Select Committee on Environmental Audit Ninth Report

Reducing carbon emissions from road transport

35. Road transport is responsible for the biggest share of carbon emissions from the transport sector. In 2004 it made up around 95% of domestic transport emissions, the same percentage as 1990.[38] Within this sector, cars are responsible for over 60% of emissions, with heavy goods vehicles (HGVs) and light duty vehicles (vans) making up almost all the remainder.[39] Fittingly, most of the Department's carbon reduction policies are aimed at road transport, and in particular cars. Indeed, the Department's three main policy instruments (the Renewable Transport Fuel Obligation, Voluntary Agreement package, and fuel duty escalator), and three of the Department's four main carbon reduction priorities (reducing the fossil fuel content of transport fuel, increasing vehicle efficiency, and fostering more environmentally aware consumer choice) are concentrated here; and this could even extend to the fourth overarching priority, if and when debate on including surface transport in the EU ETS advances.

36. The Transport chapter of CCP 2006 begins with a simple explanation for why, despite the efforts of the UK Climate Change Programme since it was launched in 2000, road transport emissions have continued to rise. Growth in the economy has led to an increase in journeys by car and lorry which has outpaced progress in fuel efficient technology:

This is why road transport CO2 emissions grew by 8 per cent between 1990 and 2000 even though average new car fuel efficiency has improved by 10 per cent since 1997. And this is why forecasts indicate that road transport emissions will grow by another 8 per cent between 2000 and 2010, although the link between traffic growth and economic growth has weakened in recent years.[40]

More particularly, CCP 2006 contains the following analysis of the problem faced by the Government, and summary of the Government's response:

Carbon dioxide emissions from transport depend on three key variables:

I) the fossil carbon content of fuel consumed;

II) the fuel efficiency of vehicles; and

III) the distance travelled and the means of transport chosen.

It is essential that we address all three of these in the most cost-effective and practical way possible. To achieve this we need to take action on a range of levels and that is exactly what we are doing by developing policies for:

  • reducing the fossil carbon content of road transport fuels;
  • improving the fuel efficiency of vehicles;
  • encouraging a move towards more environmentally friendly means of transport;


  • […] developing the evidence base around the possibility of including surface transport in emissions trading schemes in the future.[41]

37. It appears to us that the accent in the Government's policies is on reducing the carbon intensity of car journeys (the net carbon emitted per unit of fuel consumed or distance driven), with the aim of this achieving net reductions in the long run by eventually overtaking the upward trend in emissions due to a continued rise in traffic, more than on limiting the number and length of vehicle journeys to achieve greater reductions in the short term. This would seem to form a clear contrast to the philosophy which this Government began with, notably reflected in the Deputy Prime Minister's remarks in June 1997: "I will have failed if in five years time there are not many more people using public transport and far fewer journeys by car. It's a tall order but I urge you to hold me to it". [42]

38. Certainly, the Government continues to pursue a range of objectives and policies which relate to constraining road use by cars and lorries. The Future of Transport White Paper, for instance, importantly acknowledged: "We must manage the growing demand for transport. While additional infrastructure will be necessary, simply providing ever more capacity on our roads and railways, ports and airports is not the answer in the long term."[43] In terms of specific policies, as is most recently set out in Climate Change: The UK Programme 2006 and The Energy Challenge (Energy Review 2006), the Government is providing "record investment in transport infrastructure, to give more people real alternatives to travelling by car", and is promoting "a package of policies entitled Smarter Choices, aimed at helping people choose sustainable travel options." The Government has also recently doubled funding of Cycling England, and has announced a programme "to ensure individuals and manufacturers have the right information and incentives to encourage them to make the most environmentally friendly choices on transport."[44] Additionally, the Department is pursuing other measures, one of the notable ones being an "exploration of the role road pricing could play, in particular through the development of local pathfinder packages which include demand management, with financial support from the Transport Innovation Fund."[45]

39. However, it is notable that neither the Future of Transport White Paper, CCP 2006, nor the 2006 Energy Review, contains any explicit statement that there should be a reduction in the number or length of car and lorry journeys (even though this would appear to be the logical conclusion from CCP 2006's analysis of one of the key factors in emissions being "the distance travelled and the means of transport chosen".) Two of the three Departmental carbon policy priorities which relate to road use (the fourth, on promoting the EU Emissions Trading Scheme, relating mainly to aviation) are concerned with reducing carbon intensity. The third - "encouraging a move towards more environmentally friendly means of transport" - implies the possibility of measures to encourage modal shift away from cars, but appears also to refer to measures to promote sales of lower carbon cars; or in other words also to relate to carbon intensity. This certainly appears to be the case from what the Secretary of State said to us under this heading - "We need to continue to help people make informed choices about when and how they travel, and what type of vehicles they choose to buy in the future"[46] - and from the transport section of the 2006 Energy Review. We could also note that of transport's largest contributions to the UK Climate Change Programme, the largest (the VA package) and third largest (RTFO) relate to carbon intensity, and that while the second largest (fuel duty escalator) does indeed relate to demand management, the Government abolished it in 1999. The fourth largest (Wider transport measures) refers to the range of transport investments made since the beginning of the Ten Year Plan, and thus encompasses the provision of alternatives to car use; however, its planned impact has now been halved from 1.6MtC to 0.8MtC. It appears to us that the first half of the Deputy Prime Minister's objective has been achieved, but, as for the latter, the emphasis is now on managing the growth of road journeys.

40. The Department's current outlook leads to a number of obvious questions to focus on: whether DfT's policies are delivering their own stated objectives; whether the Department should have bolder objectives to quicken the pace of progress in new car efficiency; and whether it should be doing more to curb the demand for road journeys. In examining DfT's road transport policies, we have followed the conceptual design common to many of the submissions we received, and divided measures into "hard" factors (affecting vehicle fuels and technology, including taxes and incentives to drive market take-up) and "soft" factors (affecting the way people drive, and their demand for car journeys). In addition, we have focused on the effects and coherence of land use planning guidance and road building policy.

Achieving reductions through "hard" measures

Voluntary Agreement package

41. The second of DfT's carbon reduction priorities is "working closely with manufacturers to deliver cleaner and greener cars", with the third being to help people make more environmentally informed choices about their transport options, including "what type of vehicles they choose to buy in the future." These apply to the Department's single largest measure in terms of carbon reductions, the "Voluntary Agreement (VA) package". This in turn comprises four main elements:

42. In addition, and complementary to the VA package, in 2002 the Government launched the Powering Future Vehicles (PFV) Strategy, designed "to promote new vehicle technologies and fuels, and ensure the involvement of the UK automotive industry in the development of new technologies."[49] This contained a main target that "By 2012, 10% of all new car sales will be cars emitting 100g/km CO2 or less at the tailpipe".[50] To help achieve this target, the Government established the Low Carbon Vehicle Partnership (LowCVP), a coalition of public, industry, and academic groups, to help to co-ordinate research and drive on innovation; and implemented a package of measures, including "TransportEnergy grants to encourage take-up of cleaner, more efficient vehicle technologies; and support for industrial and academic research, development and demonstration."[51] The Government also counts the CCT and VED reforms detailed above as counting towards the PFV Strategy. The Strategy is currently being reviewed, with a report due this year.

