Carbon tax costlier for people than industry

2:30 min

According to a new report from the Swedish National Audit Office, Swedish households pay much more in energy and carbon dioxide taxes than industry.

Each household pays 20 times more for every ton of carbon dioxide they produce compared to businesses.

The climate taxes are supposed to be an incentive for households and companies to reduce their carbon dioxide emissions.

But according to the National Audit Office report, the household's share of emissions only represents 20 percent of the total amount – but private homes still pay half of the national carbon tax bill.

The EU estimates the emission levels for each European country, and then industry is given trading rights. In turn those contracts can be sold on the market for profit.

And in Sweden, the government gives the emission credits to corporations for free.

Tax exemptions for businesses are partly responsible for the differences, but the main reason is the EU trading system.

"It is not frequent in other EU countries to hand out the emission trading rights for free," said Sweden's Auditor General Claes Norgren.

Some say that companies would move abroad if they were taxed too high. But Claes Norgren and his colleagues did not find any evidence substantiating that claim in their report.

"What we have found in our report is that there are no investigations of how big this effect is," he told Radio Sweden.

"And we also think that that is one of the shortcomings in the follow-up of how things work."