Reducing transport emissions

As has been pointed out before, policy towards reducing our greenhouse gas emissions has to aim at basically two areas: cars and cows. Of these, the latter are considered to be a long-term problem, to be solved by research. Greenhouse policy therefore has to focus heavily on the former. And it's certainly an area worth focusing on. Transport is responsible for around 18% of our total greenhouse gas emissions, and is continuing to grow at (IIRC) 4% a year. It has contributed around a third of our total emissions growth since 1990, and looks to contribute even more in future. Reducing these emissions is key to meeting our obligations under the Kyoto Protocol.

So far, the government has only tinkered in this area. They have introduced a biofuels initiative, which is expected to reduce total emissions by 0.9%, and a carbon tax, which will help push the market towards changing transport patterns and more fuel efficient vehicles. But they need to do more. And one obvious area where they can make easy savings is by improving the average efficiency of our vehicle fleet. Due to the cheapness of second-hand Japanese imports, New Zealanders tend to drive older cars, with lower fuel efficiency and dirtier engines. Changing this (or at least reducing the proportion of older cars in the fleet) would allow us to make significant savings in carbon dioxide emissions, and perhaps other areas as well.

Various suggestions have been made in this area. Peter Dunne suggested paying people to take older vehicles off the road, and the Greens have suggested barring imports of older vehicles combined with fuel efficiency dependent "feebates" on registration. And now the Business Council for Sustainable Development has weighed in, with a report on incentivising green vehicles [PDF]. This takes a detailed look at the "feebate" idea, and proposes cash incentives of up to $3000 (and penalties of up to $2000) for new vehicles, with lower incentives for used imports. This is estimated to cost the government approximately $100 million a year. Unfortunately, there's far less data on the possible savings; the report gives data only for individual vehicles, with no modelling of how the number of replacements would affect carbon emissions. OTOH, I don't expect the policy to pay for itself purely through carbon reduction (and it won't, based on the expected size and cost of our Kyoto overrun compared with the total size of transport emissions); instead, the social savings will come from reduced fuel and (more importantly) health costs. According to the Ministry of Transport, vehicle-sourced air pollution kills 400 people a year - almost as many as are killed in accidents. The overall health effects are estimated to cost the government $442 million a year. Encouraging the uptake of newer, cleaner vehicles will take a significant slice out of this. Given that we spend over $200 million a year to reduce road deaths, the move would seem justified on health grounds alone.

One area I disagree with the BCSD is that of retrospective incentives. They suggest backdating incentives (but not penalties) for two years to reward those that have made the right choice and to compensate for any loss of resale value. But the point of an incentive scheme is to influence behaviour, and by definition you can't influence behaviour that has already occured. Any payments for purchases before a policy is even announced are therefore simply a waste of money.