Progress of the VA package

43. CCP 2006 forecasts the Voluntary Agreement package to deliver 2.3MtC savings in 2010, making it by far transport's biggest contribution to the UK Climate Change Programme. However, progress has faltered since its inception, and these savings are smaller than the 4MtC originally projected. Indeed, Defra's Synthesis of Climate Change Policy Evaluations, published in April this year, reports: "Projected savings in 2010 from the transport sector have been revised downwards, based on new estimates of the GHG [greenhouse gas] emissions reductions achievable in the voluntary agreement package."[52]

44. Average emissions of new cars in the UK have certainly been declining in recent years, reaching 169.4 grammes CO2 per kilometre in 2005, a reduction of 20g/km, or 10.7%, since 1997.[53] All the same, at this rate of progress, the average will only be reduced to around 164g/km by 2008, meaning that the UK would not achieve the EU target of 140g/km until around 2022.[54] Indeed, while the European Commission envisaged progress accelerating towards the end of the agreement, CCP 2006 reports that the rate of progress has actually been slowing down in recent years.[55] In addition, the UK is lagging behind other European countries: for 2004, the UK ranked ninth out of the 13 EU states for which data are currently available, with new car emissions standing some 7g/km above, and the rate of progress since 1998-9 behind, the EU average.[56] The Department for Transport should lead the Government in taking decisive action to improve this record.

45. One of the main reasons given for this slow progress is summarised in the DTI's Updated Emissions Projections: "recent moves towards the purchase of larger and heavier vehicles will have offset some of the technical advances that improve efficiency."[57] The Society of Motor Manufacturers and Traders (SMMT) described to us how, although the industry has been making technological advances, these were being to an extent counteracted by market demand for safety and comfort features: these consume more fuel, either directly by drawing on power (such as air conditioning) or indirectly by adding weight (such as roll bars).[58] The Energy Saving Trust (EST) told us, for example, that air conditioning could increase fuel consumption by up to 25%.[59] As for why the UK is doing worse than the EU average, we were told that this stems from, first, a market preference for larger and heavier cars in the UK compared to countries such as France and Italy,[60] and second, as the Secretary of State himself put it, "the level of dieselisation in Britain [which] is significantly below, certainly, that of France" among some other European countries.[61]

46. This latter point is important because diesel engines give on average over 28% more miles per gallon than petrol,[62] and hence emit less g/km. In fact, "dieselisation" appears to be the single biggest factor in making progress towards the Voluntary Agreement's targets. The SMMT baldly states, for instance: "The improvements in average new car CO2 emissions stem from increased dieselisation of the fleet."[63] This was also the conclusion of the VIBAT authors: "The main reason […] has been diesel penetration into the car fleet".[64] At the same time, the SMMT argued that this trend towards diesel will not continue for very much longer in the UK under the present fiscal regime, in which duty on diesel is slightly higher than on petrol[65]in contrast to countries such as France and Germany, in which diesel prices are "20 to 40 per cent lower than petrol prices."[66] If this is true, it would beg the question why the Government does not directly incentivise the use of diesel relative to petrol - especially given the conspicuous success in using of duty differentials in the past, notably to transform the market for unleaded petrol. The LowCVP, however, described two potentially serious problems with seeking to increase and rely on dieselisation in order to meet the VA target. First, high and increasing demand in Europe has the potential to drive up diesel prices relative to petrol, thus dampening demand once more (perhaps especially in less mature markets for diesel such as the UK); second, diesel vehicles are worse for air quality. [67]

47. Given that increasing the proportion of new cars that run on diesel is a very major factor in the Voluntary Agreement package—transport's biggest contribution to the UK Climate Change Programme—it is surprising that the Government does not provide any direct financial incentives for diesel over petrol. While there may be concerns about the air quality implications of increased diesel use, and about availability and price of diesel in the European market, the Government should at least set out explicitly why it is not providing such incentives, and what impact their absence is having on the UK's progress towards the Voluntary Agreement target for reducing the average carbon emissions of new cars.

48. Linked to the importance of diesel use, another pronounced feature of the way in which the Voluntary Agreement package is working in the UK is, as CCP 2006 puts it, the "increasing split between the company car market, where average emissions of new vehicles continue to fall, and that for private cars, where progress has stagnated."[68] In 2001, new company cars emitted over 2g/km more than new private cars (179g/km compared to 176.5g/km); but by 2005, this had reversed, with new company cars emitting some 5g/km less than private cars (167g/km compared to 172g/km).[69] Indeed, not only has progress of private car emissions been much slower, in 2004 average emissions from new private cars actually went up slightly. The SMMT firmly puts this difference down to the greater penetration of diesel vehicles in the company car market, something which has accelerated since the CCT reforms of 2002.[70] According to HM Revenue & Customs (HMRC), while there is a general market trend towards diesel cars, CCT reforms alone are responsible for a full third of the marked increase in new company cars that run on diesel since 2002. In addition, HMRC finds that CCT reforms have led to more people choosing smaller and lighterhence more fuel efficientcompany cars. Altogether, HMRC estimates that the net effects of CCT changes, taken on their own, are to have reduced average company car emissions by 15g/km from what they would otherwise have been, and to deliver total net savings of 0.35-0.65MtC by 2010.[71]

49. The picture is somewhat different, meanwhile, if we turn to Vehicle Excise Duty. The Government does not publish any disaggregated estimates of the carbon savings from the VA package which result specifically from its VED reforms. However, the fact that average emissions from company cars have reduced more rapidly than the average from all cars strongly suggests that VED reforms have been markedly less successful than CCT. Indeed, HMRC estimates that, since the CCT reforms were announced, some 400,000 company cars have been directly replaced by privately-bought vehicles (for which employees are sometimes receiving a cash bonus to assist with the purchase), and which on average emit 5g/km more than new company cars.[72] The implication is clearly that VED on its own does not impose nearly as effective a financial incentive to opt for a lower carbon vehicle. This was certainly the view of the Low Carbon Vehicle Partnership: "The incentives in the company car sector are significantly larger than those that bear down on the private motorist and the outcomes are similarly more obvious."[73] And indeed this is strongly backed up by DfT's own research. A study it commissioned in 2004 found that: "Key players in the industry, as well as the car drivers themselves, feel that for these initiatives to be taken up they need to 'hit people in the pocket'. The current VED scheme does not."[74]

50. Since that DfT research was carried out, the Government has made further reforms to VED. In Budget 2006 the Chancellor raised VED for higher emitting cars and reduced it for lower emitting cars. Notably, he introduced a new top band (Band G) for cars emitting over 225g/km, and reduced VED to zero for cars emitting under 100g/km (Band A). The Energy Saving Trust told us this was "a very important initial step",[75] which might help to shift the middle of the market towards Band B (101-120g/km). However, EST thought it would be less likely to have an effect at the higher carbon end, and LowCVP thought that overall the differentials were still very small in comparison to CCT, and commensurately less effective: "If you ask private consumers they normally require about £1000 to £1700 incentive before they are willing to downsize their vehicle and select a smaller vehicle. […] Vehicle Excise Duty gives you a range of between nought and about £220".[76]

51. The Government deserves praise for being the first in Europe to introduce vehicle taxes specifically based on CO2 emissions. In particular, its boldness in reforming Company Car Tax from 2002 has been rewarded by the visible progress made in that market.

