IMF Working Papers

Fiscal Policies for Achieving Finland’s Emission Neutrality Target

By Ian W.H. Parry, Philippe Wingender

June 25, 2021

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Ian W.H. Parry, and Philippe Wingender. Fiscal Policies for Achieving Finland’s Emission Neutrality Target, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Finland has pledged to cut net greenhouse gas emissions to zero by 2035 and has sectoral targets for deploying electric vehicles, phasing out coal generation, and oil-based space heating. Fiscal policies at the national and sectoral level could play a critical role in achieving these objectives. Carbon dioxide emissions are already priced significantly in Finland but prices vary substantially across fuels and sectors. The paper discusses a reform to both scale up, and progressively harmonize, pricing while using revenues to address equity issues. It also discusses the potential use of revenue-neutral feebate schemes to strengthen mitigation incentives for the transportation, industry, building, forestry, and agricultural sectors.

Subject: Carbon tax, Energy prices, Environment, Greenhouse gas emissions, Non-renewable resources, Prices, Taxes

Keywords: Carbon dioxide emission, Carbon pricing scheme, Carbon tax, Comparing emission reduction, Emission rate, Emission target, Energy prices, Global, Greenhouse gas emissions, Neutrality target, Non-renewable resources

Publication Details

  • Pages:

    48

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2021/171

  • Stock No:

    WPIEA2021171

  • ISBN:

    9781513585543

  • ISSN:

    1018-5941

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