Even though economic instruments for sustainability purposes have long been implemented in the national policies across the Nordics, their effectiveness remains understudied. This project evaluates the effectiveness of environmental taxes and charges in shifting behaviours of consumers and producers towards a more sustainable direction in the Nordic countries.
This project, funded by the Nordic Council of Ministers Green Charges, evaluates the effectiveness of environmental taxes and charges in shifting the behaviour of consumers and producers towards a more sustainable direction across the Nordic Countries.
Challenges that affect us all
Economic instruments used to enhance the sustainability landscape, including environmental taxes and charges, have long been integrated into national policies across the Nordics. Sweden was notably the first country to introduce a carbon tax in 1991. However, despite the well-intentioned implementation of these measures, their effectiveness in influencing market behaviour and reducing environmental impact remains underexplored in the region. For Nordic policymakers, such limited understanding potentially affects their ability to design and implement measures that successfully drive environmental improvements at the required scale.
Our failure to align economic incentives with environmental sustainability reflects deeper issues such as short-term economic thinking, resistance to behavioural change, and the complexity of transitioning to a low-carbon economy. All of these challenges undermine the social and ecological stability necessary for individuals to live good lives, businesses to operate securely, and states to govern effectively.
To achieve long-term societal transformation towards a more sustainable and resilient future, it’s vital to identify and address these issues.
The intervention we need to take
This project presents a viable route to driving change by helping to understand which factors drive or impede the success of the mentioned economic instruments. By doing so, the project directly addresses the challenge of aligning economic incentives with environmental objectives. It also equips policymakers with evidence-based insights to develop strategies that can lead to meaningful and sustained societal transformation.
To ensure holistic and comprehensive analysis, the project employs methodologies including systematic literature reviews, national policy analysis, and comparative policy analysis.
Main objectives
The project aims to analyse the effectiveness of various green charges implemented in Nordic countries to influence market behaviour and reduce environmental impact. It will examine cases where these charges have or have not led to significant changes in market volume. The ultimate goal is to support refining and improving policy measures for better sustainability outcomes.
Consortium members
The consortium includes Norion Consult (leading the consortium), Anthesis, Menon Economics, and Demos Helsinki. Each organization will analyse economic instrument use cases in a specific Nordic country: Denmark, Sweden, Norway, and Finland, respectively. All partners will contribute to the overall literature review and comparative policy analysis.
The project is expected to end by December 2024.
Want to know more about this project? Get in touch:
Theo Cox
Senior Expert
theo.cox@demoshelsinki.fi
Feature Image: Pixabay/Pexel
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