• About this site|
• Site index|
• Contact us|
• Jobs

Review of Climate Change Policies

1 Background to the review

2 International context

3 New Zealand domestic context

4 Policy choices

5 New Zealand's strategic climate change goal

6 International setting, New Zealand position and strategy for UNFCCC COP11

7 Conclusions

References

Annex 1: Background on forestry and rules

Annex 2: The role of non-climate policies in a sustainable forestry framework

Annex 3: Policy criteria

Annex 4: The European Union Emissions Trading Scheme

Annex 5: Computable General Equilibrium Model

Glossary of terms

RELEASED UNDER THE OFFICIAL INFORMATION ACT

4.1.3 Emissions from transport

As noted earlier (Section 3.1.1), emissions from the “transport sector”, as defined by the UNFCCC [The transport sector, as defined by the UNFCCC, includes transportation of goods and people for agriculture, industry, tourism, household uses, etc. It does not, however, include use of fuel for fishing. Fishing is included in the “other sector” category with energy, under “agriculture/forestry/fishing”.], make up 18.5% of New Zealand’s annual greenhouse gas emissions in 2003. Transport, with its dependence on oil, is a significant emitter of carbon dioxide.

This section builds on the section on decoupling (Section 4.1.1). Growth in transport energy use is closely linked with economic growth. With prosperity, there is more travel and more demand for goods. In general, this is part of an improved quality of life. The challenge is not to curb people's mobility and access to goods and services, but to find more sustainable energy sources for transport and other ways of meeting people's transport needs.

This section looks at the mitigation prospects for different parts of the transport sector. It also describes the ways in which emissions reductions can be made in transport. These “change areas” are revisited in Section 4.5 as a basis for considering policy options.

Large contributors and growth areas

Transport-sector greenhouse gas emissions in 2003 totalled 13.8Mt CO₂e (Table 9).

Most of the transport emissions (87%) came from road transport. Rail, aviation and marine transport made up the balance, with aviation taking the greatest share at 8.4% of the total.

Table 9 - Transport-sector Energy Use and Emissions 2003

Sources: *Estimate based on TERNZ (2004a 2004b) ** New Zealand, Ministry for the Environment (2005b)

In terms of growth from 1990 to 2003, transport emissions have increased by 60% (Figure 33). Most of the growth has come from road transport, with diesel fuel use increasing by 215%, mainly through an increase in road freight and consumer preferences for diesel light vehicles. Petrol use rose by 26%. The other major growth area has been aviation (covering flights within New Zealand), which has recorded a 50% increase in emissions since 1990. This reflects strong growth in tourism and the increasing role of air travel for business and personal travel use.

Figure 33 - Growth in CO₂ Emissions from Transport 1990-2003

Source: New Zealand, Ministry for the Environment

In addition, a further 3Mt of CO₂ emissions resulted from international transport, 75% of which came from international aviation. Since 1990, international aviation emissions have grown by 66%. These emissions are currently not included within the Kyoto Protocol commitments.

The main drivers of transport emission growth have been:

• relatively stable (or declining in real terms) fuel prices across the period
• a strong transport component within the structure of GDP growth
• growth in vehicle numbers and a strengthening of long-term trends towards private motor vehicles as the predominant form of travel
• increased affordability and use of air travel
• little change in the overall efficiency with which energy has been used for transport
• no practicable alternative to oil products as the energy source for transport, hence no substitution with non-CO₂ energy sources.

In terms of the proportion of total transport emissions resulting from different industrial, business and household uses, precise data on the split of transport fuels is not available. Guidance is, however, given though surveys - of fleet vehicles (heavy and light), household travel and visitors. The big users are:

• heavy road freight, which consumed around 30% of transport energy in 2003 (61 PJ). A typical truck might consume 30,000 litres a year, travelling 500,000 kilometres (CRL, 2005)
• light vehicle fleets, comprising business and rental companies. These make up 15% of total emissions, providing a targeted opportunity
• household travel, including regular trips to work, which compromises an important part of household travel (Land Transport Safety Authority, 2000)
• tourists, domestic and international, are high users of transport energy. It is estimated that transport energy contributes 73% and 65% of the total individual “energy bill” for domestic and international tourists, respectively (Becken et al, 2003).

