The Department of Economics has received funding from NVV for two projects lead by Shon and Rob, together with Ting, Johanna and Chandra (Department of Forest Economics).
The Bonus-Malus policy for private vehicles: how large is the carbon emission?
The project will provide a comprehensive ex-post evaluation of the bonus-malus scheme (introduced July 2018) for private cars. The bonus-malus is an important policy initiative for attaining an intermediate goal of Swedish climate policy, of a 70% reduction in transportation-related GHG emissions by 2030. The bonus-malus scheme targets the market for new cars, subsidising cars with emissions lower than a defined threshold and penalising cars with emissions higher than a threshold. The effects of this policy upon carbon emissions depend on three aspects: changes in purchases of new vehicles, market shares, and usage of cars with varying emission profiles. We propose two complementary ways of quantifying the effect of the bonus-malus policy on all three facets, and provide a means of evaluating different aspects important to policy design, such as the effect of increased stringency by reducing the threshold for bonus or increased malus amounts, and the effects upon different household types. We will evaluate not only the effect of the policy on shares of high and low emission vehicles in the new car market, but also effects on household decisions with regard to vehicle choice and vehicle usage. More specifically, our project answers the following questions: (i) What is the effect of bonus-malus on the share of high- and low-emission vehicles? (ii) How sensitive are the results to changes to the thresholds for bonus and malus, and the size of the monetary incentives? Could the policy be adjusted to achieve the same emission reductions at a lower cost, or higher welfare gains? (iii) How much do emissions change following the bonus–malus scheme, when we account for changes in the entire car market, including the second-hand market and mileage choices? (iv) Which household types are most affected by the policy and how may the policy be redesigned to further reduce carbon emissions, while not adversely affecting specific groups of households?
Evaluating the impact of Klimatklivet: Current evidence and future design
This research project focuses on the Swedish Environmental Protection Agency’s climate investment support programme (Klimatklivet). Klimatklivet provides financial aid to Swedish businesses and other organizations investing in projects that mitigate their Greenhouse Gas (GHG) emissions. Klimatklivet is one of Sweden's major policies targeting GHG emissions and has contributed a total of 5.4 billion SEK to more than 3200 different projects. The overall objective of this project is to improve our understanding of the impacts of Klimatklivet on participants’ investment decisions, energy use, emissions and economic performance using data on ex-post observed outcomes. The project will estimate the causal effects of Klimatklivet using the latest econometric techniques. The project will also provide advice on how to improve the design of the programme in order to make future evaluations of the programme more effective. The project is divided into three separate but related work packages (WP). Data required for the project is collected and prepared in WP1. The impact of Klimatklivet on GHG mitigation investments, energy use, GHG emissions and economic performance is evaluated in WP2. A programme design for Klimatklivet that improves its ease of evaluation is developed in WP3.