Big Boys` Toys - Institute for Governance and Policy Studies

Presentation by Rod Oram to the
Institute of Policy Studies’ Seminar on
Transforming Transport in a Carbon Constrained World
Wellington, November 14th, 2007
Big Boys’ Toys
Economic, cultural, social & psychological
drivers of vehicle ownership
© 2007 Rod Oram / Email [email protected] / Phone +64 21 444 839
Agenda
• Story 1 - Drivers and their drivers
• Some stats
• Story 2 - Drivers and their choices
Big Boys’ Toys…
…I’m only here for the Segway
…for playing polo
Our addiction
• We love big cars, big engines
• Rational choice:
• Our roads are hilly, undulating, rippled, pot-holed, noisy
• …perfect for big, smooth-riding cars
• We buy lots of second hand cars
• Rational choice:
• Excellent value for money; long-lasting
• The $10,000 to $12,000 sweet-spot; eight years old
• 2nd hand imports out sell new imports
• But the downside:
• No fuel efficiency or emissions standards
• Oldest car fleet in the OECD, average age 12 years
• Wreaks havoc with fuel bills, emissions and health
Agenda
• Story 1 - Drivers and their drivers
• Some stats
• Story 2 - Drivers and their choices
More big engines
…new and used
…so fuel efficiency is falling
Used imports are rising
…and getting older
NZ new ave. age falling; used imports’ age rising
Used imports bigger share of fleet
Our elderly fleet
Higher fuel prices
…have barely deterred driving
Source of data
Agenda
• Story 1 - Drivers and their drivers
• Some stats
• Story 2 - Drivers and their choices
What if we tighten import rules?
• Covec’s study for MoT:
• Best case scenario:
• If everybody affected by new rules upgraded to a compliant
import (cost $14,000 to $20,000), fuel & emissions savings
would peak at 0.5% a year
• Worst case scenario:
• If nobody bought complaint imports but kept existing cars
running, fuel and emissions would rise by 2.5% a year
• But additional factors will change behaviour, gov’t says
• Carbon charge on fuel
: 10c litre?
• Public transport and road building levy
: 10c litre
• And fuel prices will probably go up
: 30c litre?
• And may be the NZ$ will go fall
: 30c litre?
• So petrol rises 50% to $2.50 a litre
• Then people will buy more fuel efficient, less polluting cars
Or will they?
• Me and my car:
• 1998 Honda Accord V6
• Done 140,000 km
• Drive 12,000 km year
• @ 12 litre / 100km
• = 1,440 litres
• @ $2.50 litre
• = $3,600
• + 3.4 tonnes of C02
• @ $39.70 tonne
• = $135
• Total: $3,735
• Car value: $8,000
vs. 2007 Honda Civic Hybrid
10km
12,000 km year
@ 6 litres / 100 km
= 720 litres
@ $2.50 litre
= $1,800
+ Free trees!
@ $0
= $0
Total: $1,800
Car value: $35,000
• So petrol savings will take 14 years to recoup capital cost
So, do I…
• Keep my 1998 Accord?
• Or pay $27,000 to buy a new Civic Hybrid?
• Economic rationale:
• Keep the 1998 Accord
Forget the economics…
• I care about the environment…
• …so I will buy the Civic Hybrid
• But it’s a big investment
• And my bike won’t fit in the boot
•
Rear seat won’t fold down…the hybrid batteries are in the way
• And will I enjoy driving it?
• May be…but I’m still undecided
What about the Toyota Prius?
• Even better fuel economy and emissions than the Civic
•
5 litres / 100 km = 16% better than Civic; 60% better than my Accord
• The technology is more appealing
• But the investment is even bigger
•
$33,000 after a $5,000 trade-in
on my wife’s 1997 Camry V6
• And the ride is seriously problematic
• “The Prius is an easy sell to people who care about the
environment…
• …who treat their car as an appliance.”
OK, so I’ll buy a diesel
• Good fuel economy…and if fairly new, quite clean
• Yeah, right!
Technology Solutions to these issues
Euro 3 Diesel
EU 1996
NZ 2005 new models
0.5
HC
(g/km)
Emission Regulations - Diesel
Diesels are not so clean
But are getting better
0.4
NZ Exhaust Emission
Rule 33001
New models from 1 Jan 04
Euro 2 1996
0.3
0.2
By injecting Urea Diesels can be made
to meet the petrol standards
The reason that US buyers do not buy
Due diesels
for 2009
( or
ll )and
is thatin
in EU
the US
theLEV
petrol
But it diesel regulations are the same
Diesel can not meet US LEVll standards
• costs ( engines
system
( or EU4
petrol ) cost equal to hybrids )
• requires new infrastructure
( Urea filling at stations )
Euro
4 3 / ADR 79/1
Euro
Diesel Eu from 2000
NZ NZ/Aus
2007 from 2006
0.1
ULEV
ULEV Japan
Japan
Euro4 from 2005
NZ from Jan 08
Civic
Civic Hybrid
Hybrid
0.025 HC 0.025 NOx
0.025 HC 0.025 NOx
LEVII
0.0
Petrol
& Diesel
NOx ( g/km
0.0
0.1
0.2
0.3
0.4
0.5
So, what shall I do?…
…I haven’t a clue
An ad…
• Dairy Crest launched a
$20m UK ad campaign
in July 2006…
• …for Country Life butter
• …backed by the
National Farmers’ Union
Food miles - fact & fiction
• Vital to analyse energy consumption across
the entire production and distribution chain
•
•
•
NZ production is relatively low-energy
NZ transport to market is low-energy
We need to know far more about our energy consumption
• UK Government report, July 2005:
• Of all food miles:
•
•
•
•
0.1% come from air transport
0.04% come from sea transport to the UK
40% from truck transport in the UK
50% come from consumers driving to supermarkets
Carbon reduction: Theirs vs Ours
• Theirs: Tesco’s turbines:
• “Every little helps”
• Ours: MS Emma Maersk
• Launched 2006
• Huge efficiency gain
• Uses 1 kWh of energy to
move 1 tonne, 66 km
• (An electric fire uses
2kWh)
• Previous ‘S’ class
• Uses 30% more energy
• Truck:
• Uses 12x the energy
• Boeing 747:
• Uses 130x the energy
Oops, we helped ruin the planet
• Travel: 2nd thoughts by
•
•
Mark Ellingham, Rough Guides
Tony Wheeler, Lonely Planet
• Ellingham:
•
Binge flying…
…airlines pushing an addiction
…just like tobacco industry
• Tax flying:
•
•
£100 (NZ$270) within Europe
£250 (NZ$800) places beyond
• ‘Fly less, stay longer’
• Rough Guide to Climate Change
•
Excellent source
• Air New Zealand working on issues
•
•
Voluntary offsets coming
$150 per passenger?
Our “wingprint”
• NZ: 7th in the world by departures per 1,000 people per year
Responsible flying?
• Lastminute.com launched offsets November 2006
• Add-on…only 10% bought
• (BA started in 2005…less than 0.5% take up)
• In June, 2007, built offsets into fares
• …with an opt-out function…alongside travel insurance
• Ave cost per flight £3.85; London-Sydney £39.24 (A$96.21)
• But heavy opt-out: only 14% bought credits
• 12% on short-haul; 4% on long-haul
Getting the message out…
…is tricky