The Environment is Destroying the Motor Car

There's no ignoring the need to reduce emissions - in fact we all accept the need to do everything that's practically possible to reduce the damage we do to our environment. But government measures to impose so-called "green" taxes seem to have more in common with window dressing than they do with any meaningful ecological strategy. This view, expressed by The New Cars Network, is echoed widely across the motor industry.

A more joined-up thought process could create positive benefit for the environment without further de-stabilising the motor industry and fuelling inflation. The measures play to the gallery without producing the results they're supposed to return. Taxing through VED (Vehicle Excise Duty) on bigger cars may appeal if you feel envious because the guy over the road's dogs go walkies in the back of a new BMW Touring. But does it make sense to load extra overhead on the washing machine service man with 3 children next door because he bought a People Carrier? And where's the benefit for the environment in either case? The tradesman could do 30,000 miles a year but the BMW might do only 10,000.

Dealers of new cars, used cars and car leasing agents are already seeing a change in buying patterns as buyers turn to smaller, more economical cars. At first sight that looks like good news for the environment, but building a Fiat Punto doesn't soak up that much less resource than building a Ford Galaxy. Yet the Galaxy can carry seven people, nearly twice the capacity of the Fiat."

A recent Autocar article highlighted the imbalanced concentration that places the motor industry in the ecological firing line. Matt Saunders observed that little pressure is being applied to homeowners to buy more efficient central heating boilers. The article fuels speculation that government's focus on the evil automobile is driven by political rather than environmental motives. Imposing higher taxes on 4x4s looks attractive when we consider the queue of Shoguns and Freelanders outside the local primary school. But does a 4WD Fiat Panda really eat more ozone than a BMW 330?

If current taxation proposals go through, it could cost £1,000 a year to tax a 3.0 litre Mondeo ST. The Ford can return 30mpg, and it's equipped with catalysts and enough engine management wizardry to make the exhaust gases smell of summer meadows. Of course, you could sell the Mondeo and buy a 1964 Jensen CV8. The Jensen does 12mpg and belches out more pollution than Amoco Cadiz colliding with an aerosol dump, but those nice people in Whitehall won't charge you a penny in road tax.

The UK motor industry employs some 600,000 people. Its importance is reflected in the changes that have been made to year marking in registration numbers, all attempting to even out the seasonal buying peaks that distort the market when registration letters change. Yet 30,000 jobs have been lost in manufacturing since 2005. Fuel duty and other punitive taxation measures are already distorting car values. Under the proposed retrospective taxation changes, the damage to the automotive industry itself will be huge. Effectively killing the value of larger used cars registered since March 2001 means that dealers' stock values will plummet. We'll see individuals and dealers unable to keep their cars, but equally unable to sell them. Result? Perfectly good vehicles being scrapped because there will be no demand, wasting yet more energy to recycle them and of course build the "eco friendly" replacement.

Given the millions invested by motor manufacturers in cleaning up their cars' emissions, this is a disappointing and frustrating state of affairs. JATO Business Director Nasir Shah believes the industry has made incredible advances in reducing CO2 emissions. We're also seeing marked increases in recyclable content and more energy efficient manufacture. All of this environmental progress costs money. If ill-judged taxation starves the industry, the process of improving environmental performance can't be maintained.

The motor industry will continue to clean up its environmental act. Given properly considered environmental taxes we'll see ongoing improvements in fuel economy and reduced emissions. But strangling sales, pricing fuel to impractical levels and destroying second-hand value are short-sighted tactics that will take us all in exactly the opposite direction.

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