The Norwegian Vehicle Electrification Policy and Its Implicit Price of Carbon

The rapid market uptake of battery and hybrid electric cars in Norway is unparalleled. We examine the fiscal policy instruments behind this development. In essence, Norwegian consists taxing internal combustion engine vehicles rather than subsidizing ones. There are 14 different incentives place bearing on vehicles, fuel, or road use. All them some way CO2-differentiated. tradition positive economics, we derive price carbon implicit each instrument total package taxes subsidies. characterizing trade-off between conventional as 2019 exceeds €1370 per ton CO2. For light heavy-duty commercial corresponding prices have been conservatively estimated at €640 €200 CO2, respectively. addition, penalty incurred by automakers for not meeting their 2020/2021 target under EU Regulation 2019/631 corresponds to a order €340 As compared emission allowances European cap-and-trade system, paid motorists one two orders magnitude higher.