Energy prices for small-scale consumption and the world oil price, 1960-2000
Developments in energy prices
Energy prices were high in the late 1970s and the early 1980s as a result of the developments on the international oil market. There was a further increase in the late 1990s, especially for small-scale consumers, as a result of the regulatory energy tax (REB).
Policy
The REB was introduced on 1 January 1996 and was gradually raised thereafter, reaching its highest level so far on 1 January 2001. The end consumers are compensated through the income tax system and a few 'positive stimuli'. In 2000, the REB made up approximately 35% of the energy price for small-scale consumers, and 2% of total national tax revenue came from the REB.
The introduction of an energy tax was motivated by a wish to use taxation to target the environment rather than work. It was thought that this shift could work as a "double-edged sword": on the one hand, through combating unemployment by taxing work less and on the other hand through encouraging more environmentally-friendly behaviour by increasing environment-based taxes. The latter can be achieved through, for example, changes in behaviour or investments in energy savings that reach a break-even point sooner as prices increase. Finally, some of the revenue from the REB goes into investments in sustainable energy.
