Forget about banning gas guzzlers – convince motorists to buy low-emission vehicles, says the new car industry’s voice.

NEW vehicle importers have begun urging the Government to introduce a feebate scheme to accelerate the uptake of low-emission vehicles.

In a move obviously designed to see off any chance of an outright ban on importing vehicles fuelled by petrol or diesel, as has just been suggested by the Green Party, the Motor Industry Association, which presents new vehicle distributors, is pushing for new policies aimed at incentivising motorists to buy passenger models with the cleanest exhaust emissions – or none at all.

Chief executive David Crawford says members are strong supporters of having effective policies to encourage the reduction of carbon emissions from transport.

The way to do that is not to introduce policies aimed singularly at limiting vehicle supply. This would happen if the Government adopted the United Kingdom’s decision to ban pure petrol and diesel vehicles from as early as 2030. More preferable is to have policies that influence demand by incentivising the adoption of low technology technologies, Crawford says.

Such policies would be effective tools so long as they were implemented in a way that addressed the price premiums the low-emission vehicles have, he adds.

And the best way to achieve that is to introduce a feebate scheme that encourages car buyers to choose vehicles that are more efficient and less polluting, through rewarding those who do by giving them a rebate on the purchase price, funded by fees added to the price of less efficient vehicles.

“Because the distribution of new vehicles in New Zealand is a derived demand model, a well-designed feebate scheme incentivises change as it influences the purchase decision,” he says.

“This in turn alters the mix of models supplied by distributors which is more influenced by what is bought, and therefore restocked, rather than policies aimed singularly at limiting supply.

“Low emission technology is expensive, so policies that address low emission vehicle affordability are likely to be the most effective tools available to the Government.”

The previous Government proposed a ‘clean car initiative’, a ‘clean car standard’ (which would be a vehicle fuel-efficiency standard) and a ‘clean car discount’ (which would apply a rebate or penalty depending on exhaust emissions).

At the time, the MIA said it welcomed sensible discussions on ways to make vehicles cleaner and greener, and it promised the new car sector would work constructively with Government to help  create the best mix of policies to achieve that outcome.

The organisation didn’t like the ‘clean car standard’, because it implied that distributors had a significant influence on what vehicles Kiwi motorists chose to buy. It claimed that policies aimed at controlling supply into our market, imposed artificial controls that could distort the market.

But the MIA was particularly keen on the proposed ‘clean car discount’, as it would send a very clear signal to consumers and would over time increase demand for lower emitting vehicles. The MIA said that in its view it would be the most powerful policy available to the Government to influence car purchase decisions.

However, later in the year the whole ‘clean car initiative’ came to a screeching halt when the kybosh was put on the proposal by New Zealand First, a partner in the then coalition Government.

The MIA is asking for the ‘clean car discount’ to get picked up again by the new Labour Government, and as originally suggested it should apply to all light vehicles of less than 3500 kilograms gross vehicle mass.

Under the MIA’s proposed feebate scheme, vehicles with CO2 outputs of 230 grams per kilometre and above would pay a penalty, those with emissions of between 100-230 g/km would be in a “neutral” zone, those with emissions of between 50 and 100 g/km – which would be some hybrids and most PHEVs - would attract a low rebate, and those with CO2 outputs below 50 g/km would attract the highest level of rebate.

“If the Government were prepared to put say $10 million a year for several years into the feebate scheme, then the level of rebate for low emissions vehicles could be higher thereby significantly increasing the rate of uptake of low emission vehicles,” says Crawford.

He adds that the level at which a fee or rebate (and the size of the neutral zone) would need to be lowered with each successive year, so that over time these would become more challenging. If the Government agreed to contribute to the rebate fund this would also reduce over time.