Working papers in Transport Economics
Car fleet policy evaluation: the case of a Bonus-Malus system in Sweden
(), Muriel Beser Hugosson
(), Pia Sundbergh
() and Staffan Algers
Abstract: The car fleet composition is important from several
aspects including energy consumption, greenhouse gas and other emissions.
Evaluation of car fleet policy measures is therefore vital for choosing
among different car policy options. In this paper, we demonstrate how such
an evaluation could have been carried out in the context of the Swedish
governmental investigation of a fossil free car fleet, released early 2014.
One objective of the policy package is to design a Bonus-Malus system that
pushes the Swedish fleet composition towards the EU objectives of the
average CO2 emissions for new cars by 2021. The proposed scenarios address
cars bought by private persons as well as by companies. These scenarios
differ in designs for registration tax, vehicle circulation tax, clean car
premiums, company car benefits tax and fuel tax. We use the Swedish car
fleet model system to predict the effects of the proposed scenarios on the
Swedish car fleet composition. Also, we build a simple supply model to
predict future supply. Our model results show that none of the three
proposed scenarios is actually successful enough to meet the Swedish
average CO2 emissions target. The average CO2 emissions in two of these
scenarios are actually not much different from the business as usual
scenario. In all scenarios, the number of electric and plug in hybrid cars
increase. However, in all scenarios, the car fleet will still be totally
dominated by fossil fuelled cars. Also, relative to a business as usual
scenario the number of ethanol and gas cars is reduced in the other
scenarios. Also, the Bonus-Malus system gives a positive net result in
terms of budget effects showing that car buyers choose to pay the malus for
a car with higher emissions rather than to be attracted by the bonus of a
car with lower emissions.
Keywords: Bonus-Malus; Taxation policies evaluation; Car fleet modeling; Vehicle supply model; (follow links to similar papers)
JEL-Codes: R40; (follow links to similar papers)
29 pages, September 27, 2016
This paper replaces CTS Working Paper 2015:6 "Evaluation of bonus-malus systems for reducing car fleet CO2 emissions in Sweden"
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