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The vehicle purchase tax as a climate policy instrument

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  • Fridstrøm, Lasse
  • Østli, Vegard

Abstract

Since 2007, the Norwegian vehicle purchase tax includes a large CO2 emission component. At the same time, generous tax exemptions and privileges are granted to battery electric vehicles. Continued application of the purchase tax instrument may induce large-scale penetration of electric cars into the passenger car stock, thus halving the fleet’s fossil fuel consumption and greenhouse gas emissions within two or three decades. The main tangible cost of this low carbon policy is the extra cost of acquiring novel products with currently small economies of scale. This cost difference will decline over time. The main benefits consist in reduced energy consumption and greenhouse gas emissions.

Suggested Citation

  • Fridstrøm, Lasse & Østli, Vegard, 2017. "The vehicle purchase tax as a climate policy instrument," Transportation Research Part A: Policy and Practice, Elsevier, vol. 96(C), pages 168-189.
    • Handle: RePEc:eee:transa:v:96:y:2017:i:c:p:168-189
    DOI: 10.1016/j.tra.2016.12.011
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