REDUCING THE FUEL CONSUMPTION OF CARS

DRIVING DOWN THE AVERAGE FUEL CONSUMPTION OF
NEW CARS

This post considers alternatives for driving down the average fuel consumption/km of
new cars.  It is largely based on  Submission 572 to the Senate Climate Committee (John Davidson - April 2009) 


It considers the issues involved in driving down the average duel consumption of new cars and compares one "case specific" approach with emission trading and carbon tax comprehensive schemes.  A case specific approach  is an approach is an approach developed for a particular opportunity to reduce NCP (net carbon pollution).  In this example, the case the approach selected was the use of regulation and offset credit trading to control the average fuel consumption of new cars.  The attraction of this particular strategy is that it doesn't require changes in fuel price to work and gives a very predictable outcome.  By contrast, both the emission trading and carbon tax approach require an increase in the price of fuel to drive the change and the outcome will be difficult to predict.

Submission 572 argues in favour of the case specific approach rather than the "one answer fits all" approach used by both emission trading and carbon tax schemes.  The key feature of the specific case approach is that it allows quite different strategies to be used to handle different opportunities to reduce NCP.  To get a better idea of how this might work in practice see Simple action plan anyone?

3.1: Background:

Passenger vehicles accounted for 62% of transport fuel consumption in 1995 (3) with total transport responsible for 14% of total CO2 emissions in 1999 (4). Based on these figures, passenger vehicles would account for 9% of total greenhouse emissions. The average fuel consumption of passenger vehicles was 11.5
litres/100km in 2007 compared with 11.4 litres/100 km in 1963 (5).  Part of the problem is that most Australians would consider the loss of their cars as a major attack on their quality of life. To some extent this concern is due to practical considerations such as trip times, delays waiting for public transport, comfort and
security. These issues are of particular importance to those who live away from the most congested parts of large cities. In addition, for many people, cars are linked to psychological factors such as status and image. The action required to reduce NCP from people transport will need something more complex than the availability of low NCP (net carbon pollution) alternatives.
Any credible plan for reducing the fuel consumption of cars to the levels required to meet 2050 targets must include strategies for reducing average fuel consumption/km. Reducing the average fuel consumption of new cars would have to be part, if not all of this effort. Small cars are already available in Australia with fuel consumptions below 4 litres/100 km. There are no technical reasons why further reductions cannot be
made without radical changes to the car as we know it.
For example, existing plug-in hybrid technology would allow most car owners to significantly reduce petrol consumption without having to wait for technical breakthroughs or new infrastructure; e.g., an owner with the writer’s typical-working week trip pattern would achieve an average petrol consumption of less than 0.8 litres/100 km by retrofitting a 4 litres/100 km car with a plug-in hybrid able to go 35 km on battery
power alone.  (Basis 6x30 + 1x100km trips per week.)
Special features related to the use of cars that may influence the design of schemes for driving down the average fuel consumption of new cars include:

1. The relative fuel consumption of different types of car may vary considerable depending what they are used for. (For example, conventional cars may actually have better fuel consumption than plug-in hybrids if they are being used for long trips in flat countryside.)
2. Some people would be satisfied with a car designed for the efficient transport of one or two people. See for example, this extensive review of vehicles that are narrow enough to travel two abreast on a single lane.
3. The fuel consumption record for an internal combustion driven car is better than 0.03 litres/100 km (5).  One line of investigation involve producing the car of the future by converting an ultra-lite to a safe car by using controls and sensors to avoid accidents instead of merely surviving accidents.
 4. Other people, such as large families, workmen, etc. may have regular need for vehicles that can carry more people and/or bigger loads. However, there is a danger that special arrangements for these people will be used to allow others without these practical needs to indulge in their desire for gas guzzling luxury.
5. Using a simple cap on the fuel consumption of new cars to drive down average fuel consumption will increase the pressure to make special exceptions and aim for less ambitious targets.

