If the federal government were to decree that all new cars sold in Canada must now be Priuses or similarly priced, fuel-sipping models, imagine the reaction from Canadians.
You can’t tell us what to buy! You can’t force us to spend several thousand more on our cars!
Ah, Environment Minister Peter Kent would argue, but you’ll save hundreds every year at the pump. Trust us. We know what’s best.
But I can’t afford a Prius! What if I just drive less often and buy a bus pass? What if I car pool? Wouldn’t that be OK?
Trust us, the government says. If you want to buy a car at all, no matter how often you plan to use it, it’ll have to be more expensive.
Doesn’t seem like a particularly conservative approach, does it? Yet that’s the approach the government is taking, only it’s spread it out over the course of several years.
This week, Kent announced new fuel-efficiency standards for light-duty vehicles of 2017 to 2025 model years. These would require an average greenhouse-gas emissions reduction, for cars, of five per cent a year. With these standards, the government says, 2025 cars will use about half the fuel as 2008 cars.
Environment Canada estimates that the rules will save the average Canadian driving a 2025 model $900 per year in fuel. That’s an estimate that requires guessing the price of gas in 2025, and making assumptions about driving habits. It’s worth noting that these regulations will have the effect of lowering the cost of driving for people who own cars, so they could have the perverse effect of encouraging them to drive more. It’s a difficult prediction to make.
But let’s assume, as the government does, $900 per year, per car, in gas savings. There is also a cost side, which the government doesn’t talk as much about.
The Center for Automotive Research, in its 2011 report “The U.S. Automotive Market and Industry in 2025,” included a number of technological scenarios to improve fuel economy, and the associated price tags. Its scenario for removing five per cent per year in CO2 emissions would add an estimated $6,714, in 2008 dollars, onto the average price of a vehicle in 2025. I asked Environment Canada what its cost projections are, and was told that “the projected costs are in line with the EPA analysis.” The U.S. Environmental Protection Agency numbers I found suggest an increase of about $1,800 per vehicle for 2025 cars.
This kind of prediction, too, depends on many things, such as the kinds of technologies used to achieve the fuel efficiency. But it’s clear that the government’s regulation will cost consumers. Adding more technology to cars will make them more expensive to make, and that price will be passed along to consumers.
Kent is painting auto regulation as a “have your cake and eat it too” climate policy. Unlike the Liberals, who may or may not want a carbon tax, and the NDP, who want a cap-and-trade system, the Conservatives don’t want gas to get more expensive.
“These actions prove that we can both tackle climate change and save at the pump at the same time,” said Kent, in a not very subtle dig at the opposition parties. Look! We can reduce greenhouse gas emissions without a carbon tax!
Except the Conservative policy amounts, in its price effect, to a tax on cars — without the silver lining of money going to government or into your pocket, as it would in a revenue-neutral tax shift. Cars just get more expensive. If you happen to drive a fair bit, you’d get money back in gas savings, but it wouldn’t necessarily end up as revenue-neutral. If you don’t drive much, but like to have a car in the driveway, you’ll lose money overall from this policy.
One likely effect is that Canadians will be less inclined to buy new cars. That might eat into the anticipated environmental benefit.
So the various parties’ disagreement on climate policy comes down to this: Would you rather have more expensive gas, or more expensive cars? And hey, if things are going to get more expensive, do you want an associated reduction in income tax to go along with that, or not?
Kent’s announcement brings Canada into line with the Obama administration’s regulations in the United States.
It makes sense for the two countries to work together on this, given the integration of the auto sector. And there is nothing wrong with improvements to fuel efficiency. That’s a wonderful goal. The question is how you get there. Do you use market incentives, such as carbon pricing, to encourage consumers and companies to make better choices, recognizing that different households have different needs and priorities? Or do you force consumers to make particular choices, choices that might cost everyone more in the long run?
The governments of Stephen Harper and Barack Obama both seem to prefer option No. 2.
