Dutch Treat: Pay-As-You-Drive Taxation Proposed

By Bill Moore

Posted: 18 Nov 2009

When you think of The Netherlands, many images come to mind: the colorful canals of Amsterdam, the quaint windmills, the thousands-upon-thousands of bicycles. But it also has nearly 8 million automobiles; and with a population 7.2 million households, which equates to at least one car per family. And it is not uncommon, according to the Dutch Roadgeek blogger, to see anywhere from 600 to 1,000 accumulated kilometers of traffic jams during rush hour across The Netherlands, based on Tom-Tom data.

In order to try and stem this polluting, enervating, productivity-robbing flood, the government ministry in charge of trying to solve the problem has proposed replacing the current automobile tax scheme, which levies fees when you buy the vehicle and annually when you register it, with a 'pay-as-you-drive' proposal. A government-mandated GPS data logger will keep track what time of day you drove. Driving during rush hour will cost more than non-rush hour periods. Driving further will cost more than driving fewer miles.

But it gets even more interesting than that. In order to continue to encourage more efficient, less polluting, lower carbon-emitting cars, the Minister also is proposing the fees be adjusted as to how old the car is and how much carbon it produces. Older cars will pay more than newer cars. Lower carbon cars will pay less than higher carbon producers.

According to H.J. Bakker, the director of Elec-cars Nederland, the Dutch government still has to approve the scheme and if it does, it will first be implemented in commercial trucks (lorries) starting in 2011. Personal automobiles will be required to adopt the system in the 2012-2013 time frame. He stresses, "The govement can only see how many miles you drove and the time you did that, and not where you drove these miles," hopefully allaying privacy concerns.

Of course, under this regime, small electric cars and trucks, like the Dutch-developed Duracar Quicc! delivery van pictured above, would score very high in not only low operating costs, but also in terms of its local emissions. What needs to be further clarified is how are emissions from the nation's power plants calculated? Here's what the U.S. Energy Department's Energy Information Agency reports on The Netherlands' electric power grid mix as of August 2009:

Year-to-date, coal-fired plants contributed 44.4 percent of the Nation’s electric power. Nuclear plants contributed 20.4 percent, while 23.2 percent was generated at natural gas-fired plants. Of the 1.1 percent generated by petroleum-fired plants, petroleum liquids represented 0.7 percent, with the remainder from petroleum coke. Conventional hydroelectric power provided 7.1 percent of the total, while other renewables (biomass, geothermal, solar, and wind) and other miscellaneous energy sources generated the remaining 3.6 percent of electric power.

The city of Amsterdam has announced it wants to see 40,000 electric vehicles on its streets by 2020 and upwards of 200,000 EVs by 2040. Presumably they will qualify for the lowest fee rate compared to gasoline and diesel-fueled vehicles based on their overall CO2 emissions per kilometer. If they travel, however, during rush hours, they likely are going to pay the same fee as their petrol-fueled counterparts.

Assuming the Dutch government approves the new "Pay-As-You-Drive" plan, it will be instructive for the rest of the world, especially in nations where traffic congestion is equally problematic.

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