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Biofuel mandate versus favourable taxation of electric cars. The case of Norway




This study investigates whether biofuel policies or favourable taxation of electric cars should be employed to satisfy a green house gas emission target connected to private transport within the Norwegian economy. The study shows that implementation of biofuel generates a welfare gain in the presence of the current favourable taxation of electric cars in Norway. Implementation of biofuels, however, generates a welfare loss when the tax rate on purchase of electric cars is increased to the average tax rate on purchase of diesel powered cars.

Suggested Citation

  • Geir H. Bjertnæs, 2013. "Biofuel mandate versus favourable taxation of electric cars. The case of Norway," Discussion Papers 745, Statistics Norway, Research Department.
  • Handle: RePEc:ssb:dispap:745

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    References listed on IDEAS

    1. Harry de Gorter & Yacov Tsur, 2010. "Cost--benefit tests for GHG emissions from biofuel production," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 37(2), pages 133-145, June.
    2. Jacobs, Bas & de Mooij, Ruud A., 2015. "Pigou meets Mirrlees: On the irrelevance of tax distortions for the second-best Pigouvian tax," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 90-108.
    3. Danielle Devogelaer & Dominique Gusbin, 2010. "Working Paper 13-10 - Electric cars: Back to the future?," Working Papers 1013, Federal Planning Bureau, Belgium.
    4. A. Bovenberg, 1999. "Green Tax Reforms and the Double Dividend: an Updated Reader's Guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 421-443, August.
    5. Eggert, Håkan & Greaker, Mads & Potter, Emily, 2011. "Policies for Second Generation Biofuels: Current status and future challenges," Working Papers in Economics 501, University of Gothenburg, Department of Economics.
    6. Pasaoglu, Guzay & Honselaar, Michel & Thiel, Christian, 2012. "Potential vehicle fleet CO2 reductions and cost implications for various vehicle technology deployment scenarios in Europe," Energy Policy, Elsevier, vol. 40(C), pages 404-421.
    7. Caulfield, Brian & Farrell, Séona & McMahon, Brian, 2010. "Examining individuals preferences for hybrid electric and alternatively fuelled vehicles," Transport Policy, Elsevier, vol. 17(6), pages 381-387, November.
    8. Sorda, Giovanni & Banse, Martin & Kemfert, Claudia, 2010. "An overview of biofuel policies across the world," Energy Policy, Elsevier, vol. 38(11), pages 6977-6988, November.
    9. Lapan, Harvey & Moschini, GianCarlo, 2012. "Second-best biofuel policies and the welfare effects of quantity mandates and subsidies," Journal of Environmental Economics and Management, Elsevier, vol. 63(2), pages 224-241.
    10. John K. Dagsvik & Gang Liu, 2006. "A Framework for Analyzing Rank Ordered Panel Data with Application to Automobile Demand," Discussion Papers 480, Statistics Norway, Research Department.
    11. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers Archive 12881, Iowa State University, Department of Economics.
    12. Thiel, Christian & Perujo, Adolfo & Mercier, Arnaud, 2010. "Cost and CO2 aspects of future vehicle options in Europe under new energy policy scenarios," Energy Policy, Elsevier, vol. 38(11), pages 7142-7151, November.
    13. Lawrence, Robert Z., 2010. "How Good Politics Results in Bad Policy: The Case of Biofuel Mandates," Working Paper Series rwp10-044, Harvard University, John F. Kennedy School of Government.
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    More about this item


    Biofuel; Mandates; Electric cars; Greeen house gas emissions;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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