An emissions split between rural and urban road use is not available. Estimated kilometres travelled could be a proxy. An estimate for 2001 suggests about 45% of travel is on urban roads (Ministry of Transport, 2005c). However, this is a coarse comparison because the short trip and stop-start nature of urban conditions means more fuel per kilometre is consumed. On the other hand, heavy vehicle use is more concentrated on rural roads. It is estimated that roughly 25% of emissions are produced in the Auckland region and 13% in Christchurch city (NIWA, 2001).

Limitations to targeting these areas are:

• large businesses, particularly those with international counterparts and management support for energy savings, will already be looking for fuel savings, so additional effort targeting such companies may not be cost-effective
• moving freight from road to rail or coastal shipping will occur only if the alternative mode is seen as competitive in price, goes to the appropriate destination and is suited to the goods being transported
• it is often difficult to provide alternatives to private motor vehicles in rural and sparsely populated areas
• changing behaviour is not necessarily a cheap policy option because many behaviours are ingrained habits supported by perceptions of status and “what’s normal”.

Projections of transport CO₂ emissions to 2020

Projections of future transport CO₂ emissions were updated in May 2005 through the Interim Update Report which served as the basis for the recalculation of New Zealand’s Kyoto position (Ministry for Environment, 2005c). They are illustrated in Figure 34 below.

Figure 34 - Projected Increase in Transport CO₂ Emissions

Source: Ministry for Environment 2005c

In the “most likely” scenario, greenhouse gas emissions were forecast to grow by 22% from 2003 to 2012, and 38% from 2003 to 2020. “Low-emissions” and “high-emissions” projections were also developed, representing scenarios of low GDP growth/high oil prices and high GDP growth/low oil prices respectively.

The interim report was completed prior to the recent oil market instability, so the “most likely” scenario was developed under the assumption of relatively low, and stable, oil prices.

These projections assume that no additional measures to address transport emission are put in place. Of existing measures, only the effect of the announced carbon tax at $15 per tonne from 2007 is factored in. This is expected to raise fuel prices by 3% to 5%, but result in less than a 1% reduction in CO₂ emissions from transport.

Effects of recent market conditions on CO₂ emissions

Recent sharp increases in oil prices are likely to have an effect on forecast transport emissions. However, the review has not attempted to update this forecast. It will be updated in May 2006, in conjunction with the scheduled updated forecasts of New Zealand’s net emissions in relation to its Kyoto target.

The Treasury’s Pre-Election Economic and Fiscal Update (PREFU) assumes that, in the March 2006 quarter, Brent oil prices will reach a quarterly average peak of $US59.10 per barrel. This is just over $US3 higher than the assumptions in the 2005 Budget (New Zealand Treasury, 2005). However, oil prices then gradually decline, reaching $US53.60 per barrel at the start of 2009. Treasury’s March 2006 forecast remains below current [London prices for November delivery, 3 October 2005 < http://futures.fxstreet.com >] prices of $62.80. The PREFU oil price assumptions result in the price path of transport fuels to 2009 averaging some 20% to 25% higher than the price assumptions underpinning current projections. On the other hand, recent oil supply investments suggest a growing gap between supply and demand in the short term, which could drive oil prices down to $US40 per barrel or lower over this period (Cambridge, 2005).

The transmission mechanism between world oil prices and New Zealand greenhouse emissions from transport is complex. The impact of higher oil prices will transmit to domestic emissions by different mechanisms. The important ones are:

• New Zealand’s economic growth
• modal and vehicle choices by New Zealand consumers.

Growth in real annual GDP is expected to slow from a peak of 4.8% in the 2004 calendar year to 2.2% in the March 2006 year, and 2.6% in the March 2007 year. The slow-down is primarily driven by the lagged effects of higher exchange and interest rates and a slowing in net migration flows. The higher oil price assumptions in the PREFU have not significantly altered forecast New Zealand GDP growth tracks to 2009.

