The politics of carbon taxation: how varieties of policy style matter

ABSTRACT

The momentum achieved for unilateral carbon taxes in seven European countries is examined. Why is it that small countries, despite being vulnerable to forces of international competition, have been able to implement carbon taxes? A review of national experiences does not suggest that the share of fossil fuels in the energy mix defines the room for such taxes, or point to a strong role for traditional left-right ideology. Rather, it is deep-seated patterns of national policy styles with neo-corporatist traits, providing a protective device for the open economies of small countries, which condition the introduction of carbon taxes. The associated routines of decision-making offer coordination mechanisms for proactive macroeconomic policies in which carbon taxation can find a place. Parliamentary democracies with proportional representation, as is common in the smaller countries, provide access to government for political parties that pursue carbon taxation. These in turn sensitise larger political parties to climate concerns, as they benefit from institutionalised practices and routines for problem-solving and consensus-seeking.