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Historically, electric car subsidies have been a success. No country has had a faster transition to electric cars than Norway. Last year was 82 out of 100 new car purchase all-electric. In 2010, the figure was one in 100. The dramatic change is largely due to the fact that the subsidies make it very profitable to buy an electric car rather than a fossil car.
Today the situation is different. Most people will still choose electric car even without tax benefits. In the past, the subsidies compensated for the fact that electric cars were inferior to fossil cars. However, today's electric cars are safe, good and have considerable range. In addition, Norway has a well-developed network of charging stations. It is also cheaper to charge electric cars than to buy gasoline.
Subsidies also lead to increased car use, since electric cars are becoming cheaper relative to alternatives such as walking, cycling and public transport. Instead of encouraging people to settle near public transport hubs, electric car policies make it more attractive to commute by car. This is detrimental to both the local environment, climate and urban development.
A third factor is that the subsidies cost too much. Since “everyone” now buys electric cars, overall subsidies have more than doubled in three years. When the measure costs tens of billions, there is much else we can't afford to pay for. The government should therefore cut electric car subsidies.
However, there are good reasons to and spend the funds on climate action. Recent research suggests that global temperature increases have far greater effects than previously thought. A much-publicized study A study by social economists from Harvard and Northwestern universities shows that a one-degree increase in temperature would reduce global output by 12 percent. The impact is roughly equal for both poor and rich countries.
DN fears extensive provisioning activities if tens of climate billionaires are suddenly to find new homes (in the editorial, 3 August). It's understandable. It will undoubtedly attract the customary vultures who claim that money for them is best for everyone. However, there are plenty of good measures you can spend money on.
One option is to cut Norwegian emissions. Norway has notified the United Nations under the Paris Agreement that we will reduce greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels. In working on this, however, the government has inflicted a significant handicap on itself. They want the entire emissions cut to be taken in Norway, without the help of quota purchases in the EU.
Tackling all the climate emissions in Norway is doomed to failure. It also has The Environment Agency has been determined.. And even if we were to succeed, it is highly ineffective climate policy.
The paradox of Norwegian climate policy is that politicians are willing to spend ever larger amounts on emissions reduction, but they are doing it less and less effectively. A national emissions target for Norway prevents us from taking advantage of cheaper measures abroad, which results in less emission reduction for every penny spent.
A better option is to buy allowances and emission credits from other EU/EEA countries. Even better are contributions to reducing deforestation in Brazil, Indonesia and Congo, which for small amounts can equivalent to all of Norway's emissions. We could also have issued state guarantees for increased construction of renewable energy in developing countries, at about no cost to ourselves. Or we could invest tens of billions in it Profitable Climate Investment Fund to Norfund.
Last year Norfund invested NOK 1.6 billion in developing countries through its Climate Investment Fund - less than four per cent of what we spent on electric car subsidies. The investments are estimated to cut 8.5 million tonnes of CO2 emissions annually. That is equivalent to a sixth of Norway's total emissions and is almost twice as much as Norway has cut in greenhouse gas emissions since 1990.
International climate action has a gigantic effect compared to climate action in Norway, yet we spend pennies on these. In fact, electric car subsidies alone are three times larger than Norway's overall purported climate finance internationally.
As the world changes, policy should also be adjusted. Electric car subsidies should now be cut, and rather go to effective climate action abroad.
