Comparing Fiscal and Incentive-Based Climate Policies: Sweden’s Carbon Tax vs. Germany’s Renewable Energy Act

Author(s)	Mr. Arjun Sabharwal
Country	India
Abstract	This paper conducts a comparative analysis of two significant environmental policies — Sweden’s 1991 Carbon Tax and Germany’s 2000 Renewable Energy Sources Act (EEG). The study investigates their effectiveness in reducing CO₂ emissions, economic implications, and the policy mechanisms that shaped their outcomes. Sweden’s carbon tax demonstrated long-term environmental benefits through gradual price adjustments and increased biofuel adoption, while Germany’s EEG showcased the power of feed-in tariffs and subsidies in rapidly expanding renewable energy generation. However, both approaches faced challenges — Sweden in industrial exemptions and Germany in cost efficiency. By examining these cases, the paper highlights how fiscal and incentive-based frameworks can complement one another to balance emission reduction and economic growth.
Keywords	Carbon Tax, Renewable Energy, Environmental Policy, Sweden, Germany
Field	Sociology > Economics
Published In	Volume 7, Issue 5, September-October 2025
Published On	2025-10-27
DOI	https://doi.org/10.36948/ijfmr.2025.v07i05.57909

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