New analysis shows strong vehicle emissions standards deliver greater emissions reductions and economic benefits

From ClimateWorks Australia:

ClimateWorks Australia today called on the Federal Government to implement the most stringent light vehicle emissions standard from its draft Regulatory Impact Statement, arguing an even higher standard was achievable.

In a submission to the Ministerial Forum on Vehicle Emissions, ClimateWorks provided new analysis of the three standards being considered in the draft Regulatory Impact Statement (RIS) and their impact on emissions, fuel savings, health and overall economic benefit.

The analysis shows the most stringent target of 105 gCO2/km in the RIS would achieve significant emissions reductions, while reducing costs for Australian households and businesses, and achieving better health outcomes.

ClimateWorks Head of Implementation, Scott Ferraro said the analysis shows that the most stringent target of 105g CO2/km (Target A) will deliver 6.5 per cent of Australia’s 2030 emissions reduction target.

“Target A provides an additional 41 Mt of abatement to 2030 and 140 Mt to 2040 over Target C (135 gCO2/km) whilst delivering an additional $8.1 billion in net benefit to 2040,” he said.

“Our research shows that this is the least cost emission reduction opportunity across the economy.

“The most stringent target also delivers an additional $6.8 billion in cumulative fuel savings to 2030 and $16.7 billion to 2040, over the least stringent standard.

“For an average performing petrol vehicle, this equates to an additional fuel saving of between $197 to $295 a year for a driver doing 15,000 km a year and between $328 to $493 for a driver doing 25,000 km a year.

“Based on 2012 household energy costs data, this would have resulted in a savings in total household energy costs of up to 10 per cent and even greater savings for low income households.

“The most stringent standard will also deliver more fuel savings which reduces air pollution resulting in better health outcomes. Given that the most stringent standard will deliver 2.6 times more fuel savings than the less stringent standard, it should reduce health costs by a similar proportion. However, the introduction of new vehicle emission standards would need to occur in a way that does not increase noxious emissions.”

Mr Ferraro said given the enormous benefit derived from a more stringent standard, the Government should conduct a cost benefit analysis of an even more ambitious target.

“The Government should consider a cost benefit analysis on a standard of 95gCO2e/km by 2025, as it will deliver even greater net benefits and is technically feasible based on achievements in other markets,” he said.

Mr Ferraro said the analysis also assessed the impact of the most stringent standard being implemented from 2020 to 2025 as presented in the RIS and compared it with a two year delayed scenario.

“The analysis shows that delaying the implementation of the standard by two years will result in 18 MtCO2 of cumulative abatement being lost to 2030. This is the equivalent of losing nearly 2 per cent of the Government’s 2030 emissions reduction target,” he said.

“A two year delay would also result in new light vehicle owners paying an additional $4.9 billion in cumulative fuel costs to 2030, and additional $8.3 billion to 2040.”

Mr Ferraro said there was no reason why the Government should delay the introduction of the most stringent CO2 emissions standard for light vehicles.

“Whilst we support improving fuel quality to address noxious emissions, despite claims to the contrary, we do not need to have fuel standards in place before the introduction of standards to improve the overall efficiency of the vehicle,” he said.

“The International Council on Clean Transportation stated that the present quality of fuel available for road transport across Australia does not present any impediment to reduce vehicle emissions at rates comparable to the other regions of the world.

“Similarly, despite discrepancies between on-road and in-lab performance of vehicles, a standard will still provide significant savings to consumers and the environment.”

“And we know that every year of delay means locking in higher emissions making it harder and more expensive to catch up with the rest of the world.”

Mr Ferraro said the submission also recommended a range of complementary measures that could be implemented in support of light vehicle CO2 emissions standard to help drive efficiency gains and build consumer awareness of fuel-efficient vehicles.

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