RAC Foundation report calls for feebates amongst other policy mechanisms to drive adoption of ultra-low carbon vehicles
Mon 17 January 2011
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The RAC Foundation says that Government grants alone will not create the green revolution ministers want to see in the car market. This is one of the headline findings of a new report by Ecolane for the RAC Foundation which highlights policies needed to drive the adoption of ultra-low carbon vehicles.
The report finds compelling evidence that incentives targeted at the vehicle purchase point, rather than reduced rates of so-called circulation taxes like VED, will be critical to persuading drivers to buy the new generation of green vehicles which are now, and expected to remain for some time, much more expensive than equivalent petrol and diesel models.
The report says that limited subsidies of up to £5,000 for purchasers of ultra-low carbon vehicles (ULCVs) are welcome but need to be followed by more radical incentives such as a so-called feebate system under which purchasers of the greenest cars get a significant rebate – potentially several thousand pounds - while buyers of gas-guzzlers pay an extra fee over and above the showroom price.
The aim in introducing feebates would be to make the scheme revenue-neutral to the Exchequer and hence the tax-payer. Such a scheme is already in place in some other European countries including France where rebates of up to €5,000 are available to buyers of the most eco-friendly models.
According to the report, the French initiative has been so successful that after its introduction in 2008 CO2 emissions from new cars sold fell by 6%, twice the EU average.
The report also comments on policies needed to allay drivers’ fears over range, reliability, battery life and residual value of electric and other low carbon vehicles.
The report was published by the RAC Foundation and written by academic and consultant Ben Lane of Ecolane.
Commenting, Professor Stephen Glaister, Director of the RAC Foundation, said: “Before anyone is going to buy a truly green car, they need to know what they actually are. Ultra-low carbon vehicle technology is a complex area and there is a risk people will be blinded by science. Drivers also need to be made aware these vehicles are actually arriving in the showrooms and not just sitting on the drawing boards.
“However we cannot avoid the thorny issue of price. While the current subsidies are welcome they are only a start. The battle to bring down prices could be a long and difficult one, especially if we are to achieve the recommendation from the Committee on Climate Change of getting 1.7 million plug-in electric vehicles on the road by 2020. In the meantime consumers need to be reminded that many of the current range of hybrids, petrol and diesel engine come with serious green credentials.”
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