Carbon Tax Countries 2025

Highlighted Countries

United States

The United States does not have a federal carbon tax, though several states have adopted their own carbon pricing systems. Rather than traditional taxes, these take the form of cap-and-trade or cap-and-invest programs, which limit and price emissions. California operates the largest program, joined by Washington State in 2023, while 12 northeastern states, including New York, Massachusetts, and Pennsylvania, participate in the Regional Greenhouse Gas Initiative (RGGI). Together, these efforts function similarly to a carbon tax by assigning a cost to each ton of CO₂ emitted.

Canada

After many years of proposed carbon taxes, Canada finally passed carbon tax legislation on a federal level in 2018. The carbon tax came into effect in 2019. However, Canada’s provinces have the option to enact their own carbon tax legislation instead. This is allowed because the more rural northern provinces may not have the same access to green energy as the more developed southern provinces. Seven Canadian provinces currently use the federal carbon tax, three have their own carbon tax legislation, and the remaining three are exempt from the carbon tax requirements because they do not have adequate provincial carbon pricing controls.

Sweden

Sweden was one of the first European nations to introduce a carbon tax, which it did in 1991. Its carbon tax legislation served as a model for many other European countries that introduced their own carbon taxes later. The carbon tax legislation in Sweden covers liquefied petroleum gas, petrol, oil, coal, natural gas, and aviation fuel used for domestic flights. However, several industries are exempt from the tax in Sweden. These industries include manufacturing, mining, and commercial horticulture. This effectively means that fewer than half of all business operations in Sweden are covered by the carbon tax.

The carbon tax in Sweden was initially SEK 250 per 1000kg of carbon emissions. In 1997, the rate was raised to SEK 365. In 2007, the rate was raised sharply to SEK 930. As of 2024, the rate was €118.35.

Ireland

A federal carbon tax in Ireland was under consideration in 2004, but the government rejected the idea. The carbon tax legislation in Ireland eventually passed and was implemented in 2010. It covers liquid petroleum gas, fuel oil, kerosene, marked gas oil, and natural gas. At the time of implementation, the tax was 15 Euros per tonne. It has since been raised to 56 Euros per tonne. Farmers are exempted from the tax.