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“I know that there are some who say we are going too fast,” Johnson said.
“And I say to them first that there is a force out there stronger than government. And actually a force that is stronger than business. And that force is consumer choice. That force is the market. And the market is going green.
“To adapt[Wall Street character] Gordon Gekko:green is good,green is right,green works.”
The UK wants to slash emissions by 78 per cent by 2035 and achieve carbon neutrality by 2050.
Treasury modelling released on Tuesday shows emissions from cars and vans would need to fall by 65 to 76 per cent by the end of the decade if Britain was to meet its targets.
A Policy Exchange research paper credits California’s 1990s mandate scheme as the “key driver” of battery innovation across America,even though it only operates in just 10 states. A similar scheme also commenced in China in 2019.
Under California’s scheme,carmakers are required to calculate electric vehicle ‘credits’ equivalent to 22 per cent of sales by 2025.
A battery vehicle with a range of over 560 kilometres per charge generates four credits but one with a 240-kilometre range generates two credits. The penalty for non-compliance is $US5000 ($6685) per credit.
Advocates of a sales mandates argue expanding existing incentives like one-off grants fail to consider the market and will inflict too much damage on government budgets.
The UK government’s £3000 ($5539) electric vehicle grant has already cost £800 million between 2011 and 2020 and is forecast to require another £400 million until 2023.
In Norway,tax incentives mean the purchase price of a petrol Volkswagen Golf is €34,076 ($53,000) compared to €33,286 for the electric equivalent,even though the import price of the battery model is about €10,000 more.
The scheme costs Norwegian taxpayers an estimated $US2.3 billion in annual lost revenue.
The UK Treasury modelling released on Tuesday said decarbonising the economy would put demands on public spending but the biggest impact would be lost tax revenue from fossil fuel industries.
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Treasury warned any temporary boost from an expanded carbon pricing regime would not offset the projected decline. General tax hikes may be needed to plug the gap,it warned.
Mike Hawes,the chief executive of lobby group the Society of Motor Manufacturers and Traders,cautiously welcomed Johnson’s electric vehicle plan.
“The automotive industry is putting zero-emission vehicles on Britain’s roads at pace beyond all forecasts,such is the choice and appeal of these new models,” he said.
“A well-designed,flexible regulatory framework could help maintain or even increase this pace to ensure we deliver on our shared decarbonisation ambitions.”
Electric vehicles made up just 0.7 per cent of sales in Australia last year. The federal government will release its Future Fuel Strategy,aimed at the long-term phase out of petrol and diesel vehicles,in the coming weeks.
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