52. Reforms to Vehicle Excise Duty, however, have been much less impressive, even allowing for the changes announced in Budget 2006. Tax differentials between higher and lower carbon cars must be made much wider if they are to drive market transformation. We note that in its submission to the Climate Change Programme Review, the Sustainable Development Commission stated it had "modelled the carbon savings that could be achieved through new VED rates. Our proposal is that […] that there is a £300 gap between each band. So the top band of VED would rise dramatically to £1800/yr […] and below this the bands would be at £1500, £1200, £900, £600, £300, and £0".[77] The Department should publish its calculations of resulting carbon savings from adopting such £300 differentials between Bands.

53. In particular, the new Band G is ineffective—given that it is so wide and represents so little of the purchase price of the vehicles it covers—and needs to be substantially raised in cost. As things stand (see Figure 6), the VED paid by the highest emitting 4x4s and luxury saloons in Band G represents a lower percentage of their sales price, and works out at half the cost per gramme CO2 emitted, than lower emitting hatchbacks in Band C. To take an extreme example, the VED on a Bentley Arnage V8 (495 g/km) works out at 0.1% of the sales price, and £0.42 per g/km, where for a Smart forfour diesel (121 g/km) the figures are 0.9% and £0.89 respectively. If VED were designed effectively to weight purchases towards lower carbon cars, we might expect the charge per g/km to shift down markedly as it moves through the bands. This is clearly not the case - other than for the newly reformed Band B, which EST singled out for praise. (While it is obviously even more the case for the new Band A rates as well, sales within this band are currently extremely limited.)

Figure 6 Highest carbon cars are taxed disproportionately lightly
VED Bands (in g/km) ModelType of car VED charge1 Sales price CO2 emissions2 per km VED charge as % sales price VED charge per g/km % new car sales by Band in 2005


Bentley Arnage R 6.75 V8 auto Petrol saloon£210 £160,203495g/km 0.1%£0.42 23.8%3
Toyota Land Cruiser Amazon 4.7 32V V8 auto Petrol 4x4£210 £50,770387 g/km 0.4%£0.54
BMW 5 Series 540i 4.0 M Sport  Petrol saloon£210 £40,045264g/km 0.5%£0.80
Ford Mondeo 3.0 Ghia X Petrol saloon£210 £22,245247g/km 0.9%£0.85


Ford Mondeo 2.0 Ghia Petrol saloon£190 £18,495187g/km 1%£1.02


Toyota RAV4 2.2 D-4D XT3 Diesel 4x4£160 £20,290173g/km 0.8%£0.92 17.2%
D 151-165BMW 3 Series 320d 2.0d Diesel saloon£135 £23,485153g/km 0.6%£0.88 24.9%
C 121-150Ford Ka 1.3i Design ii Petrol 3dr hatch£100 £7,395147g/km 1.4%£0.68 30.8%
Toyota Yaris 1.3 VVT-i T3 mmt4 Petrol 5dr hatchback £100£11,290 136g/km0.9% £0.74
Smart forfour 1.5 CDI passion 95bhp5 Diesel 5dr hatch£110 £12,370121g/km 0.9%£0.89
B 101-120Ford Fiesta 1.6 TDCi Zetec Climate Diesel 5dr hatch£50 £12,295116g/km 0.4%£0.43 3.3%
Toyota Prius 1.5 VVT-i T3 hybrid Alternative 5dr hatch £30£17,790 104g/km0.2% £0.29


'No Frills' G-Wiz (fully electric)6 Alternative 3dr hatch £0£6,999 0g/km0% £0.000.0%
Sources: SMMT "New Car Registrations by CO2 performance - Report on the 2005 market"; ;

Note: Models chosen at random to illustrate a typical range of outcomes across the VED bands.

1Petrol rates are £10 higher than Alternative rates, and £10 cheaper than diesel rates, for all Bands B-G.

2By source (i.e., not taking into account the emissions from the refining or electricity generating process).

3Band G was created in Budget 2006, therefore 2005 sales figures for Band F also cover models now in Band G.

4Lowest-emitting Toyota Yaris is 119 g/km; 5lowest-emitting Smart forfour is 116g/km.

6This is currently the only Band A model currently registered for sale in the UK. According to the SMMT, 188 were sold in the first half of 2006.

54. Another feature which Figure 6 starkly illustrates is the almost total absence of available models in Band A. Indeed, progress against the central target in the Powering Future Vehicles Strategy—that by 2012, 10% of all new cars would emit under 100g/km—has so far been microscopic. Given that around 2.5 million new cars are sold each year in the UK, the Government's target would require sales of some quarter of a million low carbon cars in 2012. In 2004, the number of such sales reached a grand total of 481. In 2005, this figure declined to 467; and as of July 2006 there was only one such model available for sale at all, with sales for the first half of the year of 188.[78] Given that this model is a fully electric car, but that availability of recharging points is currently limited (Transport for London told us there were 12 in Greater London),[79] in order to help increase sales of the lowest carbon cars, the Department should work with the Energy Saving Trust to ensure that its transport fuel infrastructure grants significantly increase the availability of fuelling stations and electrobays for electric cars, among other low carbon fuels.

55. Some of the evidence we received[80] argued that one of the contributing factors to this slow progress was the Department's suspension and then closure last year of its TransportEnergy grant programmesincluding the low carbon car grant schemeas it awaited a decision from the European Commission on whether or not to give them approval under State Aid regulations. Earlier this year, the Commission approved the low carbon car programme, albeit with some conditions. In June, however, the Transport Minister, Dr Ladyman, announced that the Department would not be reintroducing these grants, as "state aid rules limit the level of grant available to 30 to 40 per cent of additional costs and it is clear that the level and number of grants available would not be sufficient to kick-start market transformation."[81] Instead, the Department will be spending the funds on "a new communications campaign to promote consumer information on buying greener vehicles and on eco-safe driving", among other green transport initiatives. In making this announcement, the Minister drew attention to research by the SMMT to the effect that, if every consumer chose the most carbon-efficient car in each segment of the market, there would be a reduction in average new car emissions of up to 30%. The implication was clear that, amongst its objectives, the Department's new information strategy will highlight such lower emitting models to potential buyers.

56. The Department's argument for scrapping its low carbon car grants is that these would only cover 30-40% of the additional purchase costs of such vehicles, and that this is not enough to achieve market transformation. This would seem to apply equally to the existing VED structure, and support the case for much higher differentials.

57. At the same time, we welcome the announcement that these grant monies will be reallocated to a new communications campaign to promote consumer information on the most carbon-efficient cars—especially since EST told us that a package of such measures was "certainly a lot more carbon effective than grant systems."[82] However, the Energy Saving Trust also told us that they had previously proposed setting up just such a package, but that DfT had turned them down. The result is that for 18 months there was neither the grants programme nor the communications campaign. This suggests a lack of focus and leadership from within the Department. In order to play a truly effective role in nurturing new technologies and achieving market transformation, it is essential that the Government is both clear in its own mind as to how to achieve its goals, and shows long term commitment to them.

