A Vehicle Emission Tax Model: To Promote Adoption of Zero Emission Vehicles for Indian Context

Abstract

Vehicle tailpipe emissions have been regulated by the authorities over the period of time forcing vehicle manufacturers in improving engine technologies to comply with the government stipulated norms. Improvement in engine designs has reduced vehicle tailpipe emissions to the extent of emissions to meet the notified norms. Historically, such a reduction in vehicle emissions has been achieved in steps/stages as and when new emission norms were notified. It is proposed in this paper that a pragmatic approach should be adapted in the reduction of vehicle emission by devising a system to incentivize the vehicle manufacturers depending upon the level of average tailpipe emissions of their models by imposing a “vehicle improvement tax” based on the claimed emission levels of different vehicle models. All major hazardous emission components namely, Carbon dioxide(CO₂), Hydrocarbons(HC), Carbon mono oxide(CO) and Nitrous oxides (NOx) should be taken into consideration for measuring the average tail pipe emission for the taxation purpose of a vehicle. In this paper, numerical formulae have been suggested to calculate the percentage of standard emission tax to be imposed on the vehicle. Standard emission tax to be levied by authorities based on price and tonnage of the vehicle; the proposed formulae then calculates the percentage of this tax to be imposed on the vehicle based on emission levels of CO₂,CO,HC,NOx.This formulagivesweightage to the relative hazardous index of these emission components. That is, a vehicle model having lower emission should attract lesser taxation than the model which barely meets the norms. If the proposed system of incentivizing vehicle manufacturers by differential taxation is adapted, an environment for self-sustaining the cycle of continual improvement in vehicle engine technology can be created for a reduction in vehicle tailpipe emissions. This will help achieve reduced pollutants in the atmosphere and better air quality to live in.