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As British taxes target gas guzzlers, sales of greener cars double

Driving a big car in London could set you back $10,000.

By Mark Rice-OxleyCorrespondent of The Christian Science Monitor / August 10, 2007



London

Driving an SUV in Britain already has a certain stigma, thanks to a growing climate-change clamor. But now it's set to become wildly expensive in addition to uncool.

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London mayor Ken Livingstone intends next year to triple the daily toll on driving in the city for gas guzzlers – or "Chelsea tractors" as they are sniffily known – to $50 a day. He also plans to scrap a residents' exemption, meaning that instead of paying about $350 annually, locals who drive cars over a certain engine size could be hit for $10,000.

"This new charge will try to affect the choices people make in terms of the cars they are buying," says a spokesman for Mayor Livingstone.

Indeed, amid a number of current and planned measures targeting gas guzzlers across Britain, sales of environmentally friendlier cars are rising dramatically. Figures provided by the Society of Motor Manufacturers and Traders (SMMT), an industry association, show that more than 9,500 were sold in the first six months of 2007 – more than for the whole of 2006.

"The market has doubled this year," says SMMT economics manager Matthew Croucher. "This is in response to a number of things – manufacturers trying to lower their CO2 performance, taxation issues, vehicle excise duty [road tax] and road tolling and congestion charges.

Also it seems people are trying to go green because of some personal belief, acting to try and reduce their carbon footprint."

London's mayor is not alone in targeting big engines. In west London, Richmond earlier this year hiked an annual levy on parking permits for SUVs to $600, an approach that is being aped in other London boroughs and districts.

At the other end of the scale, some districts like Westminster in the heart of London have brought in free parking for environmentally friendlier cars. When it comes to national road taxes meanwhile, greener vehicles pay a negligible fee, while thirsty new cars are stung for $600.

Then there are plans by a dozen cities to introduce their own congestion charge, which may penalize big polluters; and a nationwide proposal on road pricing which again may single out the SUV brigade.

When Carolyn de Pury bought a Mercedes ML320 for her growing family six years ago, it seemed an innocuous beast. Now, however, the growing fixation on climate change – not to mention punitive new taxes and charges on big polluters – are making her think again.

"Even my husband and I, who are full-blown capitalists, feel the pressure of it being an environmentally unfriendly beast," she says. "Next time it would have to be a car that does everything we want it to, but [is also] environmentally friendly and fuel efficient, in the save-the-world spirit that we are all caught up in."

The de Purys find themselves at the sharp end of a nascent "buy green" movement in British motoring. Manufacturers say they are struggling in some places to meet demand. Local dealers like Roger Hart say business is booming. At the north London dealership where he heads up Toyota Prius sales, interest in the low-emission hybrid is booming.

"We [sold] 360 cars in March, and 190 were Priuses," says Mr. Hart. "Interest has grown enormously because of the congestion charge and now also because of things like Westminster not charging for residents parking.

"It used to only be an older type of customer, but now it's every age group," he adds.

Gentle prodding from government may enhance the trend toward buying green wheels in the future. With some 33 million cars, Britain has more vehicles than America's most populous state, California, but is barely half its size. Transport accounts for around one quarter of total British CO2 emissions, and the government is trying to style itself as a global leader in the newly declared war on carbon.

So Britain's transport department last week launched a campaign to try and encourage more consumers to buy green and drive cars in a more environmentally friendly way. It now has a website – www.dft.gov.uk/actonco2 – that ranks cars in order of pollution.

"Buying an environmentally friendly car is a win-win," says one department official. "There's a climate change issue which you are helping, and it also means it's more fuel efficient, so you save money on the tax and on the fuel costs."

But some feel the rush to penalize big polluters is unfair. London's congestion charge, for example, was introduced to cut congestion, not emissions. Critics say congestion has begun to rise again.

"Our concern is that if you lose the goal of reducing congestion, you can then question whether those paying their hard-earned wages are getting value for money," says Edmund King, executive director of the RAC Foundation, a motoring charitable association.

He adds that low-mileage city dwellers like Londoners do not change cars that often. The sudden changes do not give them a chance to conform.

"The problem with the London scheme and the various local authorities that have introduced punitive taxes for residents parking, is that it doesn't give a lead time for people to change their behavior," Mr. King argues.

SMMT chief executive Christopher Macgowan said his organization would oppose Livingstone's proposals. "A family whose car emits one g/km more than their neighbor's could end up paying thousands of pounds more a year," he said. "That can't be right."

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