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Analysis by Keith Rankin.

Environmental costs are a big deal, which need to be properly factored into our economic decision-making. Last week the Government announced a rebate scheme for electric and hybrid vehicles.

Keith Rankin.

These days we emphasise the very important greenhouse costs arising from the burning of fossil fuels: coal, petrol, gas. But they are not the only ways that urban vehicle use contributes to global environmental degradation. Certainly it is important that New Zealanders make a contribution to the emission-reduction endeavour, at least in proportion to the influence of greenhouse gases on global environmental harm. Changing the ways we own and use private vehicles represents an important outcome, to which good policymaking can make a valuable contribution.

In cities and towns, the problem is a mix of the overuse of private motor vehicles, and the use of vehicles that are overspecified for the tasks they are required to perform. The high-tech solution just announced in New Zealand is to transition to an all-electric fleet; with 2035 being designated as the year in which the import of non-electric new urban vehicles will be prohibited, with a view to New Zealand having an all-electric fleet by around 2050. The important new policy to accelerate the promoted transition will be a subsidisation of electric and low-emission vehicles, combined with a tax on high-emission vehicles.

In my view, this represents an overreliance on a particular technology that presently contributes as a niche solution, but is untested at scale. It represents a strategy by which one technology is replaced by another, whereas a more robust outcome might involve more variety of technologies, and better incentives to use existing technologies more efficiently. Indeed, there is too little emphasis on low-tech contributions that can be implemented in 2021 or 2022.

Public Transport

We should note that countries operating at pandemic emergency levels need to emphasise both minimisation of urban travel, and other measures – vaccination, physical distancing, and mask use – that minimise opportunities for indoor airborne transmission of pathogens between people from different households. Public transport here constitutes a public indoor space; so, under these conditions, there will necessarily be a preference for private transport. However, this preference for private transport in a pandemic will be offset by significantly less overall movement of people.

It is important that, when countries are not at pandemic emergency levels – and New Zealand is not currently at a domestic emergency level (it does continue to have a pandemic emergency at its international border) – all incentives to prefer private over public transport are discontinued; even reversed.

New Zealand at present has a permanent requirement for passengers to wear facemasks when using public transport. And the consequences are obvious, at least in Auckland. While traffic congestion is noticeably worse than it was in 2019, buses and trains are noticeably more spacious, with empty buses still a common sight all over the city.

New Zealanders of all ethnicities have revealed an unsurprising preference to not wear masks (except when there is a current outbreak of Covid19), and to only use masks when required to by law. New Zealanders don’t like wearing masks. Indeed, it was quite strange visiting Middlemore Hospital last month, which has a train station outside its main entrance. The only masks I saw in the hospital were those being worn by people heading out the front door, to catch a train.

The mask mandate makes public transport consumption a more costly experience than it would otherwise be; in part because New Zealanders don’t like wearing facemasks, and in part because it signals to the public at large that buses and trains are inherently unhealthy – indeed dangerous – places. Auckland’s public transport has improved markedly this century, though buses had a taint, even before Covid19, of being ‘loser movers’. That taint has been majorly exacerbated during covid times.

When there are twenty percent more cars on urban roads than there need to be, then greenhouse emissions are likely to be raised by fifty percent; that’s because of the stop-start nature of traffic congestion. So the first thing authorities can do to reduce greenhouse emissions from car use is to discontinue the mask mandate, except as an emergency measure. Other incentives to use public transport – including temporary incentives – may also be helpful, to help redress its ‘loser mover’ taint.

(Of course any incentives for workers to take sick leave when sick, or to work from home periodically, need to be retained. Also, people should be encouraged to wear facemasks if they are experiencing conditions such as hay fever; conditions which could be construed by fellow passengers as covid or influenza. The general principle is that buses and trains and ferries should become happy, normalised, family-friendly public spaces.)

It’s also important to note that interruptions to the normal flow of low grade ‘seasonal’ viruses – infections such as ‘common colds’ – may have unanticipated consequences. These viruses may provide substantial (albeit incomplete) immunity to more serious viral infections; we do not know, in large part because our public health people are not asking this question. (We should note that vaccinations themselves can be regarded as protective low-grade infections.) Thus, by disturbing the normal flow of low grade pathogens – such as the cold viruses we have adapted to – we are participating in a social experiment. In New Zealand over the last nine months, hospitalisations have increased for what were otherwise rare respiratory disorders; and excess deaths in New Zealand have been comparable with those in European countries with active Covid19 outbreaks.

Public transport use is a critical component of greenhouse emissions’ reduction.

Subsidies and Small Cars

Subsidies (‘carrot’ incentives) are generally more effective than taxes (‘stick’ disincentives’). They work by leading more people into making those choices that have collective benefits. And they fit the wider (‘zero-sum’) principle of public finance that requires private financial surpluses to be offset by public financial deficits. (In this context, just as responsible governments understand that small countries are not excused from contributing to the global good through greenhouse emission reductions, so all countries’ governments need to contribute by running public sector financial deficits to offset unsustainable private sector financial behaviours. This means that ‘we do not have enough money’ is not a valid governmental excuse for inaction or for under-action.)

First, governments need to subsidise surgical-grade facemasks for people with conditions that make them high risk to acquiring respiratory infections in public places. This allows such compromised people to mingle in public spaces without imposing illiberal mandates on the general public.

