Environmental taxation for good and for bad: the efficiency and legitimacy of Sweden's carbon tax

The apparent unpopularity of the Swedish carbon tax on fuels for passenger cars is examined in relation to alternative climate policy measures to decrease carbon emissions from private transport. Using original survey data, it is found that the carbon tax may not be as unpopular as is typically conjectured. Differently put, its (un)popularity is partly determined by how it is framed in today's debate on how society should combat climate change. It is also found that since the total social cost of combating climate change may actually increase as a result of replacing the carbon tax with alternatives, e.g. subsidised green fuels and expanded public transportation, there is a rationale for informing the public about the costs of those policy alternatives. If it is desirable to implement environmental taxes or to increase existing ones, they should perhaps be framed differently than they are today. One suggestion is to present the taxes in relation to the alternatives, where the means to finance them are given along with comparisons of both their likely effects on emissions and their private and social costs.