Pay more for a 4 x 4

Anti 4×4 and SUV sentiment is being supported by a system of penalties being charged for importing polluting vehicles by the government. In a report by 24 Heures, importers of cars into Switzerland last year paid penalties of over CHF 5 million to the government for importing large polluting vehicles such as 4x4s. The penalties are calculated according to CO₂ emissions levels and apply to new vehicles that emit more than the current European standard of 130g/km. Importers are claiming that the fines are unjust and merely encourage the growth of the parallel or grey market. There is some truth in this assertion. To escape the penalties, currently all a Swiss resident with a penchant for a polluting vehicle need do is buy one abroad and wait six months before importing and registering it.

Nevertheless despite the penalty system, the number of 4 x 4s on the country’s roads continues to grow and has now reached 25% of all passenger cars. Some of these 4 x 4s are not SUVs but rather sedans with 4 x 4 capability. Criticism of some larger SUVs and other high polluting vehicles has been growing in recent years despite the failure of an initiative in 2010 to have them banned. Critics highlight the fuel waste caused by the extra weight of the 4 x 4 kit which is rarely if ever used by most drivers. Promoters of the campaign to ban urban SUVs and high polluting cars refer to them as “anti-social” vehicles also citing them as more dangerous to pedestrians and drivers of small cars than normal sized vehicles. Even the automobile advertising industry is looking askance at the rise of the large urban SUV with Smart car’s award-winning adverts parodying their unsuitability for in-town parking.

So what does this mean for the environment? At first take it means that people who want to buy a car that does not meet the 130g/km standard will pay more as importers pass on the penalties to their customers. The basic laws of economics would dictate that this would lead to a decrease in sales of these cars. But if it were only that simple. BMW announced its results this week and warned that “the pace at which earnings increase will be influenced by high levels of expenditure for new technologies (and) the development of new technologies to reduce CO₂ emissions in line with increasing regulatory requirements”. It is stating that it will make less money as it invests in reducing the emissions levels of its cars. If it succeeds and if other manufacturers of high emission vehicles are as rational as BMW then they will do the same. This means that their future imports into Switzerland will avoid incurring government penalties. But the market will still want vehicles that are unnecessarily big, have rarely used 4 x 4 kits and so burn more fuel than they actually need to. Overall it is a net gain to society and the environment, but it will be a gain that could be so much more. That is unless the government rightly lifts the emissions bar again.