Second, small cars emit fewer greenhouse gases than large cars. Not only should governments subsidise small safe low-emission petrol vehicles, but they should encourage households who genuinely require larger family vehicles to acquire such small vehicles as their ‘second’ car. And to default to their smaller vehicle whenever they are on runabout duty with one to four occupants; thus, the smaller vehicle should rightly be called the ‘first car’ of a household.

The vehicle I mainly drive now is a 2003 Honda Jazz, which is still fuel efficient, can act as a mini utility vehicle when circumstances require it, and, over the last summer, effortlessly ran a return trip from Auckland to Cromwell.

The other benefit of city residents and townspeople driving small cars like this as their default option is that the roads become safer. Collisions are more likely than at present to be between two small vehicles, and thereby less likely to cause major injury or death.

By all means we should subsidise small electric vehicles as part of this mix. But, we should note that most small vehicles will not be garaged at night – because they are owned by mainly younger people without a garage, because a bigger family vehicle is in the garage, or because of the modern trend to use garages more as storage units for household affects than as homes for cars – and that plugin electric vehicles parked on the street at night cannot easily be charged.

Family Vehicles

Larger vehicles – especially vans and people movers – do play and will continue to play an important role in our vehicle mix. The answer here would be to emphasise (and subsidise) hybrid technology, now well established. These vehicles are particularly useful for large families, and for many businesses.

What we want is to minimise the inappropriate urban use of ‘utes’ and SUVs. Indeed, in recent years four-door utility vehicles – in most cases a form of truck – have become a status symbol, to some extent displacing SUVs. These are vehicles best suited to rural use – eg by farmers. Petrol or diesel ‘utes’ should be subject to a large-car tax (indeed a large car-tax), which can be rebated to legitimate users for whom these are a valid business cost. They should continue to be available to rich city-folk who need to tow their recreational boats to Pauanui or Whangamata, so long as they pay the large car tax. And, they should be exempted the tax if they buy an electric ute or SUV instead of a ‘gas guzzler’; incentives should apply at all price points.

Electric Vehicles

All EVs, including bikes, should be eligible for transition subsidies. The aim however should not be to switch to fully electric fleets; we need diversity and efficiency, rather than vulnerability. Thus a small EV is clearly better than a big EV, for typical city runabout use.

We should note that, in New Zealand this year, more electricity has been generated by burning coal than in any of the previous ten years. This may be partially a consequence of climate change; more droughts, meaning less water available to generate hydroelectricity. Thus, a mass switch from oil-based fuels to electricity might end up being, substantially, a switch from petrol to dirtier coal; not exactly what the policy is intended to achieve.

Considering vulnerability, we need to note that modern electric vehicles require scarce raw materials, such as rare earth metals, which are substantially sourced from China; and massive amounts of other increasingly scarce metals, such as copper. (See Al Jazeera‘s The Dark Side of Green Energy.) At a time that one ‘conversation’ is leading western countries to distance themselves from China, another conversation may be leading us go become more dependent on Chinese sourced materials. And the environmental costs to these mining regions in China is comparable to the political costs being faced by some other communities in China.

Another really big issue is that of e-waste. It’s important that the cost of any vehicle – including electric vehicles – is fully inclusive of the costs of reusing, recycling, or otherwise disposing of end of life vehicles (and vehicle components such as batteries and tyres). One aspect of this is to avoid a transition process which makes many still good vehicles prematurely obsolete. Policymakers need to take a global perspective on this. Countries like New Zealand – which traditionally import many used vehicles – need to continue importing quality low emission used petrol vehicles – to ensure that a sound global vehicle ecology is maintained.

Rental Vehicles

It is common for us to rent tools (eg trailers) and power machinery; otherwise these items that we own spend most of their time idle. We can treat passenger vehicles in much the same way. So, while it is good for young people to learn to drive – and gain drivers’ licences – that does not mean they need to own a car, not even a small car. They can rent cars – preferably small cars – for weekend and longer trips. Quality rental housing within walking distance of main employment and transport nodes, combined with a reliance on rental vehicle options for irregular travel, can form the basis for an affluent but uncluttered life; an eco-life.

Likewise, ‘nuclear’ households of four or fewer people should be able to comfortably get by with one small private vehicle, renting a larger vehicle whenever irregular vehicle requirements occur.

A green society needs fewer vehicles that each do many kilometres in one year. In that way, the vehicles will wear out as the technology becomes obsolete; ie ideally a car should do 200,000 km (or more) in a fifteen-year life.

Technological Transition

Electric vehicles, used at scale, represent an unproven option with many potential unaddressed and unintended consequences. The only comparable wholesale transition is that from steam to oil, and that took eighty or so years, with the best steam engines being built in the 1950s.

One of the most interesting transitions in transport technology was that of sailing ships giving way to powered ships. The transition lasted over 100 years, with Norway in particular improving the technology of commercial sailing ships into the twentieth century. New Zealand is particularly well-adapted to sailing ships, because it represents the half-way point of the great circle circumnavigation route. There is a reason why the westerly winds in the Southern Ocean are called ‘trade winds’. The last of the commercial windjammers was the Pamir, which last sailed out of Wellington in 1948. Sailing ships, in their context, are much more eco than electric cars. May we see a reintroduction of sailing ships into the mix?

We can learn from this last episode, by using multiple technologies simultaneously, and letting markets (which properly cost what they supply) determine the outcomes; and focussing on the bigger ecological picture, that less is more.

We need to remove disincentives to the use of public transport. And we need to promote the intensive use of small private vehicles wherever and whenever they are sufficient to the tasks people require of them.


Keith Rankin, trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

contact: keith at



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