S. Korea to Implement Fuel Efficiency Ratings on New Vehicles
24 March 2008
Chosun Ilbo. Beginning in August, South Korea will impose a fuel-efficiency rating scheme on new vehicles as part of efforts to improve fuel economy and reduce greenhouse gas emissions.
The system that the Korea Energy Management Corp. unveiled Monday grades a vehicle’s fuel efficiency on a scale of one to five, five being the highest, to provide car buyers with more information on gas consumption and emissions.
The corporation said a minivan that runs 15 kilometers on a liter of diesel fuel or LPG will be given the lowest grade of one, thus ending the contradictory notion that larger vehicles boast higher fuel efficiency.
In 2004, South Korea replaced its voluntary, unenforced standard with a mandatory program that started in 2006 for domestic vehicles and 2009 for imports. The standards are 12.4 km/l (29 mpg US) for vehicles with engine displacements of 1.5 liters or less and 9.6 km/l (22.6 mpg US) for vehicles with engine displacements of more than 1.5 liters. Credits can be earned to offset shortfalls.
However, as a report from the ICCT noted (earlier post), the market share of vehicles with larger engine size has been gradually increasing since recent years, while the standards remain static from 2006 and thereafter. South Korea’s fleet average fuel economy is thus projected to decline over the next five years.
To counter this, the government says that it will tighten the fuel economy standards by about 15% (earlier post). In the absence of stricter standards, the rating system is a demand-side oriented measure.
If you normalize MPG or CO2 by engine size, you provide a push to larger engine sizes - which is presumably not what you want.
If you band by weight, you push to heavier cars. Ditto.
If you band by interior size, or seating capacity, ditto.
So perhaps, the best thing is not to band at all - just have a single limit across all vehicles (as in the EU), but this yields counterintuitive results, like compact cars being measured to the same standards as MPVs and 4x4s.
Else, you band it, and give tax breaks for the smaller bands.
Legislating for fuel economy is not a simple thing.
Taxing it is a bit easier, an up front lifetime CO2 payment (all the CO2 the car is likely to omit over a 160000 km life @ $30/ton might help.
That is more or less what a purchase tax is, except they are proportional to the cost of the car, while a lifetime Co2 payment isn't - it is just a function of the CO2/km figure (and the per ton cost).
Posted by: mahonj | 25 March 2008 at 01:45 AM
mahonj:
An up front life time carbon tax based on 20 000 Km/year x 15 years or 300 000 Km seems (almost) fair to me.
A linear rate of $30/Ton would mean something like $2000 for samll cars to $7000 for large vehicles. Most people will find $2000 way too much for small cars.
A non-linear (and/or higher) rate + making the first 3/Tons/year almost free would advantage smaller, cleaner cars.
Posted by: Harvey D | 25 March 2008 at 07:09 AM
Yeah, I don't drive that much. I would be a tax evader. Why should I pay for 12,000 miles of driving per year when I only drive 7000-8000? Oh, this is so I can subsidize the taxes of those who drive 20,000 miles a year right?
If you are going to tax on mileage, you should have it as part of vehicle registration. Check the odometer and find the actual miles driven to determine your yearly tax. Make it a part of "emissions" testing...they already check for DTC's and sometimes throw the vehicle on a dyno with exhaust analyzer - recording & reporting the odometer reading does not add very much overhead to this process at all.
Posted by: Patrick | 25 March 2008 at 10:09 AM