The magnitude of recent higher oil prices points to this price effect slowing transport emissions growth. There is evidence, although primarily anecdotal at this stage, that prices have influenced travel patterns, vehicle purchase patterns towards more fuel efficient vehicles, and fuel switching to LPG for some motorists. Further work is required to determine the magnitude of this effect. Progress on this analysis should be incorporated in the May 2006 emissions forecasts.

Overview of mitigation prospects

In looking at the prospects of reducing transport emission, priority areas to address are primarily within the road sector, which is the largest contributor to emissions. Looking at other high-growth sectors such as aviation may also be worth future consideration. However, it is important when determining an appropriate policy response to consider the impact on other government objectives such as social cohesion and access.

Overseas, a range of measures is commonly utilised, building on the co-benefits of addressing transport and recognising localised travel patterns. New Zealand may have similar opportunities. However, we also have particular circumstances, such as our geography, land use, and importation of second-hand domestic Japanese vehicles, that should be taken into consideration when assessing the prospects to reduce emissions and appropriate policies. For example, restricting imports is likely to raise the average price of vehicles, which would restrict access to private transport by low-income New Zealanders.

The availability of improved technology, use of biofuels feedstock, and opportunities for behaviour changes provide some potential to reduce emissions from fossil fuel use.

Section 4.5 discusses the effectiveness of current policies and looks at opportunities for further effort. It includes some indication of policies that are likely to give the greatest gains.

Ultimately, an enduring solution to transport CO₂ emissions must rest heavily with the technical development of zero CO₂ or carbon-neutral energy sources. However, at this stage, there is no obvious or clear pathway to a successor to our oil-based energy system. Such a technological “fix” may also be a long time arriving and entail significantly higher costs. Therefore, the process for reducing CO₂ emissions from transport should, in general, seek reductions in emissions through both technology and transport behaviour in ways that are non-discriminatory and “least cost”.

With regard to technological changes, the key points to note are:

• New Zealand is primarily a “technology taker” with respect to vehicle and fuel systems – we are largely dependent on the direction and pace of change being developed overseas
• within this overall constraint, policies (regulatory, fiscal or information based) can influence some aspects of the mix, such as the profile of vehicles imported, incentives for up-take of new technologies and the extent to which substitutes for petroleum-based fuels could be employed
• the speed of any new technology up-take is largely dictated by technology diffusion rates and the turnover of the transport fleet (ie, customer purchasing behaviour). For example, a large proportion of our vehicle fleet is aged seven to fifteen years, but vehicle use is weighted towards newer vehicles. It is estimated that the newer half of the vehicle fleet generates about three-quarters of fleet CO₂ emissions.

With regard to behavioural changes, the key points are:

• travel behaviour is largely determined by lifestyle, work, residential location and production-related factors
• in general, policy that attempts to achieve large changes in travel patterns is difficult to justify on CO₂ grounds alone. It is costly to obtain changes in lifestyle patterns. There are, however, a number of circumstances where there are CO₂ co-benefits from policies that seek to modify travel behaviour for other reasons
• behaviour change can be triggered or supported by infrastructure changes such as provision for other modes (public transport, walking and cycling), road design and urban layout
• price remains a strong influence on behaviour, although prices may need to increase significantly to trigger a response. [Based on Ministry of Economic Development’s SADEM model fuel demand exhibits low elasticity to price – for a 1% increase in petrol and diesel prices, short-term demand is expected to decrease by 0.13% and 0.09%, and in the long term, by 0.25% and 0.20% respectively] In the short term, behavioural responses to price are generally around changing trip patterns or modal shifting, while in the longer term, major capital purchases can be influenced (such as choice of vehicle or place of residence).

Policy focus

In considering reducing transport CO₂ emissions, policy must focus on achieving change in one or more of three generic “change areas”:

• improve the energy efficiency of the transport task (eg reduce the energy required for shifting freight (tonne-kilometres) and passengers (passenger-kilometre)
• change to lower-CO₂-emitting energy sources
• reduce the transport task (either the rate of growth or in absolute terms).

