An analysis of the Swedish green car rebate

Abstract: In this study we use market level data from the Swedish automobile market to estimate the effect of the green car rebate on the market shares of green cars. We find that the rebate has had a positive impact on the market shares of green cars in general. The effect differs between fuel types and the impact is largest for low emission gasoline and diesel cars. When compared to the initiative to exempt alternatively fuelled cars from the Stockholm congestion tax we find the rebate to contribute less. If assessing the rebate program only by its ability to reduce carbon emissions, we find the program to be expensive compared to the price of carbon emission rights.