by Jeanette Fitzsimons
I’m glad to see my post on the issue of vehicle fuel efficiency standards has provoked such interest. Here are a few answers to a few questions:
Kevyn, – my briefing on the $148m saved on power bills since the MEPs came in was an oral one but you could write to EECA and ask for the evidence. (Note that this was not about cars, but about standards for appliances.)
samiam – yes, we are working on the HERS funding and accreditation issues. It always was a “pilot” to be refined as we learned.
Kevyn – the Government’s proposed vehicle fuel efficiency standard of 170g/km carbon by 2015 is published in the NZ Energy Efficiency and Conservation Strategy 2007 and you will find papers about it here on the MOT website – they are leading the policy development, not EECA.
- yes, mandatory fuel efficiency labeling came in April this year. That’s a very good start as it gives consumers information but it’s not the same as a standard.
How would the Green Party set such a standard? (Strings, please give your vote pause for thought.)
First, the standard is for cars entering the country. You can’t do anything about the fuel efficiency of the cars already here other than keep them well tuned (which actually can achieve quite a bit in some cases.)
The objective is to increase the efficiency of the cars coming into the country, and so progressively raise the efficiency of the whole fleet as less efficient cars are eventually retired out the other end. It’s a slow process, which is why it is important to start soon and start bold.
There are 2 ways to do it: a Corporate Average Fuel Efficiency (CAFÉ) standard, which the US has had for many years, where importers or manufacturers have to meet the standard as an average across all their sales. Trading of overs and unders between firms is possible and desirable. It tends to increase the price of gas guzzlers and reduce the price of highly efficient cars, but as a market reaction rather than a regulation. The US stuffed up (or rather gave in to the car manufacturing lobby) and excluded light trucks so everyone just bought pickups instead of cars to evade the rule. I’ve seen them in Seattle – you can park my car in the tray and it would rattle around. They never pick up anything but a dog, two flags and two guns. But they are parked on all the streets while their owners do the shopping. It is easier here with no local manufacturing lobby, though the importers’ lobby is strong enough.
The other way is to set the average and charge every car that is worse than that a fee on registration, which pays for every car that is better to get a rebate. The two should balance out and be revenue neutral for government.
The Greens don’t have a very strong preference for either – the actual design of the system is more important than which one you use. So pragmatically, we would go for whichever other parties were prepared to support. Though the feebate risks not hitting the target, as people just choose to pay instead, so my preference is for the CAFÉ standard.
Important question is, how fast would we raise the standard? We think that 170 g/km by 2015 is not good enough, when the Europeans are already at 150 now. There is plenty of choice of cars to meet that standard. We think we should plan to catch up with the Europeans over ten years (to where they wil be then, not to where they are now) which is quite a stretch, but our kids won’t thank us for a country full of gas guzzlers when oil hits $500 bbl and when they could have had a country full of cars they can afford to run. And then there’s climate change, of course.
Published in Environment & Resource Management by Jeanette Fitzsimons on Wed, July 30th, 2008
Tags: cars, economy fuel, EECA, efficiency, MEPs, peak oil, standards
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on the trolls and those who are unable to keep on topic
I can understand stringent requirements on new cars. But most people can only afford second hand. If the restrictions on second hand vehicles are too harsh it will increase the cost of imports. This will reduce the number of people who can afford to upgrade to a newer imported vehicle, keeping the average age of vehicles high and efficiency lower than if there were no or minimal restrictions. Regulation doesn’t always work how it is supposed to.
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>>How would the Green Party set such a standard?
You’ll surely end up with a situation of an aging fleet because fewer people will be able to afford a newer model car.
>>There are 2 ways to do it:
They take no account of the frequency of use? As fuel efficiency rises, people drive their cars more.
Given US vehicle usage is down, as are new car sales (except in the fuel efficient group), it appears market forces (i.e. fuel cost) have more influence.
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Mr Dennis has hit it on the nose. Restricting vehicle imports makes the vehicle fleet older, dirtier and less safe by inflating the cost of new vehicles, and thereby newer secondhand vehicles.
Sadly the Greens see something they want – more fuel efficient vehicles in the fleet. Take their favourite solution – ban those that aren’t from entering the market. Ignore the economic consequences that the price of what they want increases as a result, meaning people hold on to less efficient and less safe vehicles for longer. Europe and the USA can afford to set these standards as they are far richer economies per capita, and the secondhand car markets are equally so, producing a minor effect. The best way to get a more fuel efficient car fleet is to get out of the way of people buying new cars.
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bluepeter: You’ll surely end up with a situation of an aging fleet because fewer people will be able to afford a newer model car.
And that would be a bad thing because? I’m not giving you shit, just genuinely interested. I would think an ageing fleet would be a shrinking fleet? Is that what you’re meaning?
