The Market Impact and the Cost of Environmental Policy: Evidence from the Swedish Green Car Rebate

Cristian Huse () and Claudio Lucinda

MPRA Paper from University Library of Munich, Germany

Abstract: We quantify the effects of the Swedish GCR, a program to reduce oil dependence and greenhouse gas emissions in the automobile industry. We find the GCR to increase the market shares of `green cars' and its cost to be $109/tonCO2 saved, thus 5 times the price of an emission permit. Since the main green cars in Sweden are FFVs (flexible-fuel vehicles), which can switch between petrol (gasoline) and ethanol, we also account for fuel choice, which increases the cost of the program. Finally, we show that consumers would have purchased FFVs regardless of the rebate provided by the GCR.

Keywords: CO2 emissions; Ethanol; Environmental policy; Flexible-fuel vehicles; Fuel economy; Green Car; Governmental policy; Greenhouse gases; Renewable fuels. (search for similar items in EconPapers)
JEL-codes: H23 H25 L11 L62 L71 L98 Q42 Q48 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Journal Article: The Market Impact and the Cost of Environmental Policy: Evidence from the Swedish Green Car Rebate (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:48905

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