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Are E-Bike Subsidies Cost Effective in Mitigating Carbon Emissions?

Author

Listed:
  • Anders Anderson
  • Harrison Hong
  • Eline Jacobs

Abstract

E-bike subsidies are used in a number of large carbon-emitting countries. Evaluating their cost effectiveness in reducing emissions is more complicated than for other durable green goods since e-bike owners might not substitute away from driving. We evaluate a representative Swedish subsidy program by combining administrative, insurance, car registry and survey data. We find a complete passthrough of the subsidy to consumers, which incentivized a doubling of e-bike sales. For the 90,000 individuals in our subsidy sample, we find however only a small substitution from driving based on registry estimates, much smaller than reported by subsidy recipients in surveys. The cost of carbon would have to be $800 per ton for the program to be cost effective. We also address additionality, coincidental benefits and alternative more cost-effective e-bike subsidy designs.

Suggested Citation

  • Anders Anderson & Harrison Hong & Eline Jacobs, 2022. "Are E-Bike Subsidies Cost Effective in Mitigating Carbon Emissions?," NBER Working Papers 29913, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29913
    Note: EEE
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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

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