New Zealand wants to charge road users for air pollution, noise and GHG emissions

Early this year the New Zealand Ministry of Transport published a consultation document “Driving Change: Reviewing the Road User Charges System”. The document highlights that other than road damage, other externalities, such as water, noise or air pollution, accidents, congestion, and greenhouse gas emissions are not explicitly considered when setting road user charges (RUC) today. The government acknowledges that decarbonising land transport is going to be challenging and requires a broad set of measures to achieve the reductions recommended by the Climate Change Commission. Further, they believe that bringing up externality costs related to such emissions might make the shift to a low-carbon society more economically fair. They acknowledge that buying an electric vehicle might be a large cost and that biofuels might be more expensive, but incorporating more of the true costs of fossil fuels might lessen this gap. Providing an exemption or reduced rate of RUC could help support and promote the uptake of new fuels. This assistance would most likely be through exempting vehicles subject to RUC, such as electric vehicles, or through charging a lower RUC rate than equivalent petrol or diesel vehicles, to offset higher operating costs. The document adds that if the intent is to support technologies or fuels that are currently more expensive than existing fuels, but which assist with reducing greenhouse gas emissions, RUC could be used to support this shift.

The consultation is open until 22 April 2022 and can be accessed at https://www.transport.govt.nz/consultations/road-user-charges-consultation/.