Thursday, July 16, 2015

How Will Norway Deal with Less Fuel Tax Revenue while Reducing Carbon Emissions?

Norway reviewing future of fuel tax (Road Pricing, Apr. 24, 2015)

 Today we review a short note on the status of fuel taxes and road tolls in Norway which like Canada is blessed with both considerable hydroelectric power and oil and natural gas resources. Norway has a much greater network of roads with tolls as well as many more electric cars than Canada. With the drop in oil prices and, as a result, reduced revenue from fixed fuel taxes, both countries have to decide how to manage the revenue side from fuel taxes and road pricing, as well as the movement toward lower carbon emissions which has been boosted by various incentives for electric cars (which tends to favour higher income owners) which are not available for heavy vehicles and trucks. The resulting decision may favour higher tolls. This is one option not available to oil producing countries, such as the USA and Canada, where tolling is much less seen.

Norway toll roads  

Key Quotes:

"Incentives for electric cars: 
  • Toll free use of roads; 
  • Zero charges for public car parks; 
  • Access to bus lanes; 
  • Free use of car ferries; 
  • -Free use of public vehicle charge points.” 

“20% of all vehicles sold last year were electric, with Norway alone representing one third of all such vehicles sold in Europe “

“Norway has many toll roads, not just the relatively well known Oslo toll ring (which effectively operates as a congestion charging cordon), but on major highways across the country, with 40 currently listed”

Fuel tax is US$3.87 per gallon (US$1.02 per litre) including a tax on CO2.”

“its neighbour Sweden has an influence, as having taxation [on fuel] significantly lower than Sweden will encourage some informal and illegal trade across the border”

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