Fiscal Policies for Achieving Finland’s Emission Neutrality Target

Author/Editor:

Ian Parry ; Philippe Wingender

Publication Date:

June 25, 2021

Electronic Access:

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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.

Series:

Working Paper No. 2021/171

Frequency:

regular

English

Publication Date:

June 25, 2021

ISBN/ISSN:

9781513585543/1018-5941

Stock No:

WPIEA2021171

Pages:

48

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