The key “change actions” required include a mix of technological changes to vehicle and fuel systems, and behavioural changes to transport patterns by transport users. See Table 10 below.

Table 10 - A Framework for Considering Transport Emission Reductions

* Note that these examples are not exhaustive or in any priority order. Neither are they meant to imply that CO₂ policy should be directed in this way.

Improving energy efficiency of the transport task

Improving the energy efficiency of the task can occur by shifting to less energy-intensive transport modes. Walking and cycling are the least energy intensive. For powered modes, the technical energy-efficiency of a mode is important along with the operational efficiency of the task completed (ie, the passengers or freight transported).

Technical efficiency: Fuel economy of engines has improved steadily over the past century. Internal combustion engines have become more efficient through innovations such as fuel injection systems and more recently “hybrid” systems using electric motors. Vehicle-design improvements include better aerodynamics, drive-train efficiency and the use of lighter materials. For road passenger travel, the availability of small diesel vehicles is beneficial. The fuel economy of trains, planes and ships has also developed.

Task completed (operational efficiency): For different transport trips a comparison measure is the fuel consumed per tonne/kilometre (for freight) or passenger/kilometre. For example, a vehicle carrying four people is more efficient than a single occupant. Ships are classically the most efficient and aircraft the least, but the level of occupancy or utilised freight capacity is important.

Making the most of the designed technical efficiency of the mode is also relevant. Particularly for road transport, changing people’s driving behaviour (including checking tyre pressure and regular vehicle maintenance) can have a significant effect on vehicles with high fuel consumption per kilometre – ie, big trucks and buses. Also, driving conditions (eg, gradient, friction, level of traffic and stop/start driving) is important, again, particularly for vehicles with high fuel consumption.

In maximising the opportunities for efficient passenger transport, the focus will often be trips to and within urban areas, because that is where the majority of passenger trips occur – ie, to school and work. The availability of public transport, therefore, becomes important.

Energy sources

The fuel used to power the mode is relevant for greenhouse gas emissions.

LPG and CNG produce lower carbon dioxide emissions compared with petrol per unit of energy, with around 10% savings available. However, small LPG vehicles are not currently available so their use is limited to high-power, high-mileage uses. The CNG market shows no sign of recovering popularity following the decline in the late 1980s that was triggered by problems with fuel standards and the lower oil price at the time.

Use of electricity in some modes may provide a greenhouse gas benefit, depending on the source of the electricity. At present, about 70% of electricity generation in New Zealand is from renewable sources that are essentially low- or zero-CO₂. Electrification will provide net CO₂ benefits so long as marginal new electricity production and distribution has lower emissions per unit of energy required compared with fossil-fuelled engines.

Biofuels provide the best opportunity for New Zealand, because of the available feedstocks. We have raw materials, by-products of the dairy and meat industry, that can be converted into biofuels. Biofuels are considered to be carbon neutral because there is assumed to be a closed carbon cycle operating: carbon released during combustion is subsequently sequestered through the biological processes of producing the biofuels feedstock of plant and animal material.

Liquid biofuels produced from renewable biological products are not currently commercially available in New Zealand.

Biofuels feedstocks that could be fully on line by 2012 are:

• domestic production of fuel grade bioethanol from whey to replace 0.3% to 0.5% of petrol consumption though petrol blends up to levels of 10%
• domestic production of biodiesel, primarily from tallow from the meat industry, to replace 5% of diesel, equivalent to around 5 PJ, most likely through 5% blends (B5).

Research shows that approximately another 5 PJ of bioethanol could be produced from other waste streams (paper, straw, waste kiwifruit material) (Waste Solutions Ltd, 2005). This is most likely to come on stream after 2012. The technology is available, but the costs of collection and production are unclear. This could give an annual biofuels component of 10 PJ per annum, the equivalent of around 5% of the fuel consumed annually by transport.

Other additional sources of biofuels could be available before 2012; eg, using coppiced willow and wood waste to produce ethanol. However, advice from EECA is that time is required for refining technical processes, raising capital and establishing production units. Other sources of domestic biofuels, such as algal oil or other crops, are on the horizon but at the research stage.

