{"id":240,"date":"2013-02-07T00:08:41","date_gmt":"2013-02-07T07:08:41","guid":{"rendered":"https:\/\/blogs.ubc.ca\/rosonluo\/?p=240"},"modified":"2013-04-11T12:09:05","modified_gmt":"2013-04-11T19:09:05","slug":"finlands-carbon-tax-system","status":"publish","type":"post","link":"https:\/\/blogs.ubc.ca\/rosonluo\/2013\/02\/07\/finlands-carbon-tax-system\/","title":{"rendered":"Carbon Tax System in Finland"},"content":{"rendered":"

Quick Facts<\/h1>\n

Finland was the first country to introduce carbon tax as an instrument for climate change mitigation. \u00a0The carbon tax was put into effect in January, 1990 in Finland, where they\u00a0only contributed 0.3% to the worlds CO2 emissions1<\/a><\/sup>; the tax was based on the carbon content of the fossil fuels and charged at\u00a0\u00a0\u20ac1.12 per tonne of CO2 ($1.51 CAD, using today’s exchange rate) when it was first started. The carbon tax was reformed in 1997 and 2011. Now, it’s evolved into a combined tax of carbon and energy tax charging\u00a0\u20ac18.05 per tonne of CO2($32.82 CAD) and \u20ac66.2 per tonne of carbon ($89.08 CAD)2<\/a><\/sup>. In 2010, Finland’s CO2 emissions was ranked 59th among the countries in the world3<\/a><\/sup>. \u00a0Below is an overall picture of the current effective carbon tax rates among\u00a0countries (the list is not\u00a0exhausted but it gives you the significant ones). Finland’s is ranked 15th. To make a\u00a0comparison with\u00a0the countries we are more familiar\u00a0with, Canada and the US are ranked 32th and 33th respectively in the world’s effective carbon tax rates. In 2010, their CO2 emissions were ranked 2nd and 9th in the world 3<\/a><\/sup>and there is probably no significant change in these 2 years considering the level of effort each has been putting in.\u00a0<\/span><\/p>\n

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\"Carbon<\/a><\/p>\n

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However, in terms of per capita greenhouse gas emissions and energy consumption, Finland was ranked among the highest countries in 2010 which is illustrated in the greenhouse gas emissions “report card”4<\/a><\/sup> below.<\/p>\n

\"Per<\/a><\/p>\n

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Origin & Goals<\/h1>\n

Let’s now take a step back. How was the carbon tax originated?<\/p>\n

More than 20 years ago, climate change already caught the global attention. \u00a0The first world climate conference was held at\u00a0February\u00a01978 in Geneva, where climate topics were identified, \u00a0studies and research on climate change were initiated. \u00a0Since then, the sustainable development issues have started to influence the policy-making in Finland5<\/a><\/sup>. \u00a0Also, it was foreseeable that the world would need to join in dealing with the climate change. It would allow a competitive advantage to start first even though the costs would be relatively higher due to the lack of experience.<\/p>\n

The purpose of the carbon tax is to curb the emissions of greenhouse gases primarily CO2. \u00a0CO2 can remain in the\u00a0atmosphere\u00a0for 100 years; it\u00a0absorbs heat rays (infrared radiation). With massive amount of CO2, it results in global warming and initiates anomalies\u00a0in the ecosystem threatening the living beings. \u00a0The carbon tax is to create an incentive for reducing CO2 emitting human activities, from something small and everyone can do like the use of vehicles, to something big but not unattainable like adopting a cleaner technology in production.<\/p>\n

Again, the carbon tax is based on the carbon content in the fossil\u00a0fuels.\u00a0The carbon content in every form of fossil fuels is precisely known, so is the amount of CO2\u00a0released\u00a0into the atmosphere when the fuel is burned. \u00a0This is an important and necessary prerequisite for carbon tax to work because the\u00a0measurement of the quantity of \u00a0pollution\u00a0is based on it. As Dr. Ron Wasik said, “If you can’t measure it, you can’t control it.”\u00a0Only with the accurate measurement can the efficiency and equity of carbon tax itself be ensured.<\/p>\n

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Coverage<\/h1>\n

When the tax was first initiated in Finland in 1990, there were few exemptions for specific fuels and sectors.<\/p>\n