Israel has the greatest average traffic density per kilometer among OECD countries. This data is presented in a new OECD paper examining Israel’s green taxation.
That’s the bad news. In the good news section, there is this:
The paper commends the unique method of calculating the green tax Israel formulated in 2009, claiming that it is “innovative and creative in referring not only to CO2 but taking into account five different pollutants and using the vehicle purchase tax to differentiate car models according to their relative impact on the environment.”
Even more good news is this:
According to the paper, the effect of green taxation on the purchase of cleaner vehicles has been “tremendous” and by 2014 about 83% of the private cars sold in Israel were in the lowest pollution grades, compared with 19% in 2009.
Unfortunately, in keeping with the law of unintended consequences, there is also this bad news:
At the same time, OECD researchers claim that the green tax had the side effect of drastically reducing the real purchase tax for many cars, due to green tax benefits, and has therefore reduced family car prices and led to new car sales skyrocketing. The OECD claimed that this leap has facilitated a substantial increase in traffic congestion, resulting in a rise in pollutant emissions, despite decreasing emission per vehicle.
Oh, that’s not good. That’s really bad. They would have been better, it seems, doing nothing!
So, another challenge for the government. Will they rise to it? And how? Well, whatever they do, some of the battle lines are already drawn:
At the present, professional-level officials in the Ministry of Environmental Protection and the Tax Authority support a congestion tax, which imposes a tax based on the driver’s actual contribution to congestion and air pollution, while the Ministry of Transportation resolutely opposes such a tax.
The environmental issues may be solved by a growth in electric vehicles, but the issue of congestion is likely to be ever present. We are just going to have to live with the jams.