Compared with other countries that have biofuels, New Zealand has an advantage in that its sources of biofuels are by-products of the agricultural industry or waste products. This contrasts with production of biofuels from rape seed, sugar cane and other crops that generally have a high life-cycle energy demand.

Reduced travel

Reducing travel covers lowering the number of trips; eg, linking trips, reducing the length of trips through changing destinations and reducing the tonnage of goods carried.

There are some short-term mitigation prospects; eg, using teleconferencing to conduct a meeting instead of flying between cities, or just being smarter about combining trips and freight logistics. Other changes have a more long-term focus. Trip distance is often a function of place of residence and destination: generally, as cities sprawl, commuting times and distances increase along with fuel used. Such changes to urban form and the siting of services can, however, take time to evolve and affect travel behaviour.

Assessment of current policy settings for transport

Predicting future emissions reductions is difficult. There is little empirical evidence in New Zealand. There is also uncertainty about the potential longer-term effect of fuel price increases on transport behaviour.

As discussed in Section 4.5, policies have had very little “bite” in terms of emissions reductions. The two main reasons for the relatively low impact of current measures to date are:

• a number of policy initiatives are yet to be implemented – eg, the announced carbon tax and website information on vehicle fuel economy. Also, the recent very large increase in Government expenditure on public transport (where CO₂ emissions reductions are a co-benefit) is generally yet to be realised in terms of implemented action because of investment lag effects
• policy actions that have been implemented have relatively low influence across the whole sector. For example, the EnergyWise Rally and walking school buses [See Glossary.], although successful in their objectives, have limited foci.

While small in effect at this stage, the non-price measures such as information provision, provisions for biofuels and infrastructure developments are all useful building blocks for possible future activities.

The anticipated effects of the recent oil price increases have been instructive, but it will be a while before the behaviour changes resulting from the price rises are understood. If price rises are maintained, they are likely to have a greater impact on CO₂ emissions than the range of policies pursued to date.

Overseas experience with emissions mitigation

We can look to other countries to see the effectiveness of polices and also consider their application to New Zealand. The opportunities available to New Zealand from overseas experience may be tempered by our geographical situation and the fact that our economy specialises in transporting heavy, bulky produce around the world.

Globally, transport emissions have been increasing, driven by increases in kilometres travelled and vehicles – particularly private motor vehicles. Many developed countries, as well a number of developing countries, have fiscal, infrastructure, research, education and regulatory measures to target transport emissions. Generally, a portfolio approach is taken, recognising that action needs to occur on a number of fronts and also that multiple benefits can be achieved though reducing reliance on oil and the private motor vehicle.

The most cost-effective ways of reducing total CO₂ emissions from the transport sector are through measures affecting the cost of fuel, the cost of energy-inefficient vehicles or the efficiency of road haulage. However, it is recognised that radically different alternatives to today’s technologies will be required and over the long term. Also, reducing the kilometres travelled will need to be a component of any successful policy package.

To date, no country has shown evidence of reducing total emissions from transport, although progress is being made in some areas – eg, improving the average fuel economy of the road fleet, as in the United Kingdom, or affecting the number of single-occupant vehicle trips through providing and incentivising alternatives. Typically, the fuel economy achieved by technical developments is outweighed by the increased consumer preference for larger cars. However, Europe and the United States appear to be doing better than New Zealand in the sense that their rates of transport emissions growth are lower than New Zealand’s.

Policies

Pricing is a common tool used for fuel, vehicles, parking and road use. The price of fuel has been used to increase the cost of transport. For example, Norway has a CO₂ tax on fuelsand the United Kingdom used fuel excise to send a very strong price signal, with the result that around 75% of the cost of petrol at the pump is government tax (Grubb, 2003). In the United Kingdom, the change to the fringe benefit tax system is attributed with achieving significant improvements to vehicle purchase and use. The change corrected a perverse incentive that rewarded businesses for having vehicles that travelled the most kilometres..

