Electric Vehicles, Tax incentives and Emissions: Evidence from Norway

By Youssouf Camara, Bjart Holtsmark, Florian Misch

June 8, 2021

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Youssouf Camara, Bjart Holtsmark, and Florian Misch. Electric Vehicles, Tax incentives and Emissions: Evidence from Norway, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper empirically estimates the effects of electric vehicles (EVs) on passenger car emissions to inform the design of policies that encourage EV purchases in Norway. We use exceptionally rich data on the universe of cars and households from Norway, which has a very high share of EVs, thanks to generous tax incentives and other policies. Our estimates suggest that household-level emission savings from the purchase of additional EVs are limited, resulting in high implicit abatement costs of Norway’s tax incentives relative to emission savings. However, the estimated emission savings are much larger if EVs replace the dirtiest cars. Norway’s experience may also help inform similar policies in other countries as they ramp up their own national climate mitigation strategies.

Subject: Environment, Greenhouse gas emissions, Income, National accounts, Tax incentives, Taxes, VAT exemptions

Keywords: Car usage preference, Emission savings, Greenhouse gas emissions, Income, Passenger car emission, Purchased EVs, Savings from the purchase, Tax incentives, VAT exemptions

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/162
Stock No:

WPIEA2021162
ISBN:

9781513582818
ISSN:

1018-5941

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