Original Article
Source: ottawa citizen
Author: Kate Heartfield
You can’t tell us what to buy! You can’t force us to spend several thousand more on our cars!
Ah, Environment Minister Peter Kent would argue, but you’ll save hundreds every year at the pump. Trust us. We know what’s best.
But I can’t afford a Prius! What if I just drive less often and buy a bus pass? What if I car pool? Wouldn’t that be OK?
Trust us, the government says. If you want to buy a car at all, no matter how often you plan to use it, it’ll have to be more expensive.
Doesn’t seem like a particularly conservative approach, does it? Yet that’s the approach the government is taking, only it’s spread it out over the course of several years.
This week, Kent announced new fuel-efficiency standards for light-duty vehicles of 2017 to 2025 model years. These would require an average greenhouse-gas emissions reduction, for cars, of five per cent a year. With these standards, the government says, 2025 cars will use about half the fuel as 2008 cars.
Environment Canada estimates that the rules will save the average Canadian driving a 2025 model $900 per year in fuel. That’s an estimate that requires guessing the price of gas in 2025, and making assumptions about driving habits. It’s worth noting that these regulations will have the effect of lowering the cost of driving for people who own cars, so they could have the perverse effect of encouraging them to drive more. It’s a difficult prediction to make.
But let’s assume, as the government does, $900 per year, per car, in gas savings. There is also a cost side, which the government doesn’t talk as much about.
The Center for Automotive Research, in its 2011 report “The U.S. Automotive Market and Industry in 2025,” included a number of technological scenarios to improve fuel economy, and the associated price tags. Its scenario for removing five per cent per year in CO2 emissions would add an estimated $6,714, in 2008 dollars, onto the average price of a vehicle in 2025. I asked Environment Canada what its cost projections are, and was told that “the projected costs are in line with the EPA analysis.” The U.S. Environmental Protection Agency numbers I found suggest an increase of about $1,800 per vehicle for 2025 cars.
This kind of prediction, too, depends on many things, such as the kinds of technologies used to achieve the fuel efficiency. But it’s clear that the government’s regulation will cost consumers. Adding more technology to cars will make them more expensive to make, and that price will be passed along to consumers.
Kent is painting auto regulation as a “have your cake and eat it too” climate policy. Unlike the Liberals, who may or may not want a carbon tax, and the NDP, who want a cap-and-trade system, the Conservatives don’t want gas to get more expensive.
“These actions prove that we can both tackle climate change and save at the pump at the same time,” said Kent, in a not very subtle dig at the opposition parties. Look! We can reduce greenhouse gas emissions without a carbon tax!
Except the Conservative policy amounts, in its price effect, to a tax on cars — without the silver lining of money going to government or into your pocket, as it would in a revenue-neutral tax shift. Cars just get more expensive. If you happen to drive a fair bit, you’d get money back in gas savings, but it wouldn’t necessarily end up as revenue-neutral. If you don’t drive much, but like to have a car in the driveway, you’ll lose money overall from this policy.
One likely effect is that Canadians will be less inclined to buy new cars. That might eat into the anticipated environmental benefit.
So the various parties’ disagreement on climate policy comes down to this: Would you rather have more expensive gas, or more expensive cars? And hey, if things are going to get more expensive, do you want an associated reduction in income tax to go along with that, or not?
Kent’s announcement brings Canada into line with the Obama administration’s regulations in the United States.
It makes sense for the two countries to work together on this, given the integration of the auto sector. And there is nothing wrong with improvements to fuel efficiency. That’s a wonderful goal. The question is how you get there. Do you use market incentives, such as carbon pricing, to encourage consumers and companies to make better choices, recognizing that different households have different needs and priorities? Or do you force consumers to make particular choices, choices that might cost everyone more in the long run?
The governments of Stephen Harper and Barack Obama both seem to prefer option No. 2.
Original Article
Source: ottawa citizen
Author: Kate Heartfield
No comments:
Post a Comment