Fiscal instruments favouring electric over conventional cars are greener

Financial incentives and taxes set by countries can encourage consumers to buy passenger cars with lower carbon dioxide (CO2) emissions. An increase in the uptake of electric vehicles reduces emissions of CO2 and air pollutants such as nitrogen oxide (NOx) and particulate matter (PM). Examples from a number of countries show that this uptake can be enhanced by well-designed incentives and taxes. In contrast, tax schemes that promote conventional cars labelled as cleaner do not always result in reduced emissions.