A market-based incentive programme to reduce global warming emissions from new cars and trucks would cut pollution as much as 33% and will provide up to $2,500 in lifetime fuel savings from drivers, according to a new study by the University of Michigan’s Transportation Research Institute.
The study “Economic analysis of Feebates to reduce Gas Emissions from Light Vehicles from California” uses the programme design of ”The California Clean Air Discount Act” (AB 493), where the California Air Resources Board (CARB) would be required to provide one-time rebates for new passenger cars and trucks with low emmisions, paid by one-time point of purchase fees for dirtier vehicles. In the proposed legislation 25% of cars and trucks would be in a ‘zero band’ and would not qualify for rebates or surcharges.
This potential scheme at first glance is a sensible approach to encouraging greener vehicles at the car purchasing stage, rather than applying retrospective charges, as in the case with the UK’s VED approach. However, it does raise some concerns. Will people keep hold of their older more polluting vehicles for longer (which is not as encouraged under a UK scheme) and where will the money for rebates come from if the scheme is so successful that there is a significant skew towards lower C02 emmission vehicles? An interesting approach, which if adopted should be watched with interest.