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Electric Vehicles, Tax incentives and Emissions: Evidence from Norway

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  • Youssouf Camara
  • Bjart Holtsmark
  • Florian Misch

Abstract

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.

Suggested Citation

  • Youssouf Camara & Bjart Holtsmark & Florian Misch, 2021. "Electric Vehicles, Tax incentives and Emissions: Evidence from Norway," IMF Working Papers 2021/162, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/162
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=460658
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    Cited by:

    1. Halse, Askill H. & Hauge, Karen E. & Isaksen, Elisabeth T. & Johansen, Bjørn G. & Rauum, Oddbjørn, 2022. "Local Incentives and Electric Vehicle Adoption," Memorandum 1/2022, Oslo University, Department of Economics.

    More about this item

    Keywords

    emission savings; passenger car emission; savings from the purchase; car usage preference; purchased EVs; Tax incentives; Income; VAT exemptions; Greenhouse gas emissions;
    All these keywords.

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