58. The research by the SMMT which the Minister alluded to, that average new car emissions could this year be reduced from 169g/km to 118g/km, simply by all purchasers choosing the lowest emitting car in each class, only underlines the slowness of current progress, and the collective underperformance of the state and the market. The SMMT explained the shortfall in progress by arguing: "To some extent the technology is there, but there is a lack of propensity of the public towards buying it."[83] One of the reasons which the SMMT, in turn, gave for this was the lack of variety of models at the lower end of the scale, in particular the technical difficulties in producing mass market family cars that emit under 100g/km. EST, meanwhile, contradicted this latter point, arguing that the ultra low carbon car demonstration project showed that it was possible to produce such vehicles; it was more a case of whether there was sufficient incentive for manufacturers to develop and market them.

59. This, it appears to us, is indeed the major issue with the Voluntary Agreement package: what exactly is in it for the car manufacturers and traders? Friends of the Earth (FoE) described to us research they had carried out which shows that car firms spend much more on advertising 4x4s and other high emitting cars than smaller, lower carbon cars. This is no surprise since such cars also tend to be more expensive to buy, hence creating the potential for higher profit margins. Accordingly, FoE called for "some mandatory agreements which will have some binding force on manufacturers [….] because the voluntary approach […] has failed."[84] EST, meanwhile, described to us how the simple economic motive for promoting high carbon cars extends also to showrooms: "The incentives in terms of commission for sales people tend to be higher and therefore no matter what you do in terms of fiscal measures or information you are still going to be fighting against an economic driver which just drives those sales to continue." [85] EST, however, further gave us their proposal for how to address this:

Mr Tarboton: […] What we see as necessary is something like a "feebate" system [in which taxes on high carbon cars would pay for incentives on low carbon cars] or a certificate trading system [in which manufacturers of high emitting fleets would have to buy permits from makers of low emitting fleets] which would allow profits to be made from low carbon vehicles, and if you can change the balance to create greater profits for the kind of B rated cars than profits in the F and G bands then I think you will get more advertising, more promotion, more aspirational elements being brought into those vehicles so that people start purchasing them.[86]

We note also that the Low Carbon Vehicle Partnership supported the idea of a feebate scheme.[87]

60. There is great scope for progress using currently available technology, simply by influencing consumers to choose the lowest emitting cars in each class. But in order for this to be realised, car manufacturers and traders need to be given a greater incentive to sell more lower carbon cars, and this means a much stronger regime of sticks and carrots. We welcome the hints made by the new Secretary of State that he would consider pressing for the successor to the current EU Voluntary Agreement to be made mandatory[88] - and we urge him to do so. In addition, and in advance of a new Europe-wide Agreement, the Government should implement a feebate or certificate trading scheme, in order to give the industry a genuine incentive to develop and promote more low carbon vehicles.

61. In the meantime, given the urgent need for a step change in the take up of low carbon emission vehicles we strongly recommend that the existing differentials in VED between different categories of cars are widened substantially. These changes could be introduced at once on a revenue neutral basis and would reward consumers for making greener choices as well as encouraging manufacturers to produce more greener cars. We also urge the Government to examine whether differential rates of VAT can be charged on new cars to benefit the lower emission models.

62. A final word of caution needs to be said about the basic policy underlying the Voluntary Agreement - of relying on the reduction in average emissions of new cars as the key means of reducing net carbon emissions from transport. Our concern here is that, even if the Voluntary Agreement very substantially increases the carbon-efficiency of car travel, it is less certain when—or if—it will start reducing carbon emissions from road transport in absolute terms. The VA approach depends on drivers frequently upgrading their cars by purchasing latest models; only in this way can the decreasing emissions of new cars rapidly and significantly affect the emissions of road transport as a whole. One issue with this is what happens to the cars that have been upgraded. The number of households with more than one car has risen from 23% in 1990 to 30% in 2003, overtaking the number with no cars at all in 2000.[89] Lord Clanmorris referred us to research to show that "although cars older than 15 years represent between 30% and 35% of the numbers they are responsible for between 60% and 70% of the pollution."[90] While this was mainly in the context of air quality, it would seem reasonable to expect similar results in respect of CO2.

63. If cars with inferior g/km are not scrapped but remain on the road, then the reduction in emissions of new cars will only have a limited effect; and will in addition be offset by the simple increase in car journeys resulting, all things being equal, from an increase in the number of cars owned. Equally, another aspect of this policy that needs to be taken into account are all the resources which go into making and selling each new caras well as disposing of old ones. It is important that the sustainable production of new cars and disposal of old cars is central to whatever succeeds the current Voluntary Agreement. Finally, we are also concerned that technology is not moving fast enough—for example, Volkswagen told the EFRA Committee recently that the mass market hydrogen fuel cell car "has been a perpetual 10 or 20 years away for as long as I can remember",[91] and this was echoed to us by the SMMT.[92] This might mean that, even with mandatory regulations and a stronger fiscal regime, for a considerable time there could be a floor for average emissions, below which it is very difficult to go. This might certainly be the case once dieselisation of the UK market reaches something like saturation point. All this strongly suggests that the VA approach is not enough; it must also be complemented by measures to curb the amount that people drive.

Renewable Transport Fuel Obligation

64. The first of the Department's carbon reduction priorities is "to reduce how much fossil carbon there is in transport fuel", an objective which is mainly being implemented through the Renewable Transport Fuel Obligation (RTFO).[93] The RTFO, announced by the Government in November 2005, will require transport fuel suppliers to ensure that a set percentage of their sales are from a renewable source (which in practice, at least for a mass market and in the foreseeable future, will mean biofuelsfrom crops such as oilseed rape, wheat, sugar cane and sugar beetrather than renewably produced electricity or hydrogen). The RTFO will be introduced in 2008-09, with the obligation level set at 2.5% volume of fuel sold, rising to 3.75% in 2009-10, and again to 5% in 2010-11. The Government estimates that the net effect of reaching this 5% level will be to reduce emissions by 1MtC per year or, as it says, "equivalent to taking one million cars off the road".[94]

65. Beyond this, the Government announced in the July 2006 Energy Review that it "now intends the level of the Obligation to rise above 5% after 2011/2011 provided three critical factors are met": the development of robust carbon and sustainability standards, new fuel quality standards at EU level, and "costs to consumers being acceptable." As it expands, "If these criteria are met, and for example we were able to raise the level of the obligation to 10% by 2015, we would save up to a further million tonnes of carbon a year, equivalent to removing yet another one million cars from our roads."[95]

66. This would certainly represent substantial progress. However, groups such as the Renewable Energy Association (REA) made the argument to us that this was still lacking in ambition, and that the Department should take bold measures to accelerate progress beyond 2010. Certainly, progress in the UK is lagging behind the "reference value" targets set by the 2003 EU Biofuels Directive,[96] which envisaged biofuels making up 2% of fuel sold in 2005, rising to 5.75% in 2010. Against this Directive, the UK Government set itself a target of only 0.3% sales in 2005; and in terms of what impact this is currently having, the DTI reported in February this year: "Sales of biofuels are currently too low to impact significantly on the carbon intensity of transport."[97] Furthermore, the EU targets are expressed in terms of percentages of the energy content of fuel, rather than its physical volume—the latter being how the UK Government has chosen to frame its targets. As currently available biofuels contain less energy by volume than conventional fossil-fuel products, this means that the UK's targets are further behind the European targets than they at first appear; the REA estimates that, translated into "by volume" terms, the European 2010 target stands at 8%, compared to the UK's goal of 5%.

