Motor vehicles account for 15 percent of the carbon emissions in Singapore.
The Carbon Emissions-based Vehicle Scheme (CEVS) introduced in 2013 sought to curtail this with tax rebates and surcharges.
However, recent realisation that diesel vehicles, which are low in carbon emissions but high in more noxious pollutants such as nitrogen oxides (NOx) and particulate matter (PM), has prompted a rethink of a carbon-centric policy.
Some major cities – Paris, Mexico City, Madrid and Athens – are moving to ban diesel vehicles altogether.
Singapore is reviewing the CEVS, and is likely to include NOx, PM, hydrocarbons and carbon monoxide as criteria for whether the carrot or stick should be applied to a particular car.
But more can be done. The CEVS is now limited to cars and taxis. Perhaps the revised scheme can include all other vehicles, including commercial or goods vehicles, which account for nearly 60 percent of Singapore’s total pollution from vehicles – even though they make up only around 30 percent of vehicles on the road.
Then there is the question of whether tax incentives should be channelled more directly to end-users. Currently, rebates are based on a car’s Additional Registration Fee (ARF, or the main car tax). The car buyer seldom enjoys the full incentive because the motor dealer has already factored the rebate into the car price.
The owner gets a minor shock when it is time to scrap his car because its ARF-based scrap value is substantially lower.
He may then decide to keep his car beyond 10 years because the scrap rebate forgone will be negligible. If this happens en masse, Singapore could miss out on newer, cleaner technologies.
Therefore, a scheme which combines a road tax discount, or waiver, with a smaller ARF rebate might work better.