Discussion Papers,
Statistics Norway, Research Department

Abstract: This study investigates whether biofuel policies or favourable taxation of electric cars should be employed to satisfy a green house gas emission target connected to private transport within the Norwegian economy. The study shows that implementation of biofuel generates a welfare gain in the presence of the current favourable taxation of electric cars in Norway. Implementation of biofuels, however, generates a welfare loss when the tax rate on purchase of electric cars is increased to the average tax rate on purchase of diesel powered cars.

Keywords: Biofuel; Mandates; Electric cars; Greeen house gas emissions

JEL-codes: Q54; R48; H23 June 2013

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