Can we make green cars here?
Britain may be the fifth best exporter of cars in the world, but we’re 15th in Europe in the uptake of electric cars and hybrids like the Prius. The driveaway message from the new ippr report on Low Emission Vehicles is that if we don’t move with the times, the manufacturing advantage we have built up over the past couple of decades in car assembly is under threat. Two warnings: only a third of the value of components needed to support UK manufacture are purchased in the UK. And, as ippr points out, “car companies based in the UK are predominantly foreign-owned, [they] have choices about where to invest and could choose to move their production to other countries.”
3,342 plug in vehicle registrations in the UK last year (1% of the total) implies a massive shift in UK vehicle production priorities. What would success look like? By 2020, some 1.7 million electric and plug-in hybrid cars should be on the road, and rising, according to the Committee on Climate Change (CCC). This level of ambition meets the UK’s target to cut carbon emissions from vehicles to an average of 95 grammes of CO2 per kilometre by 2020. It would provide the platform needed to build “a critical mass for wider roll-out in the 2020s required to meet carbon budgets in this period.”
Is this now feasible? The jobs and skills premium is huge. Production of plug-in electric vehicles could create 130,000 jobs and gross value added of £16.5 billion in the UK by 2030.
So what matters is the here and now, and specifically, the role of government. Of the several key policy issues ippr examines in detail, one stands out for the TUC: public procurement.
The government currently spends over £400m pa buying cars, vans and other vehicles. Purchase managers are shackled by Defra’s guidelines for Government Buying Standards (GBS), which mandate that fleet average CO2 emissions of all new cars procured must be at or below 130 grammes of CO2 per kilometre. But this is virtually the average of emissions of all cars in the UK. As ippr comments, this standard does nothing to promote a green buying spree.
ippr opposes firmer and immediate action, such as a quantitative procurement target for major public sector buyers like the NHS trusts. It’s not clear why “cost effectiveness” considerations arent weighed against the wider economic and fiscal benefits of a major green car economy. The study cites the OECD: “using public procurement to support [market] development of green cars runs the risk of inefficient policies.”
Nevertheless, ippr recommends a tightening of government buying standards to accelerate green car purchases. By 2020, the fleet average for all new cars procured by central government should not exceed 95g CO2/km, the EU standard, but phased in early, starting at 2/3 of all cars in 2017 rising to 100% by 2020.
The lack of charging points are a barrier for consumers. Here, the government could spend more and inflate claims less. It originally allocated £33 million of funding for the support of charging points, spending £6.2 million on 2,500 funded points by the end of 2012, leaving £27m unspent. In February 2013 the government announced a “new” funding provision of £37 million for charging points. So the “new money” must be £10m, not £37m?