Aim The primary goals of this research is (i) to derive direct and cross demand market response functions for automobile powertrains and their energy carriers and (ii) to assess how CO2 emissions from automobiles depend on vehicle and energy prices Methods The market demand for automobiles with differing powertrains is studied by means of a discrete choice model. Statistically precise coefficient estimates are calculated by means of a highly disaggregate data set consisting of virtually all 1.8 million new passenger car transactions in Norway during 2002–2016. Having estimated the model, we derive market response parameters in the form of direct and cross price elasticities of demand for gasoline, diesel, ordinary hybrid, plug-in hybrid and battery electric cars. Results The own-price elasticity of gasoline driven cars is estimated at −1.08, and those of diesel driven, battery electric and plug-in hybrid electric cars at –0.99, −1.27 and −1.72, respectively, as of 2016 in Norway. The cross price elasticities of demand for gasoline cars with respect to the price of diesel cars, and vice versa, are estimated at 0.64 and 0.51, while the cross price elasticities of demand for battery electric cars with respect to the prices of gasoline and diesel driven cars come out at 0.36 and 0.48, respectively. A 1 % increase in the price of liquid fuel in general is found to reduce the average type approval rate of CO2 emission from new passenger cars by an estimated 0.19%. Conclusion Fiscal policy measures affecting the prices of vehicles and fuel have a considerable potential for changing the long term composition of the vehicle fleet and its energy consumption, climate footprint and general environmental impact.
Purpose Various regulatory and fiscal policy instruments are in force to reduce the amount of greenhouse gases and local pollutants emitted by private cars. The incentives operate primarily-or exclusively-on the newest generation of cars. But how fast will technological developments affecting new vehicle models penetrate into the car fleet? The speed at which the adverse effects of private car use will be mitigated through the normal vehicle renewal process, or through an accelerated one, carries considerable interest. Suitable modelling tools are needed. This paper aims to demonstrate the usefulness and flexibility of a bottom-up stock-flow modelling approach to private car fleet forecasting and policy analysis. Methods In the BIG model of the Norwegian automobile fleet, the annual stocks and flows characterising the car fleet are specified as matrices of 682 mutually exclusive and exhaustive cells, formed by cross-tabulations between 22 vehicle segments and 31 age classes. New car registrations follow from a disaggregate generic discrete choice model based on two decades of complete sales data for individual passenger car models. Results Example projections are presented onto the 2050 horizon under a low carbon fiscal policy scenario as well as a business-as-usual scenario. The fiscal policy is seen to make a large difference in terms of long term fuel consumption and CO 2 emissions. Conclusions Stock-flow cohort modelling of the automobile fleet is a powerful and handy tool for policy analysis. Even quite simple and straightforward accounting relations may provide important insights into the dynamics of fleet development. It is possible to incorporate, into the stock-flow modelling framework, interesting and useful behavioural relations, explaining aggregate automobile ownership and travel demand, scrapping and survival rates, or consumer choice in the market for new cars.
Since 2007, the Norwegian vehicle purchase tax includes a large CO2 emission component. At the same time, generous tax exemptions and privileges are granted to battery electric vehicles. Continued application of the purchase tax instrument may induce large-scale penetration of electric cars into the passenger car stock, thus halving the fleet's fossil fuel consumption and greenhouse gas emissions within two or three decades. The main tangible cost of this low carbon policy is the extra cost of acquiring novel products with currently small economies of scale. This cost difference will decline over time. The main benefits consist in reduced energy consumption and greenhouse gas emissions. We calculate the gross and net tangible cost of the low carbon policy in a long-term perspective, i.e. towards the 2050 horizon. A crucial cost determinant is the speed at which the manufacturing costs of battery and plug-in hybrid electric vehicles will fall. Under moderately optimistic assumptions about impending economies of scale, net tangible costs by 2050 come out in the range €48 to 278 per tonne CO2, depending on the discount rate and on battery replacement costs.
Despite their similarities, Scandinavian countries have adopted starkly different automobile tax regimes. The Danish system entails very high and convex tax rates with moderate CO 2 differentiation. In Norway, tax rates are high and convex with strong CO 2 differentiation and total exemptions for zero emission vehicles, even from value added tax. Sweden practices feebates -CO 2 dependent subsidization along with moderate taxation. Relying on a disaggregate discrete choice model of automobile purchase, we simulate the demand for passenger cars as of 2016 in Norway under a set of conditions resembling, respectively, the Danish, Norwegian or Swedish fiscal incentives before and after recent reforms. In all cases, implications are derived in terms of energy technology market shares, average type approval CO 2 emission rates, and aggregate fiscal revenue. The automobile taxation system is seen to have remarkable impacts on all three accounts. In essence, among the three jurisdictions examined, the Norwegian fiscal regime has by far the strongest CO 2 abatement effect. The Danish system is less effective in terms of CO 2 abatement, but provides twice as much government revenue. The Swedish feebate strategy is by far the least effective in terms of both CO 2 mitigation and revenue collection. HIGHLIGHTSAutomobile taxation is a powerful greenhouse gas abatement instrument. Tax exemptions for battery electric cars accelerate their market uptake. The disparate experiences of the three Scandinavian countries are quite instructive.
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