Differentiated registration fees for first acquisition and regular annual fees have been put in place in many European countries. CO₂ emitted per kilometre, weight and engine output are used as differentiation characteristics. Empirical evidence is that the effectiveness of registration fees in these countries is not proven. Research in the European Union and the United States notes that the majority of improvements are associated with vehicle manufacturers improving the average fuel efficiency of the vehicles on the market, as opposed to customers choosing the more fuel-efficient vehicle (Covec, 2005a).

Where a country has large urban areas with significant congestion problems, road congestion pricing is seen as providing significant co-benefits through reducing transport greenhouse emissions (eg, in Australian cities and in London). Addressing congestion is seen as benefiting air quality, reducing travel time and assisting the form and functioning of cities (Canada, Institute for Research on Public Policy, 2004). Actual CO₂ benefits of such policies are, however, not easily calculated.

In regard to energy supply, many European Union countries, the United States and Australia have set biofuel targets – either sales targets or mandatory blends. Tax incentives for the use of biofuels are also common. Use of LPG and CNG is supported, primarily through tax rebates for grants for vehicle purchase or conversion (such as in Canada and Australia). India has policies for improving transport fuels, including lower sulphur content in petrol and diesel, a programme to blend 5% ethanol in petrol, and making CNG and LPG available in some cities (India, Ministry of Environment and Forests, 2004). Such policies, encouraging use of biofuels and alternative fuels, tend to be strongly supported by concerns about long-term petroleum oil supply. Brazil has the strongest biofuels programme, where ethanol production is supported by government assistance.

A focus on the regular home-to-work trip is common. Examples are compulsory work travel plans; tax benefits for employer-provided transport; support for car-poolers and public transport users; and ensuring that car use is not encouraged over public transport or cycling by the provision of subsidised car parks. In the United States, the “Bike Commuter Bill ” gives employees who bike to work the same financial incentives as car-poolers and public transport users.

Generally, investment in public transport is seen as supporting climate change policies. For example, under an European Union funding scheme for 2000 to 2006, approximately €3 billion has been allocated for investments in public transport and rail networks in Ireland (Ireland, UNFCC, 2005) Strategy includes development of a new metro network, improvements in the availability and quality of the bus network (especially the Quality Bus Corridors), two new light rail lines (which became operational in 2004), new park-and-ride facilities, and measures to improve bicycle routes and traffic management.

Most countries show strong support for technology developments. For example:

• European, Japanese and Korean car makers’ associations have committed to cut average CO₂ emission from new cars from 186 grams per kilometre in 1995 to 140 grams per kilometre in 2008/09
• the Australian government has an agreement with the automotive industry on a target of 6.8 litres per 100 kilometres (around 200 grams per kilometre) for petrol passenger cars by 2010. This represents an 18% improvement in the fuel efficiency of new vehicles between 2002 and 2010
• in the United Kingdom, Australia, the United States and other countries, there are grants for consumers and businesses towards the purchase cost of certain vehicles (including hybrids in some cases), conversion to alternative fuels and pollution-reduction equipment
• research and development funding is common. In the United Kingdom, up to £3 million of funding is available to support demonstrations of up to 150 low-carbon buses.

Interest in hybrid technology is lower in European Union countries than in the United States. In the European Union, many diesel vehicles on the market already fulfil the demand for high-efficiency vehicles. Although some governments (such as those of Japan and the United States) provide consumers with financial incentives to purchase hybrid vehicles, most do not. However, taxation policy in many European Union countries favours the use of electric cars. In Norway, the purchase tax on sales of electric cars was reduced to zero in 2001. This has reduced the price of electric cars by 25% (International Energy Agency, 2001).

Generally, the light passenger fleet is the target for increased fuel economy. It is assumed that business cost margins are sufficient to lead to fuel economy being a consideration in the purchase of heavy vehicles.

The focus on air quality, rather than fuel economy, is generally behind schemes to remove older vehicles from the fleet, such as the British Columbian volunteer “scrap it” scheme. This pilot programme provided a grant towards the purchase of a new car, bus passes or car-pooling initiatives (Covec, 2005f).

