New inquiry on vehicle excise Duty and CO2

An inquiry into the role that vehicle excise duty (VED) can play in cutting carbon dioxide emissions from road transport is to be held by the House of Commons Environmental Audit Committee.

Major changes to the VED regime were announced in this year’s budget (ENDS Report 398, pp 4-5 ). Buyers of the highest-emitting cars, emitting more than 255 grams of CO2 per kilometre, will have to pay VED of £950 for the first year from 2010 - more than double the current rate. Cars that produce less than 130g CO2/km will be charged zero VED for their first year on the road. Also, from April 2009 the spectrum of car CO2 emissions, from zero to more than 255g/km, will be split into 13 bands instead of the current six.

The committee will also hold an inquiry into how well sustainable development policies are being implemented by the government’s Export Credits Guarantee Department, the body that helps UK exporters win business overseas. A similar inquiry five years ago found that sustainable development was not being given due priority.

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