67. We have not examined biofuels policy in great detail in this inquirymindful of the concurrent study by the EFRA Committeeso it is difficult for us to assess in full either the net environmental benefits of biofuels or DfT's performance in advancing the market for them. However, the evidence we received clearly identified a number of key issues which the Department will need to focus on, and which we may choose to monitor in future inquiries:

§  Progress beyond 5%: One of the obstacles to increasing the level of the RTFO is current fuel standards and engine specifications, which are not guaranteed for petrol-ethanol or diesel-biodiesel blends containing over 5% biofuels. The REA's submission suggested two complementary ways forward. One is for the Government to press strongly for an early reform to the relevant EU Fuel Quality Directive,[98] so as to allow blends of 10% biofuels or higher to be approved for sale. The other is for the Government to encourage more imaginative ways of meeting a higher obligation level —such as developing the market for specialist vehicles which are designed to run on 85% or 100% biofuels (for which the fuel quality concerns pertaining to conventional engines would not apply). Since the obligation does not specify that all fuel sold must contain a set percentage of biofuels, but rather refers to an aggregate percentage of a fuel supplier's entire sales, suppliers could still increase their output of biofuels above 5% even under current fuel quality standards, by selling high blend biofuels to a dedicated market. Swiftest progress might be made by beginning with "captive fleets" (eg, local bus fleets, municipal vehicles).

§  Long term and effective financial framework: Submissions from organisations involved in the nascent UK biofuels industry (such as British Sugar) stressed the need for the Government to provide long term commitments to this policy in order to encourage investment.[99] In addition to this broader point, the REA underlined the importance of the level at which the Government sets the RTFO "buy out" price, in order to ensure that oil companies are incentivised to invest in biofuels.[100] Specifically relating to the fuel duty differential which biofuels enjoy, the Freight Transport Association cited the need to avoid a repeat of the Government's treatment of Liquid Petroleum Gas (LPG), which for environmental reasons was given a significant duty differential in the late 1990s, only for this differential to be narrowed from 2004 onwards following a reassessment of its environmental benefits - leaving "operators who invested in this technology high and dry".[101]

§  Ensuring biofuels come from sustainable sources: Sustrans issued "some words of caution" by arguing that different biofuels sources have varying environmental impacts, and that: "Very few of these produce a net gain in carbon savings across the total system." The Environment Agency, while welcoming the use of biofuels, developed this point, recommending that the Government focus grants on options with the lowest environmental impact, and suggested that: "A labelling certification scheme would enable buyers at the point of sale confidently to choose biofuels with the lowest overall environmental impact across the whole-life cycle and allow the fuels with the best environmental performance to be treated differently, for example for tax purposes."[102] In terms of which options to favour, the Sustainable Development Commission (SDC) strongly recommended the use of agricultural waste products (including crop and forest residues and animal wastes), as the main source for biofuels, as the best means of validating carbon savings and minimising the potential impacts on biodiversity and water tables, while having the additional benefit of productively managing a waste stream.[103] Currently, however, the technologies for converting waste to liquid biofuels (second generation biofuels) are not yet commercially available.

68. On the sustainability of biofuels, we have previously recommended that only biofuels which are from sustainable sources be rewarded with Renewables Obligation Certificates.[104] Accordingly, we welcome the announcement in CCP 2006 that "the Government is developing a robust carbon and sustainability assurance scheme as part of the Obligation. Obligated companies will be required from day one to report on the level of carbon savings achieved and on the sustainability of their biofuel supplies."[105] However, it is unclear whether such a scheme will simply examine the specific sources of biofuels bought for distribution in the UK, or whether it will assess the sustainability of the entire biofuels output of producers which are supplying the UK among other countries. In other words, it is not clear whether the proposed assurance scheme is intended, not just to assure the sustainability of biofuels imported into the UK, but to have an effect on global biofuels production. The Government should emulate the leadership it has shown on sustainable timber, and work to establish a rigorous international standard on sustainable biofuels production and procurement.

Fuel duty escalator and national road pricing scheme

69. The fuel duty escalator was a Treasury commitment to automatically increasing fuel duty rates above inflation in each Budget. Introduced in 1993 at a rate of 3% above inflation, it was increased to 5% in 1995, and again to 6% in 1997, before being abolished in Pre-Budget 1999. CCP 2006 projects the combined effects of these duty increases, in terms of an ongoing reduction in demand for road fuel, as still delivering annual savings of 1.9MtC in 2010, making it transport's second biggest contributor to the UK Climate Change Programme. Given the effectiveness of this policy, we are disappointed that since the escalator was abolished, the Chancellor has only raised fuel duty twice, in 2000 and 2003—and this was simply in line with inflation in both cases. In a recent debate, the Financial Secretary explained that this had had the effect of cutting fuel duty by 7 pence per litre in real terms since 1999.[106] Indeed, CCP 2006 projects that the ten years from 2000 will see lower real fuel prices than the previous decade, and that this on its own will raise emissions by over 1MtC by 2010.

70. When we pressed the Secretary of State on why the Government has abandoned such an effective policy, he suggested that it had been introduced, by the previous Government, as much simply to raise revenue as to achieve environmental ends.[107] If this was an attempt to suggest that the fuel duty escalator was never a truly effective environmental policy and that its abolition had not weakened the Climate Change Programme, then the Secretary of State is surely seeking to have his cake and eat itconsidering that he is still counting its ongoing effects towards his argument that transport is responsible for a quarter of the Government's carbon reductions.

71. The fuel duty escalator has played an important role in helping to reduce the increase in CO2 emissions from road transport. Given the transport sector continues to present seemingly intractable problems of emissions growth, the Government should seriously reconsider the case for annual increases in fuel duty, with appropriate exemptions for lower carbon fuels, and accompanying investments in public transport to provide revenue neutrality. Given the huge sensitivities of this issue, particularly at a time of high oil prices, there can be few more urgent issues on which those who have argued for an all-party consensus on climate change policy should now focus their attention.

72. Another policy instrument which, though several years away from possible implementation, has received much recent attention is a potential national road charging scheme. As it is generally understood, this would utilise satellite technology to charge all road users for the specific journeys they made. It would thus be possible to vary charges, according to both type of vehicle and time and place of journey. The central issue with such a scheme is whether it would be aimed primarily at cutting congestion, or whether it would be equally or mainly targeted at reducing carbon emissions. The danger with the former is that by optimising road use it could actually increase the volume of traffic overall, and with it emissions of CO2;[108] and these effects would be intensified if road charges were offset by reductions in fuel duty, as is sometimes mooted. In this context we were surprised and disappointed in the Transport Minister, Dr Ladyman, for his reported comments from a recent conference: "We have to keep focused on the main prize, congestion. It's complex enough to design a system to deal with congestion without trying to tackle environment issues as well. That doesn't mean that at some point in the future we won't see how we can bring the two together."[109]

73. In terms of the evidence we received on this subject, it was notable that the Low Carbon Vehicle Partnership believed that failing to include an environmental objective in such a scheme would be a "missed opportunity".[110] Friends of the Earth pointed to research from the IPPR which showed "that a revenue-raising road pricing system could reduce carbon emissions from road transport by 8% whereas a revenue-neutral system […] would increase emissions by 5%".[111] The Social Market Foundation (SMF), meanwhile, argued that since the rise in road emissions since 1990 has come disproportionately from HGVs and vans, one of the main functions of a road charging scheme should be to differentiate between freight and private traffic—and between the least and most polluting lorries and vans. The SMF cited an example from Switzerland as demonstration of the potential of such a scheme:

