‘Feebate’ on car imports suggested
A ‘‘feebate’’ scheme that makes electric vehicles cheaper and high-emitting ones more expensive is one of 77 measures suggested from a mammoth inquiry into climate change.
The Productivity Commission recommended a raft of measures to create a low-emissions economy, including the ‘‘feebate’’ on car imports that rewarded electric vehicles while penalising high-emitting ones, a reformed emissions trading scheme that priced methane, and planting millions of hectares more of trees.
The Crown research body was tasked with looking into what the transformation into a different type of economy might look like, by the previous government.
Greenhouse gas emissions like carbon dioxide and methane are the principle cause of human-influenced climate change, which is likely to cause drastic damage to food production, coastlines and weather in coming decades.
The commission notes that while the transition presents ‘‘many opportunities’’ the policies needed ‘‘could increase the costs of energy, food, and transport’’ – meaning the welfare state may need to step in at a higher level to provide a ‘‘just transition’’.
One of the standout suggestions is a ‘‘feebate’’ scheme on car imports.
That would reward importers who brought low-emissions (likely electric) vehicles to the country while punishing those who brought high-emissions vehicles in.
‘‘The feebate could be a one-off transaction at the point of importing a vehicle, a yearly transaction, or a combination of the two,’’ the researchers write.
It would possibly be revenue neutral, with the fees paid by some importers used for rebates to others.
France, Sweden and Singapore have a similar scheme, but the researchers note that bringing one in would likely hurt poorer people the most, as electric vehicles remain prohibitively expensive, and the second-hand market is comparatively tiny. To combat this they propose extending the scheme further for low-income households, so the rebate on the vehicle is even higher.
The researchers note that if the Government doesn’t act quickly there will be a ‘‘lock-in’’ effect for emissions as Kiwis can take a long time to switch cars and are due to bring in an extra 1.2 million light vehicles over the next five years.
As of July there were just 9200 registered electric vehicles in New Zealand. The previous Government had a target of getting that to 64,000 by 2021.
Much of New Zealand’s emissions profile is made up of methane, mostly belched from livestock such as dairy cows.
Methane decays far faster than carbon dioxide, but is more damaging while it is in the atmosphere.
It is currently excluded from the emissions trading scheme, which puts a price on emissions by allocating companies a capped amount of tradeable units of tonnes of emissions.
The Productivity Commission advises that methane should come into the scheme, but doesn’t think it should be treated like carbon is.
A dual-cap emissions trading scheme is one of the options on the table, with different caps for short-lived gases and long-lived ones.
Climate Change Minister James Shaw welcomed the report, noting his Government was working on how to treat short-lived gases in a reformed emissions trading scheme.