Organization reports Israel’s “green tax” has backfired by prompting Israelis to buy 400,000 new cars in the past 18 months, although the Jewish State’s battle against ‘polluting cars’ saw “tremendous” success.

By Zeev Klein

Israel has the highest road congestion among developed nations, the Organization for Economic Cooperation and Development said in a new policy paper last week.

Heavy traffic in the heart of Tel Aviv [Illustrative] – Photo: Ronen Bar-Leb

According to the paper, Israel has the greatest average traffic density among OECD members, with more than 2.7 million vehicle-kilometers driven per kilometer of road. The data used for the paper is from 2014. An additional 400,000 vehicles joined Israel’s roads since then.

By comparison, Spain had fewer than 1.4 million vehicle-kilometers per kilometer and Turkey had fewer than 250,000 vehicle-kilometers per kilometer in the same reporting period. In the paper, the organization’s economists recommended introducing congestion charges, especially around cities and on major arteries, to encourage people to use public transportation.

The paper lambasted the Finance Ministry and the Israel Tax Authority, and by extension the Transportation and Road Safety Ministry, saying the ministerial committee that introduced the so-called “green tax” ultimately led to an increase in car sales, undermining its very rationale.

The organization said that the green tax and the related reforms had a “tremendous effect.” “From 2010, there was a significant reduction in sales of cars with pollution grades 10-15. The average pollution grade fell from 10 in the first seven months of 2009 to 7 in 2010 and down to 4 in 2012,” the organization said. “By 2013, nearly 70% of all new cars fell into the first five pollution levels — compared to 19% of cars in 2009. The formula update in August 2013 had an even stronger impact, increasing the share of imported cars in levels 1-5 from 49% (according to new formula) in 2013 to 83% in 2014.” But the report notes that despite this measured success, “because the tax reform essentially cut the price of the average family car, it led to an increase in car purchases, a rise in emissions overall, as well as other secondary effects like congestion,” it continued. The success on this front was somewhat offset by the spike in the sales of off-road vehicles, which have high pollution grades.

View original Israel Hayom publication at:
http://www.israelhayom.com/site/newsletter_article.php?id=35215