An column by Eric Reguly in the Globe:
Norway’s electric cars subsidies: a lot of money, not a lot of gain
Like many countries in the West, Norway, an oil exporter, wanted to clean up its act. The centrepiece of that effort was the mass rollout of electric vehicles and the results have been spectacular – some 60 per cent of new car sales are EVs…
That’s the good news. The bad is that the sales of those EVs has come at great cost to the taxpayer, and will continue to do so as Norway pursues an all-EV fleet. Those billions of dollars of subsidies might have been put to far more effective use elsewhere in Norway’s carbon-reduction effort….
Norway’s lavish EV freebies have actually intensified the car culture, not diluted it. The less glam options, such as public transportation, got buried in the green plan….
Norway decided in the 1990s that EVs were the way to go as “global warming” entered the everyday lexicon and the country became acutely aware that its massive North Sea oil industry was part of the climate problem. Norway was rich – still is – and a cynic (not me, of course) would say that EVs became a luxury form of greenwashing for Europe’s premier petro-state….
To make them affordable, the national and local governments in Norway rolled out incentive after incentive. Here are a few of them: exemption from the 25-per-cent value-added (VAT) tax on new car purchases; exemption from import duties; exemption from emission fees; no fuel taxes; cut-rate insurance; and ultra-cheap or free parking, road tolls and car ferry tickets. Many cities also gave EVs unfettered access to bus lanes….
As a climate change effort, Norway’s embrace of EVs has worked, but only a bit. Road traffic emissions fell by about 10 per cent between 2014 and 2018, though the continued improvement in the efficiency of regular cars no doubt helped. But what if those billions in EV subsidies over the years had been devoted to other climate efforts, such as home insulation, the expansion of public transport or tighter emission controls on office buildings and factories? The drop in emissions might have been significant.
As it is, Norway’s EV subsidies look like a giveaway to the auto industry, an effort that is putting more cars on the road. Indeed, the total number of cars has climbed in recent years, partly because it appears that most buyers (such as my Norwegian friend) are not swapping their regular car for an EV; the EV is an addition to the regular car. No country, no city, needs more cars. What they need is fewer cars and credible reductions in carbon emissions. The Norway plan, so far, has done neither – at great expense.