Mandatory CO2 emissions – will Julia do enough?

Projected average CO2 emissions of the whole light vehicle fleet under a range of CO2 emission targets for new vehicles

With all the brouhaha about ‘cash for clunkers’, the mainstream media seems to have completely missed analysing a new initiative that was also announced on Saturday by the Prime Minister – mandatory CO2 emission standards for light vehicles.

Prime Minister Gillard committed the Government, if re-elected, to an obligatory average emission standard for new light vehicles of 190 g/km from 2015, and 155 g/km from 2024. This represents a 14% reduction on the 2008 level by 2015 and 30% by 2024.

This is the sort of initiative I’ve argued for before (here and here) as it recognises the reality that light vehicles (i.e. cars, SUVs, vans) will be around for a long time yet and something therefore needs to be done fast to make them more environmentally responsible.

It’s a pity the Government took the spotlight away from this worthwhile initiative by simultaneously announcing the deeply flawed ‘cash for clunkers’ scheme.

Yet the Government’s take on mandatory emissions is far from perfect. In fact it verges on feeble. The standards announced by the Prime Minister are well short of the European CO2 emissions standard, which is currently 160 g/km and by 2015 will be 130 g/km (see here).

There are significant differences between Europe and Australia so a conservative approach is to look at last year’s final report of the Vehicle Fuel Efficiency Working Group, a joint committee of the Australian Transport Council and the Environment Protection and Heritage  Council. The Working Group examined a range of scenarios for reducing emissions from light vehicles.

These Councils comprise the Federal, State and Territory Ministers for the respective portfolios and hence have a key role in the national policy-making process. The modelling was based on work done by the Bureau of Infrastructure, Transport and Regional Economics.

The most conservative short and long-term scenarios examined by the Working Group envisage a reduction in the average standard for new cars to 180 g/km by 2015 and 115 g/km by 2025. The latter is much lower than the 155 g/km announced by the Prime Minister on Saturday.

Hence the Government’s longer term target of a 30% reduction verges on the pathetic. If it opted for the more demanding 115 g/km target considered by the Working Group it could claim an almost 50% reduction over 15 years.

The accompanying graph from the report shows what impact the various Working Group scenarios would have on the emissions of the entire national light vehicle fleet. It can be seen that the failure to set a more demanding standard by 2025 would result in a much worse outcome after 15 years.

The Government’s timidity on this issue is all the more damning because all scenarios considered by the Working Group assume that a CPRS would already be in place.

A mandatory average emissions standard is a good and necessary idea in principle, but it’s hard to avoid the suspicion that, like ‘cash for clunkers’, it too was cobbled together at the last minute with little regard for real outcomes.