Policy networks as barriers to green tax reform: The case of CO₂‐taxes in Norway

Abstract

From the late 1980s, Norwegian governments have implemented an ambitious scheme of CO₂‐taxes to curb greenhouse gas emissions. However, while the transportation sector and offshore petroleum companies had to accept an increasing tax burden during the 1990s, some of the mainland energy intensive industries were exempted. These exemptions were continued in spite of the recommendations from the 1994 Green tax commission to remove them and a proposal by the government to phase out the exemptions in 1998. The persistence of these exemptions cannot be explained by referring to the energy intensive industry's economic importance, as its relative contribution to the Norwegian economy has waned considerably since the early 1970s. However, the attempts to impose a modest tax on the industry during the 1990s exposed the highly institutionalised nature of the links between the industry organisations, parties and government bodies. By exploiting these links, the industry enjoyed privileged access to the government and major parties in the Parliament. Interestingly, the industry retained its influence when it was challenged by a tax attempt by the government in 1998. The ability of the interest groups to resist this challenge teaches us some important theoretical lessons about the importance of state and party strategies behind the emergence and persistence of cohesive policy networks.