A new report from the Confederation of British Industry, entitled 'Green Taxes: rhetoric and reality', suggests that: 'initial consultation on plans to promote purchase and use of cars with low CO2 emissions was minimal and unstructured.'
However, the report goes on to say that anecdotal evidence suggests the new company car tax system 'is already encouraging users to look for more environmentally efficient options.'
It also accepts that differentiating Vehicle Excise Duty according to CO2 emissions seems to be having a positive effect. 'But the thrust of the Government's approach has been to increase the burden of taxation on use (eg fuel duty) rather than vehicle ownership (which will continue even if congestion charges are introduced), potentially limiting the significance of VED as a tool for behavioural change,' said the report.
The CBI wants greater transparency in environmentally-based taxes, calling on the Government to establish reviews that measure the effectiveness of environmental taxes against the green objectives they were designed to promote. It also wants greater emphasis on incentives for businesses to go green.