Carbon tax and its role in reducing greenhouse gas emissions (Finland as a model)

Abstract

Financial and economic policies are required today to play a dual role in achieving sustainable growth and protecting the environment together, as a result of climate change, one of the most serious challenges facing the global economy in the twenty-first century. In this regard, carbon tax stands out as one of the most prominent contemporary economic tools for pricing emissions and charging polluters the true cost of their environmental impact. Therefore, It was assumed that carbon tax would play a positive role in reducing greenhouse gas emissions, and the descriptive analytical approach was followed. The research concluded that the Finnish experience has proven that carbon tax is an effective tool for reducing emissions, as it has contributed to a significant reduction in carbon intensity in the economy over the past three decades without causing a significant slowdown in economic growth.