TEPR projects: taxes and incentives
Taxation, charges and incentives can be used to improve the environmental performance of transport in many different ways. In the UK, annual road taxes (also known as vehicle excise duty or VED) and company car tax (also known as the company car benefit in kind scale charge) are based on a car’s CO2 emissions in order to encourage the purchase and use of low emission cars.
Charges can be used to discourage the use of polluting vehicles, as with London’s Low Emission Zone (LEZ), or differentiated to encourage low emission vehicles. Examples of the latter include electric vehicles not having to pay the London Congestion Charge, and local authorities differentiating parking charges in favour of low emission vehicles. Grants can also be paid to those who buy new, clean vehicles, if these are more expensive than comparable petrol or diesel vehicles.
TEPR has worked on various reports on the use of taxes and incentives to encourage low carbon and cleaner transport:
- Fiscal instrument for low carbon transport, which was undertaken with TEPR Associate Malcolm Fergusson for the Low Carbon Vehicle Partnership (LowCVP). It involved a policy analysis and a quantitative assessment of the different future taxation scenarios. This report will be published later in 2017.
- Consideration of the impact of car and van scrappage schemes, which included a literature review and a quantitative assessment of the parameters under which a scrappage scheme might be successful in delivering reductions in CO2 emissions for cars and vans.
Previously Ian has worked on the following relevant reports:
- The environmental impact of company car taxation, which was undertaken for the European Commission and also involved Malcolm Fergusson. The report was based on a literature review and policy analysis covering a number of EU countries.
- EU – Fuel and Vehicle Tax Policy, which was undertaken for the Swedish Environmental Protection Agency and involved a literature review, quantitative assessment and policy analysis.
- Using the market for cost-effective environmental policy: Market-based instruments in Europe, which was undertaken for the European Environment Agency (EEA). Ian Skinner drafted the chapter on transport.
- Transport Taxation and Equity, which was undertaken with Malcolm Fergusson for the Institute for Public Policy Research (IPPR).
- Winners and Losers: Company Car Tax Reform, which was undertaken with Malcolm Fergusson for the Transport 2000 Trust.