The Explosion of Electric Vehicles Use in Norway - Environmental Consciousness or Economic Incentives?

The use of Electric Vehicles (EVs) has exploded in Norway where Oslo is now the capital city of EVs. From a transportation research point of view, there are two questions that lend themselves from the observations above: (1) are the Norwegian car user more environmentally conscious than others in the western world and/or, (2) are there economic incentives in place that encourage the use of EVs in Norway more than in other countries? In this paper the authors examine the two questions posed above in the case of Oslo where a toll ring has been in place since 1989 and where 60% of funds collected are used to improve the road network while the rest are used to improve both public transportation and cycling. In this paper the authors also estimate the loss of income to the government due to the exemption of tolls. Further the authors examine a first-best scenario where EVs pay the external cost of their road use versus those of conventional vehicles. The authors find that it is due to economic incentives rather than Norwegians being more environmentally conscious.