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Transport and Climate Change: An irresistible force meets a lot of movable objects
The rapid rise in greenhouse gas emissions from transport threatens to the UK Climate Change Programme in tatters. Can the Chancellor of the Exchequer, Gordon Brown, intervene and rescue the Government and the country from ignominious climate calumny?
Total UK greenhouse gas emissions declined by 8.1 per cent from 786.3 million tonnes of carbon dioxide equivalent (MtC) in 1990 to 722.3 MtC in 2003, according to Environmental Accounts published by the Office for National Statistics (ONS) in May 2005. Greenhouse gas emissions from the transport and communication industries on the other hand increased from 64.5 MtC in 1990 to 95.7 MtC in 2003, a rise of 48.4 per cent.
Road traffic levels are over 10 per cent higher than when Labour came to power, despite Deputy Prime Minister John Prescott's now infamous 'promise', in June 1997, to reduce them. The ONS Environmental Accounts reveal that emissions from road transport increased from 113.1 MtC to 127.8 MtC from 1990 to 2003, a 13 per cent rise. Emissions from UK aviation increased from 24.1 MtC to 41.6 MtC over the same period, a 73 per cent rise.
The Department for the Environment, Food and Rural Affairs (DEFRA) will soon publish its review of the 2000 UK Climate Change Programme . In November 2004 Environment Minister Margaret Beckett was forced to admit that current policies will fail to deliver the Programme's ambitious unilateral domestic goal of a 20 per cent reduction (on 1990 levels) in UK carbon dioxide emissions by 2010. The Prime Minister seems to have all but given up on trying to control greenhouse gas emissions by fiscal or legislative means, preferring instead to put his faith in technology. "I have to say", Tony Blair told the Commons on 16th June 2004, "that in the end what is important . . . is the investment in science, technology and energy efficiency which gives us the best chance, in the long term, of combining economic growth and a reduction in greenhouse gas emissions."
Unfortunately, Mr Blair's techno-optimism is misplaced. Figures published by the Society for Motor Manufacturers and Traders (SMMT) in April 2005 reveal that last year's new cars emitted on average 171.4 grammes carbon dioxide per km (gCO2/km), an improvement of only 0.4 per cent on the previous year. It now looks unlikely that the motor industry will meet the voluntary target, agreed by the EU and the European Car Manufacturers Association (ACEA) in the late 1990s, to ensure that all new cars sold in EU member states emit on average no more than 140 grammes of carbon dioxide per kilometre (gCO2/km) (equivalent to a 25 per cent improvement over emissions levels in 1997) by 2008. Two-thirds of the way to the deadline and just over one-third of the necessary improvement has been made. At the current rate, average emissions will still be above 160g/km by 2008-9.
The Government had anticipated that improved fuel efficiency would reduce emissions from cars by 4 MtC by 2010, 22 per cent of the total savings across the economy. However, on 10th March 2004, Transport Minister David Jamieson MP told the Parliamentary Transport Committee inquiry on 'Cars of the Future' that he expected improved efficiency reduce emissions by 2.6 MtC by 2010.
A degree of techno-inertia affects the aviation industry, too. Commercial jets are now 70 per cent more fuel efficient per passenger mile than they were 40 years ago, thanks to better engines, lighter materials and more aerodynamic designs. From 1960-1970, an annual technology-induced fuel efficiency improvement of 6.5 per cent was achieved but the rate fell to 1.9 per cent during the period 1980-2000. Looking ahead, as the industry itself has acknowledged, the scope for further improvements in fuel efficiency continues to diminish. Even the 'Sustainable Aviation Group', which includes British Airways, Virgin Atlantic, Airbus UK and British Airports Authority, admits that improvements in efficiency will not keep pace with the rising number of flights. In June, Roger Wiltshire, Chairman of the Group, said "Growth in demand for air travel may well exceed growth in technology's ability to offset emissions" (The Times, 21st June 2005).
Chancellor Gordon Brown will publish his Pre-Budget Report (a kind of mini-Budget) in November. The Report, which will announce the Government's economic strategy in the run up to the next full Budget in the Spring, presents an ideal opportunity for the Chancellor to introduce three measures that would help to bring emissions from transport under control:
1. Increase all levels of
Air Passenger Duty (APD) by £10
APD was introduced by the Conservative government in November 1993 by Mr Brown's predecessor, Kenneth Clarke, who noted how "air travel is under-taxed compared to other sectors of the economy. It benefits not only from a zero rate of VAT; in addition, the fuel used in international air travel, and nearly all domestic flights, is entirely free of tax". Until more effective means of reducing aviation's global warming impacts, for instance emissions trading, a European-wide emissions charge or an international tax on aviation fuel, can be introduced, increasing APD is one of the few real short-term options open to the Chancellor. Further increases should be considered each year until a properly-designed environmental charge is introduced, whether at the national, European or international level.
2. Radically reform VED
The current Vehicle Excise Duty (VED, or 'road tax') banding system provides no real incentive for car buyers to choose smaller, more fuel-efficient cars over gas-guzzlers. Although there are currently minor differentials of £10, £20, or £30 between the greener bands, there is no differential at all between the majority of cars. The Chancellor's decision to freeze VED for the greener bands and raise it for the top two bands by £5 in his last Budget (16th March 2005), although welcome, failed to make the differential wide enough. Sales of gas-guzzlers, including large urban four-wheel drive vehicles (4x4s), have increased, while sales of more fuel efficient vehicles have fallen. According to the SMMT's April 2005 report 'UK new car registrations by CO2 performance', sales of 4x4s increased by 14 per cent in 2004 but sales of 'superminis' fell by 3.9 per cent.
Reform of VED should start with an immediate reduction for the most fuel efficient vehicles (those in Band A) to zero, with differentials of £100 up to a top rate of £600 for the most polluting (Band F) vehicles by 2008. Department for Transport studies suggest this would result in 47 per cent of prospective car buyers choosing more fuel-efficient vehicles.
3. Increase the level of
fuel duty above the rate of inflation
The November 2000 the Commission for Integrated Transport came to the blindingly obvious conclusion that "there are clear links between lower petrol prices and greater car use". Investing the revenue raised by higher fuel duty into public transport would help to redress the imbalance between the falling cost of motoring in the real terms and the rising real cost of bus and rail travel. According to the ONS Retail Price Index 2005, the overall cost of motoring fell in real terms by 11 per cent between 1975 and 2004, while over the same period rail and bus fares increased by 70 per cent and 66 per cent respectively. For those hardest hit by fuel price rises, such as people on low incomes in rural areas, council tax rebates or similar measures could be considered.
Motorists could in fact save more money by choosing a more fuel efficient car than they would save if the cost of fuel fell by 10 per cent. You can work this out for yourself at Toyota's UK website, www.toyota.co.uk, under the Prius section, where a handy tool lets you calculate how much you could save by driving a 2004 Prius compared to your current vehicle at today's fuel prices. Try changing the current cost of fuel from 89.9p per litre to 80.9p per litre (10 per cent) and see the difference.
Write to Chancellor Gordon Brown and ask him to introduce these three measures in November's Pre-Budget Report. Write to: Gordon Brown MP, Chancellor of the Exchequer, House of Commons, Westminster, London, SW1A 0AA or send an e-mail from www.foe.co.uk/campaigns/transport/press_for_change/prebudget05/index.html.