Vehicle choices and urban transport externalities. Are Norwegian policy makers getting it right?

Paal Brevik Wangsness (), Stef Proost and Kenneth Løvold Rødseth
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Paal Brevik Wangsness: Institute of Transport Economics – Norwegian Centre for Transport Research, Postal: Gaustadaleen 21, 0349 Oslo
Kenneth Løvold Rødseth: Norwegian University of Life Sciences, Postal: Norwegian University of Life Sciences, P.O. Box 5003 NMBU, N-1432 Ås, Norway

No 2-2018, Working Paper Series from Norwegian University of Life Sciences, School of Economics and Business

Abstract: Norway has the world’s highest share of electric vehicles in its vehicle stock – in particular battery electric vehicles (BEVs). BEVs have reached a 20% share of the new car sales in Norway, thanks to a set of policies that include high purchase taxes for fossil fueled cars, and for BEVs, free parking, no tolls, and the right to drive on the bus lanes. This paper uses a stylized model of the transport market in the greater Oslo area (1.2 million inhabitants) to analyze transport policies. First, we explore the medium-term effects of the current BEV friendly policies. Second, the model is used to explore the potential of better pricing of car and public transport use, and of better car purchase taxes. We find that the current policies lead to massive penetration of BEVs and therefore to a strong reduction of CO2 emissions. However, they also lead to much more congestion and a decrease in the use of public transport. Better policies require efficient pricing of road congestion, a better use of public transport, and provide incentives for consumers to choose the most efficient combinations of cars. Such policies lead to a less extreme penetration of BEVs, and lower CO2 emissions reductions than the current transport policies. However, they do achieve a better transport equilibrium and substantial resource cost savings, leading to higher welfare levels.

Keywords: electric vehicles; climate policy; urban transport policy; transport modeling (search for similar items in EconPapers)
JEL-codes: H23 H71 Q54 Q58 R41 R48 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2018-04-13
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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