2009: 44). It is worth mentioning, that tax exemptions in Denmark and Sweden have been assessed by the European Commission under state aid rules. The reason is that tax exemptions for companies covered by the EU ETS could distort competition. It should be noted that most emission allowances in the this system are currently allocated free of charge. The auctioning of allowances will (progressively) replace free allocation from the start of the third trading period 2013-2020. In 2005 the Danish government set up a special committee to examine how to solve the problem of simultaneous use of the energy taxes and the Emissions Trading Scheme. In March 2007 the committee recommended abolishing the CO2 tax for industries included in the ETS, while introducing a CO2 tax for non-ETS sectors. The tax rate should be equal to the expected allowance price in 2008-2012 (DKK 150 per tonne) (OECD, 2007: 127, 163). This mechanism would treat equally the non-ETS sectors and the ETS sectors. Thus, it would maintain symmetry in the incentives (European Environmental Agency, 2005: 36). The authors of the OECD Report for Finland state that from 2013 on, the CO2 tax in Finland should be progressively abolished for the facilities included in the ETS. The tax should be extended to all sectors outside the EU Emissions Trading Scheme. The rate of the tax should correspond to the price of CO2 allowances (OECD, 2009: 146-147).

6. Concluding remarks Energy taxation systems implemented in the Denmark, Finland, Norway and Sweden consist of different types of energy-related taxes. These system are sometimes considered as rather complicated and not entirely effective in meeting their fiscal and environmental goals

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ENVIRONMENTALLY MOTIVATED ENERGY TAXES IN SCANDINAVIAN COUNTRIES (International Energy Agency, 2006: 46; 2005: 46; 2008: 26; 2007: 127). However, it is very likely that energy taxes have improved energy efficiency and reduced carbon dioxide emissions. All four Nordic countries use various tax exemptions or tax differentiations to achieve environmental policy objectives. There are many special tax provisions for industry introduced to avoid the risk of loss of international competitiveness. These exemptions and reduced tax rates may have a negative impact on the environment. The Nordic countries experience with the use of energy taxes may be very instructive for Poland. The Polish energy taxation scheme consists of excise duty for energy products, fuel charge for motor fuels and air pollution charges, including charge on CO2 emissions (at a rate of around 0.06 euro per tonne of CO2). This system can be expanded by adding a new carbon tax on energy products such as motor fuels and heating fuels. The tax, according to recent trends, would cover non EU-ETS sectors (including households which are generally not subject to emission charges). The rate of the new tax should be reasonably higher than the rate of the currently used charge on CO2 emissions. The environmental tax reform may be seen as an attractive solution for environmental and economic problems. However, introduction of such reform requires a wider analysis taking into account the overall characteristics of the Polish tax system (including the current share of excise duties in the total tax burden).

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System opodatkowania energii wynikajcy z pobudek rodowiskowych w krajachskandynawskich. Streszczenie W artykule omwione zostay podatki energetyczne stosowane w czterech krajach Europy Pnocnej (Danii, Finlandii, Norwegii i Szwecji) w latach dziewidziesitych XX wieku i pierwszej dekadzie obecnego stulecia. Kraje te byy jednymi z pierwszych, w ktrych wprowadzono podatki wglowe (czyli podatki od zawartoci wgla w paliwie lub od emisji 268

ENVIRONMENTALLY MOTIVATED ENERGY TAXES IN SCANDINAVIAN COUNTRIES dwutlenku wgla powstajcych przy wykorzystaniu danego paliwa). Niektre z tych podatkw zostay wykorzystane w ramach ekologicznych reform podatkowych. W artykule omwione zostay proekologiczne rozwizania proekologiczne w konstrukcji podatkw od nonikw energii w krajach nordyckich. Szczegln uwag zwrcono na problem rwnoczesnego stosowania rnych instrumentw polityki zapobiegania zmianom klimatu: podatkw energetycznych i systemu zbywalnych uprawnie emisyjnych. Sowa kluczowe: ochrona rodowiska, podatki energetyczne, kraje nordyckie, ekologiczna reforma podatkowa.

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