The Corner

Regulatory Policy

Net Zero: Yet Another Tax

London mayor Sadiq Khan outside City Hall in London, May 2016. (Hannah McKay/Reuters)

If there is a war against cars (there is), then one of its generals is London’s mayor, Sadiq Khan, who has been engaged in a campaign against motorists in the British capital since taking office. Now it seems as if the “race” to net-zero greenhouse-gas (GHG) emissions by 2050 may have given him an opportunity to torment them some more.

The Daily Telegraph:

Drivers in London could have to pay-per-mile charges by the end of the decade in order to achieve Sadiq Khan’s “accelerated” plan to hit net zero, documents reveal.

In an official report, the Mayor of London said that his ambitious plans for decarbonisation were “only possible” by charging drivers.

Mr Khan recommitted to the plans, published two years ago, last week.

Khan has previously said that he has “ruled out” a per mile tax charge (there will be mayoral elections on May 2), but it’s more than likely he will use his commitment to London’s reaching net zero in 2030, a painful and pointless 20 years ahead (supposedly) of the rest of the U.K., as an excuse.

The plans he is relying upon to achieve this target assume a 27 percent reduction in vehicle miles driven in London, which Khan has said in the past would require “London-wide road-user charging” from the “mid-late 2020s.” There will be no net zero without some kind of rationing, and, incidentally, that rationing will not be confined to driving. Enjoy gorging on meat or dairy while you can.  Khan has also stated that there could be “different rates [of tax] depending on how polluting vehicles are, the level of congestion in the area and access to public transport.”

Best guess: Pay-per-mile is headed London’s way.

That Khan might want to heap more pain on motorists is hardly a surprise, but it will be worth watching how this tax is raised, as per-mile taxes are already being discussed here in the U.S. If Americans do switch over to electric vehicles (EVs) in the numbers that the administration is hoping for, that will reduce the amount paid in federal and state gasoline taxes. How is that gap (measured, I would hope, at the state level after taking account of any sales tax paid on the electricity used by drivers to charge EVs) to be filled?

There are also many questions about the way in which such a mileage tax might be calculated. I’m assuming (perhaps wrongly) that it won’t be via an in-car meter.  What is obvious is that the more sophisticated the technology, the more games that policy-makers can play. Of course, if an American mileage tax is to be used solely to fill the hole left by reduced gasoline taxes, drivers of traditional cars should pay nothing. They would, after all, still be paying gas taxes. However, if the technology is in place to tax drivers by the mile, an effort will almost certainly be made to charge all drivers, not just those at the wheel of an EV. Those in charge of climate policy would be more than happy to see those drivers who “cling” to traditional cars being made to pay a double tax. It would be yet another way to persuade them to switch to EVs.

There are also plenty of other games that bureaucrats could play. I’m thinking aloud here, but these could include increasing the rate charged to drivers who exceeded a certain number of miles in a given period, and/or setting the rate high enough to push more people into public transport. In an age in which “congestion” charges are on the agenda, it’s easy to envisage the rate going up should a driver travel to some urban area where the planners prefer public transport, cycling, or walking. Maybe drivers could be charged more if they selfishly choose to hit the road at one of those (incredibly rare!) moments when our decarbonizing electricity grid comes under pressure.  Again, depending on the technology used, there could — let me don my tinfoil hat — be privacy implications. If a remote technology can measure how many miles a driver goes, it doesn’t seem to be a stretch to think that it could record where that driver has driven.

This will be a topic worth following.

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