Paying for the mistakes of others

IT was a piece of legislation that turned the new car market on its head. On July 1, 2008, the basis for motor tax assessment changed.

Where the amount payable had been calculated against the cubic capacity of the engine, it now was predicated on carbon dioxide emissions, a move that was championed by the Green Party when they were in coalition with Fianna Fáil.

It meant that those of us driving cars registered before that date still pay much more tax than those who bought afterwards.

My own 2.0-litre petrol 1997 Saab costs €710 a year to tax, but because it’s 20 years old, I pay quarterly in case it finally gives up the ghost.

I end up handing €200 every three months, or €800 for the year.

If I were to buy a 2.0-litre diesel car today, I very likely would pay €200 for the entire year.

Not only that, I would save hugely on fuel too, because the excise duty on a litre of diesel, at 48 cent, is 11 cent less than that levied on petrol, and diesels use less fuel too.

Governments everywhere in Europe pushed diesel cars as the way forward, and sales in most countries hovered around the four-to-one mark in favour of diesel sales.

Of course, we then discovered that while diesel is less harmful as a catalyst for climate change, related emissions of nitrous oxide have a more negative impact on respiratory health, particularly in cities, and many urban areas now have moved to ban diesel cars altogether over the next decade.

This week, the Economic and Social Research Institute concluded that an increase in the excise duty on diesel here could be justified on fiscal and environmental grounds.

Raising it to the same level as petrol would generate €522m a year in extra tax revenue, and cut carbon emissions by 2.4% and nitrous oxide emissions by 3.8%, for a total reduction in air pollution of 4.1%.

That’s all fine and dandy, but what about the people who bought into diesel because the government of the day actively encouraged it?

Once again, they are the ones who will pay for the mistakes of others.