Carbon valuation in the transport sector: Reflections on the Swedish case

Cost-benefit analysis is an important tool for decisions in infrastructure and transport planning. One effect that is calculated in cost benefit analysis is climate effects and for this it is necessary to make valuation of the social cost of carbon. There are different ways to calculate this cost and there is no consensus on what method to use. In Sweden the social cost of carbon that is used in cost benefit analysis in the transport sector is based on the Swedish carbon tax on fossil fuels which today is 1.14 SEK/kg CO2 (or approx. 114 €/tonnes CO2). Within economics there is a longstanding discussion on how to calculate the social cost of carbon, while the question has not been studied from a broader social science perspective. The aim of this paper is to analyse how the valuation and use of the social cost of carbon can be understood from a political science perspective, and whether it can contribute to effective climate policies. Furthermore, the paper will discuss whether cost benefit analysis is a suitable method to assess the appropriateness of transport infrastructure (at least from a climate perspective), since climate effects have a marginal impact on calculation outcomes. The paper addresses three questions:  To what extent can the present carbon valuation in Sweden, based on the carbon tax, be seen as a reflection of the current political estimation of the carbon value?  To what extent does the present carbon valuation affect the outcome of cost benefit analysis, and how important is the cost of CO2 emissions in the calculation?  How can the long term effects of CO2 emissions on the environment and on society be considered differently in transport and infrastructure planning? The first question is analysed through a text analysis of three governmental reports on carbon tax in Sweden, from three different years (1989, 2009, 2016), where the focus has been to understand the motivations behind the level of the carbon tax and to what extent the level of the tax is linked to an estimation of the social cost of carbon. The conclusion is that the level of the tax is not linked to an estimation of the cost of carbon but rather to an estimation of what is needed in order to reduce emissions. Furthermore, other considerations are also important when the level of the carbon tax is decided, such as secondary effects, acceptance of the tax and interaction with other policy instruments. Questions two and three are analysed mainly through a review of earlier literature and research. For question two, it is concluded that level of the carbon value tends to have a limited impact on the outcome of cost benefit analyses in the transport sector since other costs and benefits (e.g. travel time savings) have a comparatively higher value in the calculations than the costs of climate change. For question three, it is concluded that if climate concerns are to be given higher priority in decision making in the transport sector than today it is necessary to develop alternative planning approaches as a complement, or counterweight, to traditional cost benefit analysis. Two such approaches are to use climate scenarios as the basis for cost benefit analyses, and to specify climate and environmental criteria for projects that should be assessed separately from the cost benefit analysis and be given