3.2 Criteria for a Good Scheme:
1. Car manufacturers will be seeking certainty re:
   a.   Future changes in average fuel consumption requirements.
   b.   Method(s) to be used for measuring fuel consumption.
2. Car buyers might be looking for:
   a.   No increase in the price of fuel.
   b.   Low prices for fuel efficient cars.
   c.   No limit on the number of fuel efficient cars.
   d.   Fuel consumption measurement that reflects their usage pattern.
   e.   A mechanism that provides at least some option of continuing to buy cars with fuel consumptions above target.
   f. Special provisions for those who really need vehicles that can carry more people and bigger loads.
3. The Government should be seeking a system that would:
   a.   Not require any potentially destabilizing jumps in the price of fuel.
   b.   Have a positive effect on employment and economic growth.
   c.   Have a positive effect on NCP reduction efforts outside of Australia.
   d.   Give government the option of controlling:
      i.       Future values for the average fuel consumption of new cars.
      ii.      The method(s) use for measuring fuel consumption.
     iii.     Special exceptions and acceptable ways of meeting these needs.
  e.  Measures fuel consumption in a way that:
     i.      Recognizes the benefits of plug-in hybrids
     ii.      Encourages reduction of both oil imports and contribution to total NCP by making an allowance for
             the future effect of plugin hybrid electricity consumption on total NCP.
   f.   Include provisions for ongoing planning, research and development.

3.3: One Case Specific Alternative:
The following suggestion is one example of a case specific alternative that would satisfy most, if not all of the above requirements:
1. All imports would be considered to be “new cars” for the purposes of this scheme.
2. Regulations would be introduced to:
   a.   Specifying future average fuel/NCP requirements for new cars.
   b.   Specify the method(s) to be used to calculate fuel consumption/NCP including NCP allowance for    electricity consumption.
  c.   If appropriate, detail separate schemes for different classes of vehicle, location or use.
3. Supplies some mechanism for giving tradeable credits to sellers whose average fuel consumption per car is  below target.
4. Ongoing planning, research and development might be financed by fuel taxes or simply be part of a larger system.

The above suggestion provides a satisfactory way of dealing with most of the issues raised in section 3.2 above. In particular:
1. It will work no matter what happens to the price of fuel.
2. Allows the government to control the future average fuel consumption of new cars.
3. It will provide certainty for car manufacturers.
4. Gives the government the power to deal with special needs and different usage patterns.
5. The cost of fuel efficient cars will be reduced by the effect of the credit trading system.

It is difficult to predict the net effect on employment. However:
1. Any system that reduces the need for oil imports will cost jobs in the oil related industries.
2. Avoiding the need to increase fuel prices will help other parts of the economy.

3.4: Emission Trading and Carbon Tax Schemes (CTS):

The key problem with both these schemes are:
1. The price they put on carbon will increase the price of fuel for both cars and the general transport industry.
2. In the short to medium term the price of carbon will reflect the price required to drive investment in clean-electricity, not the value needed to reduce the fuel consumption of cars.
3. Provides manufacturers with no certainty re future average fuel consumption requirements for new cars.
It can be argued that increasing the price of fuel may have the added benefit of driving down total car  kilometres. However:
1. We are comparing schemes for driving down the average fuel consumption/km of new cars. Reducing kilometres travelled is a separate issue.
2. Large movements in fuel price over the last few years had little effect on total fuel consumption.

3.5 Conclusions – Driving Down Average Fuel Consumption of New Cars:

The case specific scheme described in section 3.3 was clearly superior to both ETS and CTS for driving down average fuel consumption of new cars.

5.0 REFERENCES:
1.  Reuters: “Leave falling carbon prices alone, say experts” 25 Feb 2009
2. World Business Council for Sustainable Development: “U.S. gives cap-and trade boost for climate treaty” 27 Feb 2009
3. Australian Bureau of Statistics: 4605.4 “Australian Transport and the Environment”
4. Australian National Greenhouse Inventory
5. Public Transport Users Association: “Myth: Cars are Becoming More Fuel Efficient”
6. Gizmag
7. Australian Uranium Association Publication: “Uranium, Electricity and the Greenhouse Effect”