Greening Transport

Publication date: 29 September 2008

INCREASED MOTORING COSTS DON’T AUTOMATICALLY EQUAL A BETTER ENVIRONMENT!

The European Commission presented on the 8th of July a package with so-called "Greening Transport" initiatives. These initiatives are meant to steer transport towards more long-term sustainability.

In its Communication on Greening Transport, the Commission puts forward two different types of initiatives: internalising the external costs of transport (road pricing, taxation) as well as a set of complementary measures comprising regulatory instruments, infrastructure measures and research and development measures.

“The proposals published today by the European Commission will only raise the costs of motoring while not bringing any benefits to the environment” declared Wil Botman, Director-General of the FIA European Bureau.

“A proper assessment of the so-called external costs is still outstanding. The study on which the European Commission bases its policy proposals is merely a compilation of research results obtained on the basis of wrong assumptions. Moreover, an internalisation without a cost-benefit analysis is nonsense. The approach chosen by the European Commission is therefore not acceptable to the FIA” continued Botman.

“The European Commission, by persevering in its approach to internalise external costs without a proper cost-benefit analysis, contradicts the goals fixed by the Lisbon Agenda by unnecessarily burdening the European economy.”

Mobility is one of the greatest achievements of our modern European societies. The FIA believes that mobility is much too valuable to be the playground of an ideological war of unclear objectives. With its faulty approach, the European Commission seriously risks undermining Europe’s socio-economic welfare.

The FIA has on many occasions called on the European Commission to rethink its approach. Averting the negative effects of traffic is much more appropriate then charging for them. Actions to reduce environmental damage are the way forward.

Motorists face high fiscal burdens all over Europe. Since infrastructure expenditure is drastically below the revenues collected from specific motoring taxes and charges, motorists pay for external costs already. Further cost increases bear the danger of generating social exclusion and of diminishing the quality of life for European citizens.

Car owning families pay substantially more taxes to own and use their cars than for any other consumer goods or services that they purchase or use. Up to three-quarters of the pump price of a litre of fuel is tax; owning a car is taxed with annual circulation, registration and purchase taxes. Add to these taxes compulsory third party insurance, parking charges and tolls and there can be little surprise that motoring is among the biggest items of household expenditure, alongside the costs of housing and food.

The shear volume of taxes and charges extracted from motorists suggest to the FIA that, both individually and collectively, car owning families pay all of their environmental and social costs, and more.

Mobility is key to our quality of life. Like most human activities, it generates external costs, but also external benefits, such as social inclusion and economic prosperity. The benefits of transport are not included in the European Commission-financed study, while these benefits are important. A one-sided approach leads to a faulty view and to a mere increase in the price of mobility.

Technology and behavioural changes have reduced significantly the impact of cars on the environment: emissions of CO2 from transport overall is rising, but not from cars. Their CO2 emissions have been stable for ten years or more. New cars today produce a fraction of the toxic pollution of those made twenty years ago thanks to ever more stringent Euro norm regulations. All vehicles today are quieter, roads are safer with fatalities and serious injuries falling year on year in most EU countries. All of this means that the environmental and social costs of motoring are already falling, and will continue to fall.

The issue is not that motoring taxes do not cover external costs, they do. The real issue is that motoring taxes are levied with little or no focus on achieving environmental, social and consumer objectives, in particular, minimising the impact of cars on the environment, making roads safer for everyone, and -building and maintaining road networks fit for the consumers who pay for them through motoring taxes.

The European Commission’s proposals adopt a theoretical approach to the subject that has been a fantasy of transport planners and economists for over half a century. However, the existing system of unfocused, revenue-driven, motoring taxation set by finance ministers goes back more than a century and it has been fraught with broken government promises, and by broken trust between motorists and governments. Trust in government lies at the heart of the issue, not the economic theory espoused at great length by the European Commission.

The FIA will defend consumers’ interests in the debate that the proposals will generate and wants to work with the European Commission by representing the interests of 34 million car owning families across Europe.

For more information please contact:
Olivier Lenz, FIA European Bureau