Macroeconomic effects of fiscal incentives to promote electric vehicles in Iceland: Implications for government and consumer costs

Ehsan Shafiei, Brynhildur Davidsdottir, Reza Fazeli, Jonathan Leaver, Hlynur Stefansson and Eyjolfur Ingi Asgeirsson

Energy Policy, 2018, vol. 114, issue C, 431-443

Abstract: Iceland as an island country with abundant renewable energy resources has been totally dependent on imported petroleum fuels to meet its transport fuel demand. Transition to electric vehicles (EVs) is of particular interest for Iceland as electricity can be supplied from low-cost renewable energy resources. To evaluate how the transition to EVs can be achieved through fiscal policy incentives, a dynamic simulation modelling of the integrated energy-transport system with a detailed representation of energy technologies and vehicle fleets is implemented. The model is used for a scenario analysis by incorporating key fiscal parameters including different taxes and subsidies on vehicles and fuels. The fiscal policies to induce EVs, which are applied to both vehicle usage pattern and upfront purchase cost, include petroleum fuel tax levies, vehicle tax exemption, extra fees and subsidies. Five fiscal-induced scenarios to promote EVs, including different subsidy and feebate schemes coupled with fuel tax incentives, are compared with a BAU case. The scenario analysis reveals the impact of different fiscal policy incentives on consumer decision behaviour and the implications of fiscal-induced EV promotion for vehicle ownership costs, government tax revenues/expenditure, and overall economic benefits.

Keywords: Vehicle choice; Vehicle tax; Electric vehicle; Fiscal incentives; Government revenue; Consumer cost (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421517308583
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:114:y:2018:i:c:p:431-443

DOI: 10.1016/j.enpol.2017.12.034

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().