When Arne Nordbø drove his electric car under the toll gantry and into the mouth of a tunnel leading to this small Norwegian island on a recent Monday, he couldn’t repress a chuckle. “They’ve just lost another $20,” said the Finnøy resident and occasional stand-up comedian. On the losing side of Mr. Nordbø’s commute are local municipalities, including Finnøy, which went into debt to dig the $70 million tunnel but charge no fee on electric cars because of national policies aimed at curbing carbon emissions. The incentive helped convince many islanders to shift to electric cars. The vehicles now account for about a quarter of tunnel traffic, and allow owners to dodge one of the heaviest toll burdens in the country. For the Finnøy mayor, however, the math looks awry. “That doesn’t work in the long term,” says Gro Skartveit, who doubles as chairwoman of the company operating […]