[T]he Swiss LSVA lorry charge is based on distance, weight and emissions class. By explicitly incorporating emissions and weight classes into the charge, the Swiss scheme was able to optimise freight and fleet management; to encourage consolidation and cooperation within the industry; and to improve allocative efficiency and thus lowering the trend in mileage for HGVs. Annual increases of 7% in HGV mileage in the years before the charge were followed by a 4% drop in 2001, a further 3% decline in 2002 and no change in 2003. Emissions of NOX, CO2 and PM10 are predicted to drop 6-8% by 2007.[112]

74. Considering this latter point, it is particularly disappointing that the Lorry Road User Charge, which was scheduled to be introduced from 2007-08, was cancelled last year, to be incorporated into a future scheme (covering all road users) that is still some years away.[113] Commenting on this earlier this year, the Transport Committee concluded:

Lorry Road User Charging was expected to contribute to the congestion, air quality and greenhouse gas targets. The Department is already struggling to achieve these two environmental targets, and the abandonment of this scheme may prevent them being met. Unfortunately the Department told us it had not attempted to quantify what reduction in pollution would result from a Lorry Road User Charging scheme with the capacity to differentiate charges according to emissions standards, the sort of scheme which Government was procuring. […] This has been an embarrassing muddle which might have been avoided with appropriate foresight.[114]

Again, this is especially disappointing, considering there is no equivalent of the Voluntary Agreement package for vans and lorries, despite these having highest rising emissions.

75. We strongly support the introduction of a national road user charging scheme as soon as technically possible—and would support the revival and early introduction of the formerly proposed Lorry Road User Charge. However, it is absolutely vital that such a scheme is designed to reduce carbon emissions, not just congestion. We welcome the recognition in CCP 2006 that demand management on the road network can play a role in encouraging a move towards more environmentally friendly means of transport.[115] We were also reassured by the Secretary of State in his evidence to us. When pressed by questions from the Chairman on road pricing and its potential use to tackle climate change as well as congestion, the Secretary of State made clear the high level of priority he will accord to climate change in his Department. However, the comments from the Transport Minister (as set out in para 72 above) are clearly at variance with this and raise questions as to where the Department's actual priorities lie.

76. Putting Dr Ladyman's comments to the Secretary of State, we asked Mr Alexander why the Department seemed to view reducing congestion rather than cutting carbon emissions as a higher priority in a future road pricing scheme. He responded that "I do not see the two areas of work as being exclusive", before stressing that a feature of the London Congestion Charge was its accompanying investment in public transport alternatives to the car, leading him to argue:

Mr Alexander: […] My strong sense is that congestion charging will have to come to be seen, if it is to become acceptable not just to the motoring public but to the general public, to be part of a wider package of measures so that you address issues of network management but at the same time you give people genuine choices. […] If we are to secure a consensus on the issue of road pricing, an absolutely key element of that will be being able to strengthen public transport, which of course has environmental impacts, and so in that sense while it is important to recognise road pricing's potential contribution to the challenge of congestion, I do not see it as being inimical to the work that we are taking forward in terms of carbon emissions.[116]

We welcome his clarification that the government appreciates that road pricing can address both climate change and congestion.

77. The only explicit reference which the Secretary of State gave to using road pricing to reduce carbon emissions was the need to accompany such a scheme with improvements in public transport. He stated that this "of course has environmental impacts" - but this would only be true if public transport improvements resulted in fewer journeys by cars, in particular high carbon cars.[117] (Moreover, this would have no effect on reducing emissions from road freight.) The Secretary of State has not yet said whether or not the road pricing mechanism itself would be designed to reduce carbon emissions, either through reducing the absolute volume of car and lorry journeys, or reducing the carbon intensity of these journeys, or both. In particular, he has not yet given his views on whether a national road pricing scheme should be revenue-neutral or revenue-raising,[118] nor whether it should be designed to increase the costs of motoring relative to lower carbon modes, or more particularly whether it should penalise higher carbon cars and lorries relative to lower emitting vehicles. The Secretary of State must clarify his position on this, and make an unequivocal commitment to using road charging markedly to reduce CO2 emissions. Failure to do so would undermine any claims DfT has to take climate change seriously.

Achieving carbon reductions through "soft" measures

78. One of the key conclusions of the VIBAT study was that technology and associated fiscal measures to drive its take up would not be enough on their own to drive significant cuts in transport emissions in the short to medium term. Instead, programmes such as the Voluntary Agreement needed to be accompanied by a varied package of demand management measures. In 2004 DfT published a study entitled Smarter Choices: Changing the way we travel which identified a range of options for reducing car use; altogether, these were projected to reduce UK traffic levels by up to 11% by 2014. Among the options put forward were: schemes in which local authorities construct travel plans with schools and workplaces to help to rationalise commuting, and promote low carbon modes of transport while disincentivising car use; travel planning for individuals and families, to show how they could personally benefit from available walking, cycling, and public transport options; and car sharing schemes, whether formal car clubs that people can join, in order to drive a vehicle as and when they need without owning one, or measures to promote the sharing of car journeys such as high occupancy vehicle lanes. The academic team behind the Smarter Choices paper submitted a memo to us, recommending that the key measures in the shorter term included:

[C]hanges to the planning system to make workplace travel plans more rigorous and effective, fiscal changes to make travel planning more attractive to companies and an overhaul of Government policy on parking. For personalised travel planning, priority should be given to assisting local authorities in building internal capacity to deliver large-scale programmes.[119]

79. Given that the range of Smarter Choices measures do not require large material infrastructure projects, they can deliver significant carbon (and congestion) reductions rapidly and cost-effectively. We welcome the Department's announcement of forthcoming campaigns to promote eco-driving, its expansion of the Travelling to School Initiative, and its increase of funding of Cycling England.[120] But it must broaden and accelerate implementation of such measures, and set itself an ambitious target of CO2 savings to be achieved as a result. In conducting promotional campaigns, the Department should also learn from Transport for London's experience in using advertising to promote individual choice of low carbon modes of transport. Eco-driving should be incorporated into the driving test, and eco-driving simulators (such as used widely in the Netherlands) should be used in schools to ingrain such habits from an early age.

