Norwegian commission proposes $49/t carbon tax for non-ETS sectors

Published 18:33 on December 10, 2015  /  Last updated at 18:33 on December 10, 2015  /  Carbon Taxes, EMEA  /  No Comments

A government-appointed green tax commission this week recommended Norway impose a 420 NOK ($48.70, €44.37) per tonne of CO2 from non-ETS sectors from next year, though the proposal has been met with criticism from one of the ruling coaltion parties as well as opposition MPs and green groups.

A government-appointed green tax commission this week recommended Norway impose a 420 NOK ($48.70, €44.37) per tonne of CO2 from non-ETS sectors from next year, though the proposal has been met with criticism from one of the ruling coaltion parties as well as opposition MPs and green groups.

The commission submitted over 80 proposals on how the government could make its tax and levy systems more efficient in reducing greenhouse gas emissions and limiting environmental damage.

The main proposal was the recommendation to impose a 420 NOK carbon tax on each tonne of CO2 released by sectors not covered by Norway’s emissions trading scheme, which is integrated into the European market.

According to the commission, that would match the cost of emission cuts from non-ETS sectors in the EU from 2020.

But the commission also released a series of other recommendations, including for the transport sector and agriculture, among which were ideas to increase levies on light vehicles and transport fuel, and cutting subsidies given for the production of red meat.

“Several of the existing environmental levies should be adjusted and some new ones introduced. We are also proposing removing several support arrangements that have a negative environmental impact,” said Lars-Erik Borge, a professor at the Norwegian University of Science and Technology who chaired the commission.

The commission report will be out to public consultation for three months, but initial reactions were lukewarm.

“(We) oppose many of these proposals. Norwegian vehicle levies are already very high. (We) cannot be part of increasing them further. Our goal is to reduce levies. But we can discuss changes that make the overall levies involved with owning a car go down,” Hans Andreas Limi with the Progress Party, the right-wing government coalition partner, told business daily Dagens Næringsliv.

Meanwhile, Terje Breivik with the Liberal Party, one of the parties whose support the coalition government relies on, told news agency NTB the commission was wrong to propose taxing electric cars and petrol-powered cars equally.

Several green groups argued a carbon tax should also be imposed on the ETS sectors, because the price they pay for emissions under the EU emissions trading system is too low.

By Stian Reklev – stian@carbon-pulse.com

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