Policy: Consumer Awareness

Lack of consumer awareness of the link between vehicle choice and environmental impact poses a significant barrier for capturing the benefits of emissions related VED (Gray et al., 2006). In a study conducted for the UK government only one in seven (14% of sample size) persons knew that the graduated VED was based on CO₂ emissions compared to 34% linking VED to engine size (DfT, 2003a). The emissions performance of new passenger cars tends not to be a major factor in purchasing behaviour. Generally, vehicle price, fuel consumption, size, reliability and comfort are the most important factors in the decision making process. Based on a study conducted for DfT (2003a), Figure 5-1 indicates that over half of people polled had a low level of awareness of the graduated VED therefore playing a minor role in vehicle purchasing. 

Figure 5-1. General awareness of graduated Vehicle Excise Duty in UK

Source: MORI, 2003 in DfT, 2003a

A general lack of consumer awareness over the implications of vehicle purchasing choice and climate impacts poses a significant communications challenge in abating carbon from the transport sector (DfT, 2003a). This points to the critical need for improving communication campaigns as a central strategy for supporting vehicle emissions related taxation schemes. In Sweden for instance, public awareness was viewed to be a critical factor in gaining support for and realizing the benefits of the vehicle excise duty. Public surveys conducted in Sweden have shown a decline in lack of awareness of climate change and vehicle purchase choice with 12 – 18% in 2002 – 2003 not being aware decreasing to 1 – 5% in 2006 (Naturvårdsverket, 2006 in Borup, 2007). The increase in awareness is also reflected by greater coverage in popular media (Borup, 2007). Public awareness has also increased in the UK where 87% of respondents in a 2006 survey supporting the purchase of more efficient vehicles (DfT, 2007b). And, although tax increases are usually unpopular, 52% of respondents in 2006 supported increased taxes on the most environmentally damaging cars (DfT 2007b). Additionally, 68% of respondents believed that graduated VED is a worthwhile initiative and 60% agreed that over the long run the policy will help reduce emissions. Despite these positive signals, trends in both Sweden and the UK clearly indicate consumer purchasing towards larger more powerful vehicles.

One strategy proposed to increase awareness is for the tax disc which is allocated each time VED is renewed in the UK to be colour coded reflecting CO₂ bands used for VED and the eco-label. This idea was proposed in a competition run in 2007 by the Low Carbon Vehicles Partnership to promote ‘greener’ motoring marketing. The winner, Intelligent Marketing, proposed that an appropriately coloured sticker would be added to the tax disc when it is purchased, and the CO₂ (g/km) written on the tax disc instead of the engine size as it is today (Figure 5-2). Just adding a sticker in this way would create a cheap and easy to administer way to reinforce the strategy towards lower carbon vehicles (Anable and Bristow, 2007).

The system would have three main effects. Firstly, it will support the attempts already being made through VED and eco-labelling to help drivers understand the link between car type, emissions and the cost of motoring. Secondly, it will be a public display of the CO₂ band of each vehicle, thus having potentially powerful effects on public opinion, social norms and purchasing behaviour. Thirdly, it will mean that second hand vehicles, which currently do not display the eco label when being sold, will also have a visible signal relating to its carbon footprint (Anable and Bristow, 2007).

Figure 5-2. Tax discs associated with the graduated Vehicle Excise Duty in the UK

Source: Low CVP 2007; Intelligent Marketing 2007