Wednesday, November 16, 2005

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.


When I purchased my Prius almost two years ago now I had two purposes. One was to metaphorically give the finger to the petrol companies, and one was to demonstrate that there was a concrete demand for the technology in this country by putting my money where my mouth was. So I happily paid the premium (technically, I'm still paying it off).

I wouldn't turn down a few-thousand dollar payback for my trouble, esp. since goverments overseas already had such rebate schemes in place at the time, but I certainly don't expect one.

Posted by Anonymous : 11/16/2005 05:39:00 PM

The government put a limit on the age of cars that you can import back in 2002 so this wouldn't be a new idea. There are some problems with this though. Further restrictions on what can imported would makes a decent car less affordable for people on low incomes (you achieve the environmental aim but at a cost), it effectively subsidises (foreign) car manufacturers and gives hand outs to people who are already rich enough to afford new cars...the socialist in me is cringing here.

Decent town planning that focuses on public transport, biking and walking, and which keeps the roads free for commercial traffic is the way to go but that horse has already bolted in many cases.

I'd love for someone to pay me to ditch my 1991 Telstar but I don't think I can really justify using someone else's taxes to do it.


Posted by Anonymous : 11/16/2005 09:13:00 PM

Icehawk: which is why the incentives specifically target fuel efficiency rather than age... the difference in payments between used and new is to do with the expected lifetime of the car in the New Zealand fleet.

Posted by Idiot/Savant : 11/17/2005 11:01:00 AM

How about something that would make a real difference? Say, a 100% tax on all car imports, with the proceeds going on free public transport? Tax exemptions could be available for people who have genuine reasons for needing cars, eg the disabled, people in rural areas. The minor incentives being talked about at the moment are hopelessly inadequate.

Posted by Commie Mutant Traitor : 11/17/2005 12:39:00 PM

They have the "tax breaks for rural drivers" business in Oz. Trouble is, rural drivers all want big 4WDs...

Posted by Chris : 11/17/2005 04:28:00 PM