80. Several of the memos we received argued very strongly for a reduction of speed limits, given that fuel efficiency decreases markedly at higher speeds. Slower Speeds Initiative, for instance, argued that reducing the speed limit on motorways to 60mph, and properly enforcing it, would cut emissions from cars by 0.82 MtC a year, reducing their emissions overall by 18%; and that simply enforcing the existing 70mph limit would reduce CO2 emissions from cars on motorways by around 0.45MtC a year.[121] SDC, meanwhile, reported that: "France enforced strict speed limits on main motorways in 2004 and succeeded in reducing carbon emissions by 19% and accidents by 30%."[122]

81. We asked the Secretary of State why, if this were the case, the Department were not taking such action. We received the interesting information from one of his officials that a proposal to reduce to 60mph or rigorously enforce the existing motorway speed limit (quantified by Department officials in our evidence session as delivering annual savings of 0.8MtC or 0.56MtC respectively), had been discussed within Government for inclusion within CCP 2006but had been withdrawn following concerns as to the costs in manpower and finances of policing it.[123] We asked the Secretary of State whether this policy could not be delivered more cheaply by fixing speed cameras on motorway bridges. His reply suggested to us that, ultimately, the overriding reason why this policy was not included in CCP 2006 was a fear of popular antagonism.[124]

82. We understand the Government's reluctance to lower the motorway speed limit, or rigorously enforce the current 70mph limit, given the likely public controversy such a policy would provoke. However, compared to the potential danger which this could help to avert, proper enforcement of the legal speed limit would be a trivial incursion on personal liberty. The Government cannot forever duck the hard decisions in its duties to face up to "the greatest long-term challenge facing the human race", in the words of the Prime Minister. In matters of such grave importance, the Government does a disservice to future generations by running scared of critical tabloid headlines. Beyond its direct impact, a new policy on speed limits would help to raise awareness of the reality of climate change, and of the need for everyone to take action on it. Finally, in considering a design for a national road charging scheme, the Government should choose one that could cost-effectively aid enforcement of the motorway speed limit.

Land use planning and road building

83. One of the most effective means the Government has of constraining emissions from road transport is to reduce reliance on car use through planning regulations which can shape the areas in which people live. Residential developments that are more densely populated, include a mix of local shops and public services, and feature good public transport links and favourable provision for walking and cycling, will necessarily give rise to fewer car journeys than their opposite. SDC told us that improvements in land use planning, to favour such good examples of development, could result in reductions in traffic of up to 2% even by 2010.[125] They warned us, however, that some developments in the housing growth areas (under the Government's Sustainable Communities plan) exhibited a "failure to embed sustainable transport practices into the community, [such] as the provision of good bus services".[126] The memo from Living Streets, meanwhile, expressed concern that the former ODPM, now Department for Communities and Local Government (DCLG), appeared to be backtracking from its previous position on the use of planning to minimise car usage.[127] The memo from the VIBAT authors developed this point, arguing that since changes in travel behaviour are often the result of wider policy changes "e.g. land use planning, the centralisation of health facilities or "widened choice" in education"it was vital for different agencies and strategies to work together to reduce the demand for car travel. They concluded, however, "There is little current evidence of this."[128] The Department for Transport and the Department for Communities and Local Government must work more closely together to ensure that new developments, especially in the housing growth areas, are designed to minimise car use. Planning policy, in particular, should include specific measures for reducing road journeys.

84. Cycling in the UK is certainly on the increase: in London, trips by bike have increased by 50% in five years to 450,000 per day, while use of the National Cycle Network (covering 10,000 miles of urban and rural pathways) rose last year by 15% to 232 million journeys.[129] The Government has recently announced a doubling of Cycling England's budget to £30 million over the next three years, [130] which will assist this, for instance, by providing:

More money for the cycling Links to Schools project—which ties in schools to the wider 10,000 miles of the National Cycling Network reducing need for school children to cycle on busy roads. 70% of the links to schools built by the end of 2005 were off-road; Funding to support the new more rigorous cycling proficiency test fit for the 21st century not the 1970s. Potentially training a further 100,000 children to a new, tougher standard including on-road training.[131]

85. But this is still building from a very low base: Britain has one of the lowest rates of cycling in the EU, with only 2% of all journeys made by bike. The Netherlands comes first, with a rate of 27%. For this reason we studied Dutch cycling policy and planning in some detail. We were impressed with Houten, the new town we visited that was designed specifically to make cycling the primary mode of transport, but the extremely extensive top-down planning requirements involved do not necessarily make it an example that couldor perhaps even shouldbe copied widely in the UK. More widely and easily applicable was the general public policy commitment to cycling in Holland, as evidenced by the widespread provision of cycling lanes and new and secure bike parking facilities. Accordingly, we warmly welcome the announcement of increased funding for Cycling England. But the Department should accelerate progress by implementing lessons from the Dutch commitment to continuous improvement of cycling infrastructure.

86. A number of memos we received criticised the way in which, even though the Department has made many high profile statements acknowledging that more road capacity leads to more traffic and CO2, and agreeing that "we cannot build our way out of congestion",[132] it is still committed to an ongoing series of major road building projects. The continued importance attached by the Government to road building is highlighted by the fact that the Prime Minister drew attention to the "Thirty five major road schemes [that] have been completed since 2001" as one of the Department's key successes in recent years, in the letter of appointment he sent to the new Secretary of State.[133]

87. Several submissions criticised Government policy, not simply for being incoherent and leading to increased emissions, but for being governed by a guidance and appraisal regime which was at best faulty and at worst biased. Salisbury Transport 2000, for instance, argued that a local road proposal had been approved on the basis that, while it would result in increased carbon emissions, these would only represent a fraction of national emissions, and therefore would not make a major contribution to national targets. As the submission argued, if all road projects were assessed individually in this way, then surely all would be approved on CO2 groundsleading to a much larger aggregate impact. Sustrans, meanwhile, drew attention to reports that, of all bids for capital funding under the Regional Transport Strategies, 72% were on roads, while in fast-growing areas such as the South East and the East Midlands, the figure was 95%.[134]

88. We were unimpressed by the Secretary of State's defence of the Government's record on road building. His first argument was that all of the Highway Agency's road improvement projects this decade would only lead to an increase of 0.1MtC, a tenth of the net figure projected to be saved by the RTFO. His second was that, through the Regional Transport Strategy system, different regions had been given the freedom to decide most of their own infrastructure priorities, so that they could make bids for capital funding for public transport projects if they wanted to.

89. Following our session with the Secretary of State, we received supplementary evidence from the Department which set out in some detail the Department's systems for estimating the carbon impacts of proposed new road projects, and for appraising such proposals overall.[135] However, we also received a copy of a report, prepared for Transport 2000 and other parties by consultants Steer Davies Gleave, which cast doubt on their accuracy and fitness for purpose. In view of this conflicting evidence, we recommend that the Department's estimates of CO2 emissions arising from road proposals should be subject to independent audit. Furthermore, given that, by its own admission, more road space leads to more traffic and emissions, the Department should deliberately apply more stringent criteria to appraisals of proposals for the construction of new roads relative to lower carbon alternatives, such as the combination of public transport improvements and demand management measures.

90. Allowing regions the freedom to nominate projects for funding seems mainly to have resulted in a very high proportion of bids for road projects, although there have also been some major public transport proposals such as the Manchester Metrolink extensions. This is hardly surprising, considering the evidence we heard from Transport 2000:

Regions have been asked to give advice on the priorities within the regions and they had to give advice on the basis of which trunk road, local road or local public transport schemes were worth having and rail schemes were completely excluded on the grounds that the office of the rail regulator had to go through a detailed exercise to allocate precisely the different costs of the railway to each individual line and region before you could even think about doing that, which we thought was specious really. There are some good rail projects out there which could stand comparison with road.[136]

The Government should ensure that infrastructure proposals from both national agencies and local authorities are governed by a more integrated planning and appraisal process, and that rail proposals are assessed alongside competing road proposals. In putting forward and assessing the merits of different proposals, such a process should take into account the transport needs of each region as a whole, while assessing the combined national impact of such proposals on the UK's overall carbon reduction targets.

