Borg ponders fuel tax hike

Sweden's finance minister Anders Borg has said that he will consider raising taxes on petrol and diesel following the third report from the UN's Intergovernmental Panel on Climate Change (IPCC).

The report, which was presented in Bangkok on Friday, outlined ways of mitigating against the effects of climate change in the short, medium and long term.

Asked whether this meant Sweden could now expect an increase in environmental taxes and new emissions charges, Anders Borg told Dagens Nyheter that the finance department was looking into the options.

“You shouldn’t immediately assume from this and the other reports that we will now raise the taxes on vehicles and fuel. But we have to ask ourselves if we have applied the maximum impact onto the emission of carbon dioxide,” he said.

“I don’t think so. I think that we can reform taxes so that we get a greater environmental effect within the same system.”

The finance minister told DN that the most effective method is to tax carbon dioxide as close to the source of its emission as possible. His department will now analyse whether that means that petrol and diesel should be taxed more heavily.

“The general point is that the tax should have as great an effect on the environment as possible but with as little distortion as possible,” said Anders Borg.