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Cars and Carbon Dioxide

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As mentioned above, CO2 is the most important of the greenhouse gases which are contributing to Climate Change. Unless action is taken to reduce greenhouse gas emissions, such as CO2, the whole pattern of the World's weather could change, increasing the frequency and intensity of heatwaves, floods, droughts and storms.

Compared to improvements in the emissions of toxic pollutants, there has been less progress on reducing CO2 from cars. For a given type of fuel the CO2 emissions of a car are directly proportional to the quantity of fuel consumed. Until recently the average fuel consumption of new cars was unchanged relative to that in the mid 1980’s. This was because while engines had become more efficient over this period, average vehicle mass had increased due to additional features to meet crash safety requirements and the widespread addition of features such as power assisted steering and air conditioning. However, there are signs that in the last few years, average fuel consumption has begun to drop in response to voluntary agreements by vehicle manufacturers to reduce CO2 emissions.

At the Kyoto Conference on Climate Change in December 1997 most developed countries agreed to legally binding targets to reduce their greenhouse gas emissions in response to warnings over global climate change. Following this the European Commission and the European Automobile Manufacturers Association (ACEA) came to an agreement in July 1998 that committed ACEA to reduce the CO2 emissions from new passenger cars by over 25% to an average CO2 emission figure of 140 g/km by 2008. This is one of the most significant industry agreements on reducing greenhouse gas emissions and it has led to more fuel efficient vehicles being brought to the market. Similar voluntary agreements have now been reached with Japanese and Korean motor manufacturers.

In the UK, a number of steps have been taken to promote the purchase and use of more fuel efficient vehicles:

  • In the March 2001 Budget the Chancellor announced the extension of the lower rate of Vehicle Excise Duty (VED) to cover cars in the Private and Light Goods (PLG) taxation class with an engine size of 1549cc or less.
  • Since March 2001, a system of Graduated VED has been in operation for new cars based primarily on their level of CO2 emissions.
  • Since April 2002, Company Car Tax has been based on the CO2 emissions of the vehicle provided to an employee for their private use.
  • In the March 2006 Budget, the Chancellor introduced a zero rate for cars with the lowest carbon emissions and a new top band for the most polluting cars.

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