38   DfT, Transport Trends: 2005 Edition, p 86  Back

39   DfT, Transport Trends: 2005 Edition, pp 92-3 Back

40   Cm 6764,p 61


41   Cm 6764, p 64 Back

42   John Prescott MP, quoted in the The Guardian, 6 June 1997. (Emphasis added.) Back

43   DfT, The Future of Transport: a network for 2030, Cm 6234, July 2004, para 8, p 13 Back

44   Cm 6887, paras 6.26-31, pp 130-1 Back

45   DfT, Delivering better transport: Priorities for 2006-07 to 2008-09, para 8.1, p 22, Back

46   Q 646 Back

47   Defra, Synthesis of Climate Change Policy Evaluation, p 68 Back

48   DfT, Annual Report 2006, p 268 Back

49   DfT, description of July 2002 Powering Future Vehicles strategy document, Back

50   This corresponds to the current VED Band A. Back

51   DfT, Powering Future Vehicles: The Government Strategy Second Annual Report, October 2004, para 2.2, p 9 Back

52   Defra, Synthesis of climate change policy evaluations, para 1.25, p 15 Back

53   Society of Motor Manufacturers and Traders (SMMT), UK New Car Registrations by CO2 Performance: Report on the 2005 market, p 1 Back

54   Ev38 Back

55   Cm 6764, p 66 Back

56   SMMT, UK New Car Registrations by CO2 Performance: Report on the 2005 market, p 27 Back

57   DTI, UK Energy and CO2 Emissions Projections: Updated Projections to 2020, February 2006, para 33, p 26 Back

58   Ev28 Back

59   Q 147 [Mr Veitch] Back

60   Ev40 Back

61   Q 680. "Dieselisation" refers to the proportion of the national car parc that runs on diesel. Back

62   DfT, Transport Statistics: Great Britain 2005, October 2005, Table 3.4, p 52 Back

63   SMMT, UK New Car Registrations by CO2 Performance: Report on the 2005 market, p 3 Back

64   Ev2 Back

65   Q 103 Back

66   Q 107 [Mr Archer] Back

67   Q 110 [Mr Archer] Back

68   Cm 6764, p 66 Back

69   Email from SMMT to Environmental Audit Committee staff, 3 July 2006 Back

70   SMMT, UK New Car Registrations by CO2 Performance: Report on the 2005 market, p 13 Back

71   HM Revenue & Customs (HMRC), Report on the Evaluation of the Company Car Tax Reform: Stage 2, March 2006, ,p 4


72   HMRC, Report on the Evaluation of the Company Car Tax Reform: Stage 2, p 23


73   Q 94 [Mr Smith] Back

74   DfT, Assessing the Impact of Graduated Vehicle Excise Duty: Qualitative Report, March 2004,, p 4 Back

75   Q 135 [Mr Tarboton] Back

76   Q94 Mr Archer Back

77   Sustainable Development Commission, Climate Change Programme Review: SDC Submission, May 2005,, p 5 Back

78   Q 86 [Mr Archer]; email from SMMT to Environmental Audit Committee staff, 11 July 2006 Back

79   Ev86 Back

80   For example, Q 117 [Mr Kingston] Back

81   HC Deb, 7 June 2006, col 31WS


82   Q 163 [Mr Tarboton] Back

83   Q 90 [Mr Barnes] Back

84   Qq 582, 585 Back

85   Q137 [Mr Tarboton] Back

86   Q137 [Mr Tarboton] Back

87   Q 117 [Mr Archer] Back

88   Q 680 Back

89   DfT, Transport Trends: 2005 Edition, p 14 Back

90   Ev248  Back

91   Uncorrected transcript of oral evidence taken before the Environment, Food and Rural Affairs Committee on 8 March 2006, HC (2005-06) 965-ii, Q 132 Back

92   Qq125-6 [Mr Barnes] Back

93   In addition to the RTFO, the Government is supporting the growth of biofuels through measures such as a 20 pence per litre duty incentive (with a commitment to a three-year rolling guarantee for biofuels duty rates, offering extra certainty to support market take-up), an Enhanced Capital Allowance scheme for the cleanest biofuels production plant (still subject to State Aid approval), and a grant programme to support alternative refuelling infrastructure. Back

94   DfT, Annual Report 2006, p 268 Back

95   Cm 6887, paras 6.11-12, p 127 Back

96   Council Directive 2003/30/EC Back

97   DTI, UK Energy and CO2 Emissions Projections: Updated Projections to 2020, February 2006, para 33, p 26 Back

98   Council Directive 2003/17/EC Back

99   Ev242 Back

100   As with the Renewables Obligation, which is already operating in the UK electricity sector, obligated parties will have the option of "buying out" of their obligation through the payment of a penalty charge. Back

101   Ev277 Back

102   Ev269 Back

103   Ev354 Back

104   Environmental Audit Committee's Fourth Report of Session 2005-06, Pre-Budget 2005: Tax, economic analysis, and climate change, HC 882, para 25 Back

105   Cm 6764, p 65 Back

106   HC Deb, 4 July 2006, col 763  Back

107   Q 671 Back

108   We should note, for instance, that DTI's latest projections have revised down previous projections for emissions from road transport on the basis that increasing congestion is likely to impede the growth of traffic. DTI, UK Energy and CO2 Emissions Projections: Updated Projections to 2020, February 2006, p 65 Back

109   "Ladyman backs road pricing 'radicals'", Transport Times, 1 June 2006 Back

110   Q121 [Mr Smith.] Back

111   Ev168 Back

112   Ev349 Back

113   HC Deb, 5 July 2005, cols 172-3


114   Transport Committee, Fourth Report of Session 2005-06, Departmental Annual Report 2005, HC 684, paras 18, 20 Back

115   Cm 6764, p 69 Back

116   Q 650 Mr Alexander Back

117   In 2003 the IPPR projected that a revenue-neutral road pricing scheme would lead of itself to some increased bus use, but to even more car journeys. A revenue-raising scheme would lead to additional bus use on top, but also to decreased car journeys. IPPR, Putting the brakes on climate change, October 2003, p 28 Back

118   The Environment Agency's memo said on this: "We would be concerned if eventual schemes were revenue neutral and solely based on congestion, since this could theoretically lead to higher road transport emissions. A revenue raising scheme could cut emissions by 8 per cent in the year 2010. […] We would be concerned if the introduction of a system of limited 'hot-spot' coverage for congestion charging was combined with a scaling back of fuel duty. This would be likely to increase driving and worsen fuel efficiency in uncongested areas." Ev269


119   Ev226 Back

120   Cm 6887, para 6.30, p 130 Back

121   Ev342 Back

122   Ev354 Back

123   Q 687 [Mr Webb] Back

124   Q 693 Back

125   Ev 355 Back

126   Ev 355 Back

127   Ev301 Back

128   Ev4 Back

129   "Revolution!", The Independent, 7 June 2006 Back

130   Cm 6887, para 6.30, p 130 Back

131   "£15m pedal power boost for greener, safer, healthier travel", Department for Transport press release 061, 26 June 2006  Back

132   Cm 6234, p 44 Back

133   "Letter from PM to Douglas Alexander", 10 May 2006,  Back

134   Ev176 Back

135   Ev217-220 Back

136   Q 59 [Mr Joseph] Back

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