{"title":"Economic Problems with Subsidies for Electric Vehicles","authors":"John Freebairn","doi":"10.1111/1759-3441.12366","DOIUrl":null,"url":null,"abstract":"<p>The use of motor vehicles in Australia generates external costs. The external costs are associated with government expenditure on road infrastructure, traffic congestion and road accidents as well as pollution. A subsidy for electric vehicles will reduce the pollution external cost, and more so as the share of electricity generated from fossil fuels declines. However, the subsidy-induced increase in motor vehicle use will increase the other external costs. Also, the subsidy and the fall in excise tax revenue collected will add to the budget deficit. The phase-in of electric vehicles provides an opportunity to reform special taxes and charges on the use of motor vehicles. The current ad hoc and long time ago imposed government taxes and charges on motor vehicles should be replaced with explicit taxes to internalise each of the external costs of motor vehicles.</p>","PeriodicalId":45208,"journal":{"name":"Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.9000,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/1759-3441.12366","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Papers","FirstCategoryId":"1085","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/1759-3441.12366","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
The use of motor vehicles in Australia generates external costs. The external costs are associated with government expenditure on road infrastructure, traffic congestion and road accidents as well as pollution. A subsidy for electric vehicles will reduce the pollution external cost, and more so as the share of electricity generated from fossil fuels declines. However, the subsidy-induced increase in motor vehicle use will increase the other external costs. Also, the subsidy and the fall in excise tax revenue collected will add to the budget deficit. The phase-in of electric vehicles provides an opportunity to reform special taxes and charges on the use of motor vehicles. The current ad hoc and long time ago imposed government taxes and charges on motor vehicles should be replaced with explicit taxes to internalise each of the external costs of motor vehicles.
期刊介绍：
Economic Papers is one of two journals published by the Economics Society of Australia. The journal features a balance of high quality research in applied economics and economic policy analysis which distinguishes it from other Australian journals. The intended audience is the broad range of economists working in business, government and academic communities within Australia and internationally who are interested in economic issues related to Australia and the Asia-Pacific region. Contributions are sought from economists working in these areas and should be written to be accessible to a wide section of our readership. All contributions are refereed.
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