Carbon tax and energy innovation at crossroads of carbon neutrality: Designing a sustainable decarbonization policy
Abstract
Decarbonation has been a primary policy prerogative for Sweden, and carbon tax has been a primary policy instrument in this pursuit, and the revenue generated out of carbon tax has been a driver for energy innovation. However, the benefits of energy innovation have not been experienced across various sectors in Swedish economy, and it might be anticipated that the potential aim of achieving carbon neutrality might not be accomplished to the fullest. Hence, being faced with the need of policy realignment for Sweden, this study has made an attempt to discover the dynamics between carbon tax revenue and energy innovation over a period of 1990-2019, following Quantile-on-Quantile Regression framework. The results obtained from the study show that the impact of carbon tax revenue on energy innovation might turn out to be ineffective beyond a certain threshold limit. A similar pattern has also been observed for the impact of energy innovation on carbon tax revenue. This study gives an indication that there might be a non-linear association between both these model parameters. The study outcomes have paved a way to design a policy framework for helping Swedish economy to attain the objectives of Sustainable Development Goals, while paving the ways to achieve carbon neutrality.
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Some Nordic countries have developed and implemented Pigouvian tax mechanisms to help achieve carbon neutrality through tax policies.
“In addition to this, in their study, Cheng et al. pointed out that some Nordic countries have developed and implemented Pigouvian tax mechanisms to help achieve carbon neutrality through tax policies (Cheng et al. 2021).”
From Strategies to achieve a carbon neutral society: a review (2022) · cites this paper as Cheng et al. 2021
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Strategies to achieve a carbon neutral society: a review
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- Authors
- Cheng, Y., Sinha, A., Ghosh, V., Sengupta, T., & Luo, H.
- Affiliations
- Sichuan Agricultural University (CN)
- Corresponding author
- Luo, Huawei
- Venue
- Journal of Environmental Management
- Publisher
- Elsevier BV
- Published
- 2021-09
- Volume
- 294
- Pages
- 112957
- ISSN
- 0301-4797 (ISSN-L)
- OpenAlex
- W3170745021
- Cited by
- 177
- References
- 54
- Citations by year
- 2026: 15 · 2025: 33 · 2024: 33 · 2023: 42 · 2022: 35 · 2021: 19
- FWCI
- 24.63
- Type
- journal article
- Language
- en
- Open access
- closed
- Licence
- Locations
- Journal of Environmental Management (publishedVersion)
- PubMed (publishedVersion)
- Funders
- Chinese National Funding of Social Sciences
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Energy, Environment, Economic Growth
- Physical Sciences › Energy › Renewable Energy, Sustainability and the Environment › Energy, Environment, and Transportation Policies
- Keywords
- carbon tax, energy innovation, carbon neutrality, decarbonization policy, carbon tax revenue, nonlinear relationship, threshold effects, Sustainable Development Goals
- MeSH terms
- Carbon, Social Conditions, Sweden, Taxes, Policy
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