Friday, May 12, 2006

One way of fixing it II

Last month I blogged about the reported decline in petrol consumption as consumers reacted to high prices. One of my worries was that anecdote from oil companies isn't the most reliable source of information - but according to this morning's Herald, the trend is real, and is significantly affecting government petrol tax revenue:

Although the effect was delayed, consumers are now reacting more strongly than Treasury tax forecasters expected. Petrol tax revenue was 2.9 per cent less than predicted in the nine months to the end of March, and road user charges, mainly from diesel vehicles, were 4.3 per cent below forecast.

The story also reports that petrol deliveries to service stations are down almost 4 percent, but paradoxically diesel deliveries are up by an equal amount. I'm not sure who pays road user charges and who (if anyone) is exempt, so I'm not sure why the latter isn't reflected in the revenue figures.

So what are people doing? Buying smaller cars, driving smarter - and using public transport. I guess we just have to hope that the government reacts to the latter by ensuring that our public transport infrastructure can cope with the increased load. The good point is that given the length of time kiwis keep their cars, the shift to smaller vehicles will have an effect for years to come.

As mentioned in the earlier post, we'll have to wait a couple of years to see if this is reflected in CO2 emissions - there's about a two or three year lag in calculating the greenhouse gas inventory. But this is a good sign, and shows that we have some hope of getting our transport emissions under control...


What we're gonna need, though, is a use for all the oversize SUVs that get dumped before they're knackered in the downsizing.
I can't help wondering whether all those diesel engines couldn't be recycled into biofueled local generation somehow..

Posted by Anonymous : 5/12/2006 09:50:00 AM

Your figures, such as they are, would suggest that people are switching to diesel cars, on account of them being more fuel efficient. It would be nice if the government were to offer some sort of carrot in this -- reduced road user charges for small diesels, perhaps (as understand it the current smallest slot encompasses everything from ridiculous 2-tonne 4WDs to little European sedans that get 60mpg).

The other nice thing about diesels, as Huskynut has pointed out, is that they're fairly easy to switch over to biofuels.

Another possibility is a an increase in the use of (diesel-powered) public transport, of course. But since most NZers don't have access to useful public transport that seems unlikely to be a driving force...

Posted by Chris : 5/12/2006 12:32:00 PM

That should be "as I understand it".

Posted by Chris : 5/12/2006 12:33:00 PM

The other thing I reckon there'd be a market for is 'rechipping' engines. Most manufacturers seem to tune engines for power (so by comparison their vehicles don't look feeble). Lots can have aftermarket chips installed to up the power further. Since I'd venture most people rarely use the full power of a 2 litre engine, why not have it rechipped to use less fuel (and decrease the power).
I've not heard of anyone offering the service but I suspect it'd be viable (+ simple and cheap).

Posted by Anonymous : 5/12/2006 03:06:00 PM

Actually I suspect it's the other way around -- most new engines are tuned to pass US or EU emissions standards, which are pretty tough. I doubt they remap the injection for a market as tiny as NZ.

I would be very interested in the economies of scale involved in converting all existing older vehicles to a modern (what they call closed-loop) EFI system... it would have to be a lot cheaper than new cars for all.

Posted by Chris : 5/12/2006 03:32:00 PM

"I'm not sure who pays road user charges and who (if anyone) is exempt, so I'm not sure why the latter isn't reflected in the revenue figures."

Around half of diesel is used offroad (agriculture, marine, industrial, rail) and only on-road diesel vehicles pay road user charges. The RUC revenue may be obvious, as RUC was increased on 1 April for 1-6 tonne vehicles, people buy km in bulk in advance to avoid buying more. The other answer is that there are far more diesel cars and there is inadequate enforcement of RUC for them.

Chris - the reason RUC for all vehicles under 4 tonne is the same is that RUC pays for road damage and there is virtually no difference in the road damage effects of different weights of vehicles below 4 tonne, as RUC on a per km basis is around half the price of petrol tax, it is a pretty good deal.

Posted by Libertyscott : 5/12/2006 10:05:00 PM

Great example of the free market working. Don't you just love it. Although I'm not sure a few less cars on the road in New Zealand will have any effect on Co2 emissions considering we contribute about a squillionth of one per cent of the world's emissions.

Posted by Gooner : 5/12/2006 10:16:00 PM

Lets not forget about the more urban benefits of the moves. More public transport use, people will have second thoughts about commuting long distances, increasing pressure for urban developing, lowering rural development and suburban spread. All sorts of strangely beneficial free market flow ons.

Posted by mervenhenry : 5/13/2006 12:36:00 AM

Scott -- I understand the economic argument, but it seems you could fairly easily slip a wee carrot in there for people who choose to drive more fuel-efficient vehicles. If all vehicles under 4 tonnes do bugger-all damage to the roads, then you might as well differentiate within that class on the basis of fuel efficiency (and admit that the road-tax system is aimed at heavy traffic anyway).

Posted by Chris : 5/15/2006 11:02:00 AM