$1,400 cash bonus for buying greener car?

updated 3:49 p.m. ET March 29, 2007

STOCKHOLM, Sweden - Sweden's government on Thursday unveiled a plan to give citizens who buy an environmentally friendly car a 10,000 kronor ($1,400) cash award.

The offer, which could start next month and last through 2009, is part of the government's push to reduce carbon dioxide emissions tied to global warming.

"The environmental advantages should be felt in the heart, but also in the wallet," Environment Minister Andreas Carlgren said.

The government expects the move to spur the sale of so-called green cars by 10-15 percent. Those cars include gasoline-driven vehicles that release less than 120 grams of carbon dioxide per kilometer, electric cars and vehicles running on alternative fuels.

As of 2012, the European Union plans to lower emissions limits for new cars to 130 grams of CO2 per kilometer.

Sweden-based carmaker Volvo, which is owned by Ford Motor Co., criticized the government's proposal, saying it will favor makers of smaller cars because those are typically more fuel efficient.

"It's up to them to reach the requirements that have been set globally. But yes, small cars aren't really their market," government spokesman Tomas Uddin said about Volvo's concerns.

Carlgren said the government would earmark around $36 million for the project, which needs lawmakers' approval.

In February, the EU proposed its 2012 plan of lower emissions limits for new cars, but it also called for increased use of biofuels and cleaner fossil fuels, meant to reduce current car emission levels by 25 percent — even lower than the 130 gram limit. Voluntary emission targets that are already in place call for 140 grams per kilometer by 2008.

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