Evaluating Carbon Tax Impact for Japan's Institute of Energy Economics

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Ahead of the introduction of Japan’s carbon tax, the country’s Institute of Energy Economics asked Anthesis to evaluate Sweden’s experience of taxing carbon.

In light of its new carbon dioxide tax, Japan wanted to understand how it should be designed and its potential impact.


Sweden was one of the first countries to introduce a carbon tax, leading emissions to drop by 26 percent. Therefore, Sweden’s carbon tax formed an exemplary model for research.

As part of Anthesis’ analysis of the Swedish carbon tax, we undertook a detailed literature review of over 60 documents and arranged interviews with five key experts.

Our research looked into four aspects of Sweden’s carbon tax:

  • A description of the tax, how it is collected and how much revenues it generates to the government.
  • The political process before, during and after implementation of the tax.
  • How the tax has performed with regards to emission reduction, consequences for the industry, cost effectiveness, public acceptance of the tax, and how it relates to other policy instruments aimed at climate change.
  • Whether there exist any possibilities to improve the tax.


Our findings were presented to the Institute of Energy Efficiency, Japan, as a 35-page report and concluded that not only is a carbon tax is cost-effective, but also boosts the success of other climate policy instruments.

In Sweden, it worked particularly well as part of a wider tax reform, and was introduced at a low level and gradually increased so households and companies could adjust. It also benefited from widespread acceptance among the public to introduce climate-oriented policy instruments.

Some minor improvements could be made, such as better transparency about future changes and removal of tax exemptions. But overall, the tax is one of the more efficient policy instruments aimed at reducing greenhouse gas emissions.