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'Fuel taxes 'twice cost of damage to environment'
By David Millward, Transport Correspondent
Last Updated: 1:48am BST 25/06/2007

Fuel taxes paid by drivers are more than twice the cost of the damage they cause to the environment, leading economists have found.

Green lobbyists have been urging the Government to accelerate the rise in petrol taxes as a way of discouraging car use.

In addition motorists driving cars with the highest carbon dioxide emissions face a bigger bill for their annual tax disc, higher residents' parking permit charges in some parts of the country and the prospect of a higher London congestion charge at £25.

But petrol taxes work out at about 50p a litre, a figure that is far higher than the environmental cost of motoring, says David Newbery, a professor of economics at Cambridge University.

In one study, he estimated the total environmental damage done by motoring at £5.45 billion - about a quarter of the amount paid in fuel duty by motorists at the time.

More recent calculations by Stephen Glaister, of Imperial College, London - one of the country's leading experts on the economics of road pricing - confirm that motorists are paying more than their fair share if only CO2 emissions are taken into account.

"On carbon grounds alone, the fuel taxes are far too high," he said.

Based on the assumptions of the Government-backed Stern review into climate change, motorists should be paying only 20p a litre in tax - if the purpose of the money raised was to cover the cost of the environmental damage they caused.

An AA spokesman said, however, that motorists were not being taxed to cover environmental damage or the cost of providing roads, but purely to "bolster the income of the Treasury". He added: "We have long called for motoring taxes to be set out to show what covers the cost they impose on society and what is being used as general taxation."

But the economists' assertion that drivers were being overtaxed was challenged by Stephen Joseph, the director of Transport 2000, the environmental pressure group.

"This flies in the face of what other economists are saying, which is that motorists are paying too little for the environmental damage they are causing," Mr Joseph said.

"Transport is one of the major causes of CO2 emissions and to argue that they should pay less ignores this."

A spokesman for the Treasury said: "The real cost of motoring is 15 per cent lower than in 2000, and fuel duty rates are 16 per cent lower in real terms than they were in 1999, when the fuel duty escalator was abolished."

"Transport is one of the major causes of CO2 emissions and to argue that they should pay less ignores this."

I thought private vehicles only accounted for about 2% of the UK's net CO2 output? There aren't enough commercials on the road to turn this into a 'major cause' surely?

EDIT: The output in 2004 from private vehicles was ~ 10% of UK emissions.

EDIT: The output in 2004 from private vehicles was ~ 10% of UK emissions.

Do you have a decent source for that? That also goes to Sixy.