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Jeanette, Thanks for the link. Both the tradeable credit scheme and the vehicle levy scheme appear to address the concerns raised by Mr Dennis and libertyscott. Importers need only continue doing what they have been doing for the last few years, shifting their vehicle mix to favour more fuel efficient models. The same number of cars can still come into the country, their average CO2 emissions will simple be lower than without the scheme.
You overlook an important element in pick-up truck/SUV CAFE saga that alters the political perspective significantly. The original exclusion of light trucks and vans from CAFE made sense in the 1970s as they were basic commercial vehicles and a small and shrinking part of the automakers market. The unit cost of getting these vehicles to comply with passenger car standards for safety, emissions or fuel economy would have had a serious impact on farmers and tradespeople. In the early 1980s Lee Iococa stumbled on the loophole when a desperate nearly bankrupt Chrysler repeated the Mustang approach to replace the traditional big American station wagon with a car-like passenger van using a front wheel drive car chassis. Although the objective had simply been to provide the interior space of a big car in a short tall “car” cheaply by putting a new body on an existing chassis the result was a vehicle classified by the EPA as a “van” and thus gave Chrysler credits with the LTV CAFE mpg rather than being penalised with the car mpg. The EPA couldn’t change the rules as they were set by congress and since these vehicles (MPVs) proved popular as car-pool vehicles it seemed best to keep the status quo. In the late 80s when Chrysler launched a limited edition luxury Jeep model and found themselves with a runaway winner on their hands the EPA repeatedly sought an amendment to get four-door light trucks classified as cars but Congress repeatedly refused because this was a class of vehicle that the was unique to the American makers and thus great for local employment and the balance of payments, etc, etc. Essentially, environmental protection lost out to economic protection. The Clinton administration was the worst offender, actually vetoing any increases in the CAFE standards because it would benefit imports. It’s a real mystery why the Bush adminitration got the ball rolling for the new CAFE standards in it’s first term. But I guess the politics of environmental protection versus economic protection is something you’ve become all to familiar with over the last decade.
I’m not overly worried about the difference in the two estimates of savings fro the MEPS. That’s to be expected with estimates over short periods for things that are hard to measure acurately. Different assumptions about the proportion of new appliances being either repacemnts or additions to existing appliances could explain the difference. The important thing is that, whatever the number might really be, it can only get bigger over time as as existing appliances die of old age.
Finally, bp needs to google “energy efficiency rebound effect” to find out just how little of the energy or money saved is spent on bigger or more appliances/cars or more use of the more efficient ones, when controlled for increases in household incomes.
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>>“energy efficiency rebound effect?
Thanks.
It seems to me the decrease in fuel usage in the US has been due to the oil price. Therefore, if a fuel efficient car makes travel cheaper, use is unlikely to drop off.
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“a fee on registration”
Ditch registration. It’s a tax without a service. I should have to register a vehicle when I buy it, fair enough, but after that what exactly am I paying for each year? ACC and administration. Load the ACC onto fuel and tell the administrators to get a real job. My vehicle has a nil ACC risk when sitting in the garage, it’s only when I use it that it poses a risk and that takes fuel. While I’m at it I’d load the cost of getting a WOF check onto fuel as well, that way a WOF check would be ‘free’. Those least able to afford WOF checks are likely to be those that have the vehicles that most need them. Any repairs would need to be paid for of course.
The more of these costs that can be loaded off the car and onto the USE of the car the sooner people will make the rational choice to get a fuel efficient one and/or use the guzzler less.
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Samiam has a point. I don’t want to lose the use of my current car, but I have considered buying a more economical car as well. However the annual costs of just having another car don’t make it worth the savings, assuming my milage stays the same.
Trevor.
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Kevyn:
“Both the tradeable credit scheme and the vehicle levy scheme appear to address the concerns raised by Mr Dennis and libertyscott. Importers need only continue doing what they have been doing for the last few years, shifting their vehicle mix to favour more fuel efficient models. The same number of cars can still come into the country, their average CO2 emissions will simple be lower than without the scheme.”
Two points here:
- “Importers need only continue doing what they have been doing” – if they are already doing it, why do we need further regulation?
- A Japanese import car dealer goes to Japan and buys what is available. If he is restricted to choosing between fuel efficient models, there will be more demand for these. The price in Japan will rise. The price in NZ will go up. Any restriction will therefore result in an increase in car price here, and will reduce the number of newer cars people buy. It doesn’t matter if the total number of cars they are allowed to import is still the same. The regulation will still push the price up.
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Oh and I forgot, I know it’s off topic but what the heck..
3rd party insurance should also be loaded onto fuel, or as a second option onto drivers, but certainly not onto cars. Again, like ACC them that use the most pose the most risk and will thus pay the most.
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Tata as released Brand New cars that is available for Just 2222$ with free Van Insurance
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