This report has been commissioned by the Nordic Working Group for Environment and Economics (NME). The report has been prepared by a consortium led by Norion Consult in cooperation with Anthesis AB, Demos Helsinki and Menon Economics.
NME has in several earlier projects engaged in analysing different aspects of using economic instruments in environmental policy. This project could be seen as a follow-up of earlier work done in this field. The time is ripe to make an assessment of what has been achieved with economic instruments in the environmental policy field. The report presents the findings of the impact of selected green taxes and charges in the Nordic countries — Denmark, Finland, Norway, and Sweden. The analysis focuses on whether the charge has had the desired effect on market behavior and the reasons behind it. The analysis highlights that green charges often fall short of optimal levels needed to fully internalise environmental costs.
The report concludes with a set of recommendations. The research consortium behind the report recommends an extended use of economic instruments, based on a careful design of the individual taxes or charges. More impact assessments of the effectiveness of the instruments are also needed to mention some of the recommendations.
Members of the Nordic Working Group for Environment and Economy have provided comments and inputs to the report during the work. The authors of the report are responsible for the content as well as the assessments and recommendations, which do not necessarily reflect the views and the positions of the governments in the Nordic countries. The report constitutes an important contribution to the debate on economic instruments in environmental policy in a time when these instruments phase growing resistance from politicians and decision-makers.
January 2025
Magnus Cederlöf
Chair of the Nordic Working Group for Environment and Economics