Thursday, May 09, 2019

Climate Change: Missing the obvious

Writing in The Spinoff, former National Minister Wayne Mapp argues that a good first step to meeting the targets of the Zero Carbon Act would be to end fossil fuelled cars. He's right (and I've talked at length about how to do this here), but falls into a hole when he starts talking about how expensive it will all be:

The big issue is low income families. Maybe half of all car buyers are purchasing second hand Japanese cars for less than $10,000. There is no way they can afford a new electric car. A new electric Hyundai Kona SUV costs $73,000 right now; the price could be around $50,000 for a new model in a few years.

So how do we help lower income families make the shift? It will require a decent subsidy, maybe $5,000 per year for five years of car ownership or annual lease. Not only will this help emissions, it will mean much safer cars for low income families. Many of the terrible recent accidents have many more deaths and injuries in older, less safe vehicles.

Probably 100,000 of the new annual registrations would attract such a subsidy, targeted at lower income families. The initial annual cost would be $500 million, assuming full take up, rising to $2.5 billion per year in five years. It is a large sum of money, but it is doable. Governments have previously had tax packages or family support packages of this size.

...which is an enormously costly policy, but entirely unnecessary. Because, to ask the obvious, why do we need to buy new cars? As Mapp points out, we don't at present. Instead, unless there's a massive cultural shift, we're going to keep buying second-hand vehicles from high-turnover-rate countries, which will be 50% - 75% cheaper than buying new. And the cars most kiwis buy are not high-end SUVs, but compact vehicles designed for driving in suburbia, which are much cheaper. The price of vehicles will almost certainly rise, but we're probably not going to need billions of dollars of annual subsidies to new car dealers to drive it (that said: we can and should follow Norway in taxing dirty vehicles to fund clean ones to drive the transition. Let the dirty drivers of double-cab utes pay to save the world!)

What we are going to need is new electricity generation to power all those cars. But that's another post, I think.