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Cubic zirconia (c-ZrO<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msub><mrow></mrow><mn>2</mn></msub></semantics></math></inline-formula>) is studied using Density Functional Theory with Hubbard-U corrections (DFT+U). It is shown that the determination of the <i>U</i>-parameters from first principles leads to values for <i>U</i>(Zr-4d) and <i>U</i>(O-2p) which are very different from standard choices. The calculated band gap with these values for <i>U</i> closely matches the experimental gap. Oxygen vacancies are studied using this approach, and it is found that it is possible to closely reproduce the vacancy migration energies calculated with a hybrid functional. The oxygen vacancy is associated with two excess electrons which localize in the vacancy’s cavity. In the presence of these excess electrons, the barrier for vacancy migration is very high. If instead, a charged vacancy V<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msub><mrow></mrow><mi mathvariant="normal">O</mi></msub></semantics></math></inline-formula><inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msup><mrow></mrow><mrow><mn>2</mn><mo>+</mo></mrow></msup></semantics></math></inline-formula> is considered, its mobility increases considerably—an effect that is attributed to the absence of space charges localized in the cavity.