UK searching for more formulas to boost the purchase of greener cars (and punish polluting cars)
Do you live in the UK? Do you drive a gas guzzler, that is, a car which road tax falls into band G? Bad news for you. Mr. Taxman, well, chancellor Alistair Darling, is going to tweak the tax system next week to give it some "green flavor." In last year's budget, the British government announced a tax increase for polluting "band G vehicles" from £300 ($603) to £400 ($804) that will take effect next month. There was also a cut for "band B" vehicles, which have lower emissions, from £40 to £35.But there's more, because these policies will be pursued further. Let's take company cars. Britain's fleet and business market is one of Europe's largest, accounting about 2/3 of total car sales. At present, someone driving a fuel-saving car pays 15 percent tax, or 35 percent if it's a polluting car. Mr. Darling is thinking about lowering that 15 or raising that 35 percent band. There's also the treatment of mileage run up at work. At present, Britons have a single tax-free level of 40 pence per mile but the British government could introduce new bands, such as 60 p/mile for greener cars and 20 p/mile for more polluting vehicles.
Julia King, vice-chancellor of Aston University, wrote a report that predicted the "almost complete decarbonisation of road transport" by 2050. According to her, electric cars are likely to dominate the roads – although the medium-term solution would involve hybrid gas-electric vehicles and biofuels. These new electric fleet would "only" need 16 percent electric capacity generation increase. Our source article states that her report will be used as justification for the new tax measures.
[Source: Financial Times (h/t to Karl-Uwe for the tip)]
Reader Comments (Page 1 of 1)
Karl-Uwe Strunzen 3:13PM (3/11/2008)
Excellent news, to be sure, but they could also have gone straighter to the point: a 100 pound increase for band G is certainly good, but they could also have gone straight for the BIG-1000pounds, and REALLY make that car o-so-exclusive!
I believe it's these measures, and not so much the initial tax bracket at time of purchase, that will make people think twice about what they're doing.
Again, hooray for Spain, where SUV sales have collapsed dramatically since the beginning of the year !!!!
The way things are currently going in Europe, I believe electric cars will be quite normal long before 2050!
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rgseidl 3:24PM (3/11/2008)
The UK has experienced first hand just how incredibly expensive protecting the flow of oil out of the Persian Gulf really is. Remember, Saddam wasn't responsible for 9/11 but in 2002, he did pose a latent threat to his oil-producing neighbors. He also prevented an increase in Iraqi oil production because he would have spent the proceeds on becoming an overt threat once again. Indeed, the crumbling sanctions regime made that a question of when rather than if.
Unfortunately, the US and her allies grossly underestimated how hard it would be to pacify the country after removing the dictator and his cronies. Today, Iraqi oil production is still just 2.3 mbpd. The country is the only one in the world with easily extracted reserves of crude large enough to potentially match Saudi production levels of ~10.5 mbpd.
http://www.upi.com/International_Security/Energy/Analysis/2008/01/16/analysis_iraq_oil_flow_actually_lower/2021/
With fuel taxes already high, the UK is now turning to various feebates to encourage a shift toward structural conservation, i.e. more fuel-efficient cars. In this purely financial context, CO2 emissions per km are just a convenient way to compare vehicles running on different fuels.
We'll see in November if US voters can wrap their head around the fact that Iraq is going to cost them 2-3 trillion dollars once you factor in the long-term cost of caring for the veterans. It's no longer a question of whether the US can afford to pull out - at $12 billion a month, it's how long the US can afford to stay in.
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Scatter 3:50PM (3/11/2008)
Hang tight K-U. The new budget is announced tomorrow and it's looking like you might be happy...
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Rollo 6:34AM (3/12/2008)
Just a couple of points. The 40p/mile rate only applies to people using their own vehicles for work (not company cars). This rate also only applies for the first 10,000 miles - after this it drops to 25p/mile.
While the 40p/mile rate works out pretty well, 25p/mile is not so great, considering that petrol is currently around £1.10 per litre in the UK...
Mileage rates for company vehicles are much lower and are only intended to cover fuel costs in cases where the vehicle is also used privately.
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