Communication and education campaigns often use the message of saving money alongside encouraging appropriate behaviours for climate change. The Canadian federal government launched the " Be Tyre Smart" campaign in 2003 – encouraging tyre inflation and maintenance practices to improve fuel efficiency and prolong tyre life. Fuel-efficiency labelling of new cars and biannual vehicle inspections (for air quality) are common supporting policies. For example, in Norway and Australia, car producers are required to include information on fuel efficiency and CO₂ emissions in their marketing and labels on windscreens at point of sale. Vehicle inspections are considered useful because they encourage regular maintenance.

In regard to other modes, aviation is recognised, particularly in Europe, as an area to focus on. It has recently been confirmed that aviation will be included in the European Domestic Trading Scheme.

Conclusions and application to New Zealand

The importance of limiting the growth of GHG emissions from transport is well recognised in developed countries, but no single measure has been shown to address the problem. Transport policies are mixed and not focused solely on reducing CO₂ emissions. Co-benefits for air quality, congestion and oil security affect the mix of transport policies.

Significant efforts to improve the fuel economy of vehicle fleets through industry targets and fuel prices have, at least in Europe, helped reduce the growth rate of emissions, if not their absolute amount.

In New Zealand, our transport system reflects a small population distributed over two main islands with a combined length of 2,000 kilometres. A significant amount of trade occurs through shipping and air transport, building on early port settlements. Our towns generally developed alongside motorised transport, allowing for greater distances between home and destinations.

New Zealand is near the top of the world in its use of vehicles. For a population of just over 4 million, there are around 3.2 million registered vehicles on New Zealand’s roads, 69% of which are cars. New Zealand does not manufacture its own vehicles. The majority are imported from Australia, Europe and Japan. Around 55% of new entrants into the fleet are second-hand cars from the domestic Japanese market.

In considering the appropriateness of using policies adopted overseas, the following is concluded:

• road-transport emissions are generally the main focus of climate change policy packages, particularly passenger-vehicle purchase and use and urban travel, so New Zealand is not unusual in this respect
• in New Zealand, transport needs per capita are likely to be greater than those in many other developed countries due to the way our towns have developed, low urban population densities and resulting land-use patterns. There may, therefore, be fewer opportunities to develop cost-effective alternatives to private vehicle use
• to date, New Zealand has not used fiscal measures to affect transport use. Our fuel price is relatively low and there is no differential pricing of vehicles by fuel economy. Experiences overseas may be relevant but because our starting point is different, local circumstances (such as our unusual fleet and use of road user charges for all diesel vehicles) are more likely to determine appropriate policy
• a focus on making the most of technology developments should be common to all countries, but the different circumstances need to be considered. Other countries have agreed fuel-economy targets with their local vehicle-manufacturing base. New Zealand does not have this opportunity, but it can manage new entrants to the fleet at the border and at the time of purchase
• when looking at congestion policies used overseas, it is clear that such policies are not employed solely for climate change benefits. Policies such as the cordon pricing in central London are also used to address localised concerns. In New Zealand, we would need to look at the appropriateness of such policies, given the make-up and issues of our urban areas
• provision of alternatives to single-occupancy vehicles is shown through the targeting of trips to work and the provision of public transport. These have generally come through investment or financial support. Similarly, in New Zealand, changes from our current patterns are likely to require specific targeting of certain trips and government assistance
• experience with education campaigns and information provision is likely to be similar around the world. In particular, it appears that even with provision of information on fuel economy, preferences for more powerful, bigger vehicles often offset the vehicle-technology gains. However, on the positive side, the co-benefits of saving money and better health are useful additions to any campaign
• use of biofuels and alternative fuels (LPG and CNG) is recognised as important for climate change policy and New Zealand would be in line with Europe and others in supporting these fuels
• increase in emissions from domestic aviation is common to New Zealand and other countries. Furthermore, as an island nation, New Zealand has a strong interest in aviation. With aviation now being included in the European Domestic Trading Scheme, there are indications that international policy on aviation is developing.