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International Monetary Fund. European Dept.

Results D. Cost Effectiveness and Aggregate Emission Savings E. Policy Implications TABLE 1. Econometric Results References 1 We thank Simon Black, Brita Bye, Taran Faehn, Robert Bjørnøy Norseng, Ian Parry and participants of a presentation during the 2021 virtual IMF Article IV mission for excellent comments and Tan Wang for research assistance. This selected issues paper is based on Camara et al. (2021).

International Monetary Fund. European Dept.

household behavioral changes over time). In specification 4, we show that the emission savings are much larger in households that own only EVs relative to those who own conventional cars and EVs. D. Cost Effectiveness and Aggregate Emission Savings 19. We use a simple back-of-the envelope calculation to infer the cost effectiveness of the VAT tax incentives . Relating the carbon emissions saved to the amount of fiscal incentives per EV yields a measure of cost effectiveness: effectiveness = subsidies / (emissions_saved X lifetime) where emissions