The grass will be greener in 2010

When in Rome, or more accurately, when in London, do as the Londoners do. Londinium was, of course, ruled by the Romans ever so long ago, so the phrase might still apply.

If I were in Rome, I’d be in a Fiat 500, because you can’t turn a corner without one rubbing up against your shins. But as I am in London, there is only one vehicle for the task -— an Audi A4 Avant diesel.

A bit like ordering Chinese food in Paris or drinking white wine in Germany — A traveller must ground himself in the culturally specific experiences of his surrounds, otherwise what’s the point? Never laugh at an American ordering a Black Label in the fanciest Cape Town hotel again, is what I’m saying.

Anyway, with my Audi A4 Avant diesel wrapped around me, I went in search of a thoroughly British driving experience. I quickly realised the experience was less than riveting: bus lanes, cyclists, congestion charges, 30mph speed limits, permit holders parking only, six-lane traffic circles, and more signage than in the rest of the known universe. All playing itself out with an omnipotent sense of law and order, demanding total civility at all times.

I’d heard rumours of Britain’s obsession with diesel, but didn’t quite realise just how widespread the epidemic was. You get BMW 6-Series diesels, Audi TT diesels and any family car puttering around will undoubtedly be the diesel derivative. Aside from the odd patriotic Range Rover, there are no SUVs in London to speak of either. There is very good reason for this.

Aside from the fact that diesels, with their effortless bursts of torque, are well matched to Britain’s confined driving environment, all vehicles in Britain pay an annual vehicle excise duty (VED) tax based on their fuel type and carbon emissions.

The A4 Avant 2.0-litre TDi I was driving, producing 144g/km, would cost me £120 annually to tax. If I were to find myself in the 3.0-litre TDI derivative of the same vehicle, producing 46g/km more, I’d be forking out £215 annually. And if horror of horrors, I should stumble into a V8 powered Q7, producing 326g/km, I’d owe the government a massive £405 every year.

In Britain this system has been in place since 2001 and one can understand how practical, efficient station wagons have risen to such notoriety ahead of larger, less practical and far less “green” SUVs.

“Shoo,” you may be thinking to yourself, “bloody pommies”; but in less than a year, these sorts of emissions concerns are going to become a major factor for new car purchasers in South Africa as well.

As part of the national treasury’s policy of environmental fiscal reform, announced in Trevor Manuel’s previous budget review, the government will amend its ad valorem “luxury” excise duty in March 2010 to include a carbon emissions tax component.

Unlike Britain’s VED, this is not an annual tax, but it will be added to the purchase price of all new locally manufactured and imported vehicles. Ad valorem “luxury” excise duty, as we know it, has been in place since 1997 and is applied purely on the vehicle retail price.

To compensate for the emissions tax component, the base “luxury” excise duty will be amended on a sliding scale, but the inevitability is that expensive and/or high carbon emitting vehicles will be hardest hit.

Cecil Morden, chief director of the national treasury tax policy unit, assures me the goals behind this green tax will not have a damaging effect on the car industry or the greater economy.

“These measures allow for incentives for economic agents to shift to more environmentally friendly or cleaner alternatives. The aim of this tax measure is to influence taxpayers’ purchasing decisions towards the uptake of low carbon-emitting and fuel-efficient vehicles, and also help to encourage a shift to promote the use of public transport. The overall impact on the economy should be beneficial,” says Morden.

Rudi Venter, marketing communications manager for Audi South Africa, says Audi is totally behind South Africa’s greener-looking future despite the obvious challenges.

“It is going to place an additional burden for the end customer who is already having to deal with the effects of the current economic downturn. At the same time, however, we need to embrace it locally as it paves the way for efficiency models to be introduced. Moves to smaller SUVs and estates are certainly gaining momentum and these cars are generally as efficient as their passenger car counterparts,” says Venter.

Despite this, Venter still warns that government could do more to improve local fuel quality. “Consistent fuel quality remains a big concern as well as the availability of low-sulphur diesel. Audi’s ultra low-emission vehicles [TDIe models —- still under evaluation for South Africa] are all diesel powered and require high-quality fuel for the best, most efficient performance,” says Venter.

Since the green tax was first suggested, Morden says several criteria were considered for determining how the levy would work.

“There is a strong positive correlation between vehicle engine capacity and vehicle carbon emissions. One could also include vehicle fuel efficiency in determining the levy. However, given that the government and the National Association of Automobile Manufactures of South Africa have developed a passenger motor vehicle CO2 labelling scheme, which provides details of carbon emissions, it is deemed appropriate to base the levy on the emissions component.”

What this means, at the very least, is that all vehicles will have to publish their CO2 emissions, changing the way they’re advertised to the public. But by looking closer at the 2010 green tax rates it’s interesting to see which vehicles could present a significant saving to the consumer.

Consumers can search for the sweet spot that resides somewhere in the middle of next year’s green tax graph, a spot that puts a well-equipped vehicle close to or below the 140g/km emissions level, allowing them to take advantage of the reduced base tax rate on retail price.

A new 1.6-litre Ford Fiesta, for instance, sneaks under the radar at 139g/km and will only be taxed at 1.4%, resulting in a R2 500 saving. Given that the Audi A4 Avant will be over R4 000 cheaper, estate models in South Africa will finally get the respect they deserve as diesel models at least, should start to come into their own next year.

Green tax will also work to penalise inferior, previous-generation engines powering the latest of South Africa’s cut price cars. Renault’s Logan will be R2 000 more expensive thanks to its hefty 173g/km carbon emissions, for instance.

With South Africa ranking in the top 20 of green house gas emitters worldwide, it’s perhaps inevitable that such a reform be put in place, right around the time of world attention turning towards South Africa during the World Cup.

In theory, I’m all for new vehicles to be subject to a green tax. It ensures manufacturers that have been investing in research and development and striving to sell technologically advanced and thoroughly modern vehicles in South Africa will flourish.

But if the government is serious about greenhouse gas emissions, and is not just interested in taxing the few for the sake of the many, it must get serious about improving diesel quality and introducing scrapping incentives for heavily polluting cars that are 15 years or older.

It should offer exemption from open road tolling to hybrid and electric vehicles and offer high-occupancy vehicles discounts from tolling to keep the number of cars on our roads down altogether.

Moreover, it should get serious on air travel with more than this year’s paltry R60 increase on departure tax for local flights and it should also address the issue of heavily polluting buildings that account for more than 24% of South Africa’s greenhouse emissions —- a figure that dwarfs anything produced by motor vehicles.

Diesel station wagons such as Audi’s A4 Avant 2.0-litre TDi might prove popular when South Africa’s new emissions laws are enforced.

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Ray Leathern
Guest Author

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