Even though carbon tax policies are fundamental for low-carbon growth and energy-effective investments, empirical evidence shows that longstanding continuation of a carbon tax is not self-evident. The sheer complexity of carbon tax continuation is reflected by the adoption – and subsequent reversal – of the carbon tax in Australia. In July 2014, two years after implementation, the carbon tax was repealed by the right-wing coalition government led by Tony Abbott. Whereas Australia has a tumultuous relationship with carbon tax implementation, Sweden has been acknowledged for its longstanding carbon taxation policy to achieve cost-effective emission reduction. In 1991, Sweden was one of the first countries to implement a carbon tax and has since then been able to gradually increase tax levels per metric ton of carbon dioxide (CO2). This study aims to explain Sweden's continued carbon tax and Australia's carbon tax reversal. Given the broad breadth of this objective, this study focuses on the agenda-setting, formulation, adoption, and implementation phases of Sweden's and Australia's policymaking processes. To structure the contrastive case study, two theoretical frameworks are utilized throughout the study. First, the Multiple Streams Framework (MSF) is used to explore the role of policy entrepreneurs in coupling problems, politics and policies during policy windows. Policy Feedback Theory (PFT) is used to identify policy feedback loops once the carbon tax is adopted or implemented. PFT differentiates between (1) resource and incentive effects and (2) interpretive effects. Based on the comparative analysis, the following conclusions are identified. First, it is evident that in Sweden, the broader tax reform in 1991 was an essential factor for the continued support for the carbon tax. In the end, the continued support was significant to guarantee political support from both right-wing and left-wing politics and its associated voters. Second, in terms of carbon tax design, this study showed that earmarking collected revenues for green spending does not guarantee success. Moreover, the analysis revealed that increasing the tax rate in a step-wise manner (starting with a relatively low tax rate) is a factor contributing to carbon tax continuation. In line with the theoretical frameworks, for the case of Sweden, it is shown that through an effective policy design and policymaking process, the resource effects (allocation of benefits and burden) as described by the PFT allowed for further strengthening (continued coupling of the three streams of the MSF) of the initially formulated carbon tax policy. In contradiction, the carbon tax in Australia was accepted during a period characterized by a fragmented political landscape and an increased divergence in perceptions towards the carbon tax among the public. Put differently, this study emphasizes the significant importance of civil society actors who not only bring policy problems to the forefront of public debate and encourage policy answers, but also support government decisions to pursue these once disclosed. Moreover, the reversal of the carbon tax in Australia highlights the critical nature of high-level political commitment to contentious policy issues – even ones with compelling evidence and precedence for implementation in analogous settings. Specifically, in Australia the carbon tax was politicized, disputed and subsequently used as tool to win the elections and control the government. Within the adoption phase of the policymaking process, the exclusion and discouragement of discussions between opponents and proponents of the carbon tax is a factor that contributed to the reversal of the carbon tax in Australia. Considering the theoretical frameworks, this study showed how the design of the Australian carbon tax induced negative feedbacks through ineffective resource allocations and interpretive effects that negatively shaped the setting and condition in which the carbon tax policy was received by the public and policy makers.