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June 19, 2017

Norway’s Fossil-Fueled Electric Vehicles

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The Financial Times reports that “extremely generous subsidies” have “underpinned the boom” in electric vehicle sales in Norway, and now leaders there are reconsidering these subsidies:

But as electric cars in this country of 5.2m people move from the early adopter phase into the mass market, problems are cropping up for policymakers. One of the most pressing is when — and how — to rein in the extremely generous subsidies that have underpinned the boom, so that electric cars can compete with petrol vehicles on a level playing field.

Those subsidies are fueled in part by fossil fuels, which in 2016 provided 13% of the country’s revenues through Norway’s state-owned oil and gas company, Statoil:

The government’s total net cash flow in 2016, including the dividend from Statoil and various fees, was NOK 127,9 billion, or about 13 % of total government revenues in the National Budget.

Norway has pledged to be entirely carbon neutral by 2030 a goal that includes proposals of banning all fossil fuel-based cars by 2025:

Norway will ban the sale of all fossil fuel-based cars in the next decade, continuing its trend towards becoming one of the most ecologically progressive countries on the planet, according to reports.

The Norwegians have earned praise from environmentalists like Bill McKibben and green technology businessmen like Elon Musk, despite the reality that Norway relies on traditional energy revenues not just to operate its government but also to subsidize its “climate action.”