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Norway's Increased Carbon Tax Feared To Cause Airline Closures, Increased Fuel Prices, And Job Layoffs

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The Norwegian government has taken drastic measures to cut down on its carbon emissions and transition to a more eco-friendly state. Recently, it tripled the CO2 emission tax, which many environmentalists agree is a significant ecological success for the country. But the revised tax will also have some negative consequences, which right-wing politicians suggest can plunge the country into economic dishevel.

In its new Climate Plan for 2021-2030, which was passed on Friday, Norway pledged to slash its national CO2-emissions by 50-55 percent. It announced that it would make cuts in sectors such as transport, waste, agriculture, and construction, as well as some emissions from industry and the oil and gas sector. Norway also announced that in order to meet the goals of the Climate Plan it would increase large emission taxes by the scale of three, meaning a rise of 590 kroner per ton of CO2 today to 2,000 kroner per ton in 2030.

While the government insists that this will not affect the other taxes, right-wing politicians and industrialists argue that the tax will in fact bring economic hardships for the country.

Head of the Norwegian airline company Widerø, Stein Nilsen has warned that his airlines may face closure as a result of the increased tax. “This is dramatic,” he told newspaper VG. “We have no profitability to handle this. We will not be able to maintain the routes we operate today with this tax level.”

Minister of Climate and the Environment, Sveinung Rotevatn, also admits that the tax may lead to higher fuel prices. He also says that the tax may increase the prices of some cars and influence the interests of automobile industries in the country.

“None of the new taxes apply to private individuals,” he said, “But the general increase in the CO2 tax will impact which car you benefit from buying from now on because the most fossil intensive producers will lose out on the higher CO2 tax.”

The opposition too has voiced concerns about the plan. “This may mean outsourcing Norwegian jobs,” Jon Georg Dale from the right-wing Progress Party told news agency NTB Friday. “Businesses may end up just moving their emissions and production to other countries,” he added. 

Nevertheless, despite all the repercussions that the plan may have, it is necessary for it to be implemented, as the transition to a more environmental-friendly society now calls for radical measures.

Source: Forbes