Carbon-dioxide and energy taxes on manufacturing industry - there is a need for a global approach

The problems caused by carbon-dioxide emissions are global. There is a widespread consensus that global environmental problems must be attacked through international cooperation and policy harmonisation. In countries with high energy taxes, the tax costs negatively affect international competitiveness of energy intensive industries. Highly energy efficient industries in these countries may lose production to less efficient competitors elsewhere, resulting in a global emissions increase. So far, there has been very little international cooperation in the tax field. Without internationally binding agreements, international competition among industries risks being distorted by energy taxes, with small or even negative environmental effects. The global environmental goals for which the taxes were established will then not be achieved. Developments in Sweden, which applies very high energy taxes on manufacturing, provide an example.