A Cost Benefit Analysis to pay an Increased Premium on Carwrecks in Norway in 1996

In 1996 the premium on carwrecks was increased from 1000 NOK to 6000 NOK. The public was told that this increase was just valid for carwrecks handed in during this year. There were handed in over 211 000 wrecks of private cars in 1996 a substantial increase from 1995 of only 61 000 wrecks. In this working report a cost benefit analysis is worked out. This analysis evaluates the environmental effects and the financial costs of the premium. The cost benefit analysis shows that the instrument was not economic profitable. The cost benefit ratio was below 0.5. We have only looked at the immediate effects in this ana-lysis. If one should look at effects in a longer perspective, a model to analyse the effects of future generations of cars must be worked out.