Why emissions tests are so exhausting

One problem I have with carbon tax is that due to lots of asymmetry of information the setting of a carbon tax rate is almost entirely arbitrary. Still, despite this, carbon tax does some good for the following reason. People change their bad consumption behaviour to accord with differing incentives like price changes. So for example, a tax on carbon dioxide emissions of £50 or £60 a tonne would affect our consumption habits in relation to products and services associated with carbon dioxide emissions, whether it be driving, flying or whatever. If this tax enabled the government to reduce taxes in other areas, then the carbon tax would help us change our habits and at the same time bring about selection pressure in the market for us to be more mindful of the environment.This is part of a general law of economics - when prices go up or down, people change their buying habits. If the price of red grapes goes up by 40% and green grapes stay the same, people will buy more green grapes and fewer red grapes. Similarly, if the price of emitting carbon goes up, people will lower their CO2 emissions, which will place selection pressure on consumers and on eco-unfriendly businesses. This means that as carbon/pollution taxes endure, people will look for more ways to be greener, making us as humans more mindful of our environment.

Alas, the government isn't happy with mere carbon taxes - it places superfluous and hence unnecessary additional burdens on us. It does this because politicians usually do not know the correct rate in a cost-benefit analysis between the externalities we emit and the freedoms we enjoy. Let me give you a personal example of this - the MOT emissions test. I drive a high-emission Subaru, and in order to enjoy this I am penalised with a higher rate of car tax. I also have a higher fuel bill than most. But both of these measures are fine by me in a free market where free-choice rules: I enjoy my Subaru and its fast-driving capacity so I soak up the additional cost. In a free society you may prefer something similar, or something very different, like, say, a more efficient Nissan Micra. You'll pay less than me in tax and fuel (per mile) but I'll beat you off the lights every time and probably get to my destination quicker than you. As long as we're both happy with that arrangement (and our choices indicate we are) then all is fine.

The trouble is, emissions testing at the MOT centre means that it doesn't stop there. Drivers cannot get an MOT certificate if their vehicle’s exhaust emissions are too high. This has come at a considerable extra cost to me (and other drivers like me). I had to pay £650 to replace a perfectly good sports-cat because it couldn't lower the emission levels to below the legal limit, and I will have to do this every few years for the same reason. Add to that the fuel costs and wear and tear each year getting the sports-cat hot enough to pass the test, and the fact that many other parts (oil, filter, lambda sensor, valves, etc) need changing more regularly to keep my emissions low enough, and this amounts to an unnecessary set of costs that I have to incur on top of the carbon tax I already pay to run a Subaru.

These costs are unnecessary for two reasons: firstly because they are going to have no significant bearing on future environmental changes at all. And secondly, a carbon tax (on my car tax and my fuel buying) already does the trick without imposing all the additional MOT emissions costs on me. If I find I want to lower my tax and insurance and reduce my fuel bill I can choose to sell the Subaru to a buyer who wants a fast car. Through that transaction we both win. If I can't sell it due to no one wanting such expensive car bills then it's a signal that my next car should be a more environmentally friendly car. In each case, autonomous decision-making rules. With the MOT emissions problem I have to fork out hundreds of pounds just to keep my car on the road. The government is already getting its pound of flesh through my increased road tax and fuel bills, it's unnecessary and hugely damaging to my bank balance to add MOT emissions expenditure to the mix.

There's also the unpredictability factor which gives us inopportune bills for which it is hard to save - and this affects not just high-emission drivers - all drivers have the same issue here. When your car tax and fuel bill is consistent with the kind of car you drive you can plan your year around it, knowing roughly what your expenditure is likely to be. If you end up with a part fault you can replace it knowing that the part needed replacing. But with these emission laws, bills can come in not through non-functionality of parts but through cars not being able to get through the MOT emissions test without having them replaced. As I and no doubt many drivers have found, this frequently brings about unexpected bills of hundreds of pounds that we need to pay, not to make the car roadworthy but to make it MOT emissions-worthy (a very different thing).

If we think it's reasonable to pay a bit more to run gas guzzlers, then it's true we need some mechanism to know whether people are running high-polluting vehicles or not. But we already have this mechanism in the form of higher fuel bills for gas guzzlers and higher car tax to account for those emissions, which, to me, renders the additional (and superfluous for reasons I indicated) MOT emissions test unnecessary. I'm not saying we don't need an MOT test at all - we just don't need the emissions part.

Surprise! If you set a target then people will game that target

This shouldn't come as the greatest surprise to anyone ever but sadly it does to those who would plan our lives. If you set people a target for something then they will game that target. This is true whether it's of bankers vying for bonuses and pushing losses outside the bonus period, people making tractors where if you measure them by the tonnage they'll make heavy tractors and, in today's example, if you set car manufacturers mpg targets for their vehicles then they'll game the measurement of mpg:

Motorists are usually advised that smaller cars can travel more miles per gallon (mpg) than those with larger engines, making them cheaper and more environmentally friendly to run.

But manufacturers’ estimates of fuel economy, based on official laboratory tests, may not reflect the reality when the vehicles are driven on the road.

Tests on 500 vehicles, half petrol, half diesel, each driven for three hours on roads in Britain, found that the cars travelled on average 18 per cent fewer miles per gallon than stated in manufacturers’ specifications.

Emissions Analytics, a data company which measured the cars’ fuel consumption and emissions, explained that this was due to cars accelerating more and travelling at higher speeds on the road than in official testing regimes.

The test drivers are of course all practicing perfect economical driving while, and this problem is worse for very small engines, we real drivers give it a bit of welly to compensate for those very small engines. And of course this is a general fault with any and every target of this type. Showing, once again, that if you want to ration something (here the desire is to ration fuel consumption) the best way to do your rationing is by price. For price is the one thing that doesn't lie in these circumstances.

It's such a simple concept that it really is amazing that those who would plan our lives still don't get it.