Car prices and pollution

Recent newspaper reports tell us that as from January 3, imported used cars made before 1998 will in effect be banned, unless they meet emissions standards to be toughened in 2009 and 2012. This is because of Government imposed limits on exhaust emissions introduced in a bid to cut pollution.

But will emissions be cut?

The ban on imported cars will reduce the supply of cars available on the New Zealand market. This will increase the price of used cars which will make it dearer for people to replace their old cars. Thus people will keep using their old, high emission, cars longer than they otherwise would have. It may turn out that keeping the old high polluter cars on the road longer may not lead to the reductions in pollution the government hopes for.