Edgar Morgenroth: Fossil fuel bans could deflect us from effective non-coercive policies

Adjusting taxes so that prices reflect the wider costs of using fossil fuels would lead to more efficient decision-making

Having to resort to a ban is a sign of having failed to convince people of the need to change behaviours. Stock picture: Niall Carson/PA

Increasing greenhouse gas (GHG) emissions from transport have led to calls for immediate bans on SUVs, cars in cities, and private jets in Ireland. Similar calls are emerging in other countries.

In Germany, a government proposal to ban new oil and gas heating systems from 2024 was leaked to the public, which, following a public outcry was substantially, amended.

Having to resort to a ban is a sign of having failed to convince people of the need to change decisions and behaviours, but the calls we have seen recently may end up being counterproductive to the aim of reducing emissions and deflect from the implementation of effective non-coercive policies.

Take a proposed ban of cars in cities. There is certainly scope to extend pedestrian areas in many cities, but is public transport available to make a wider ban feasible?

Does it mean banning taxis, which are important for many people who are less mobile? Are there enough park and ride facilities for people from outside cities? Would it not end up pushing traffic to out-of-town shopping centres and end up hollowing out city centres?

CLIMATE & SUSTAINABILITY HUB

Home heating 

In the wake of the leaked plan to ban oil and gas heating systems where old systems in Germany need replacement from 2024, a range of issues emerged. For example, the cost of alternative systems, principally heat pumps, is much higher than an oil or gas boiler.

Households might not be able to afford that higher cost, and especially in the case of elderly persons the substantial cost of such an investment might not be worthwhile.

There might not even be enough heat pumps available to install, and the electricity grids might not be able to accommodate the additional load. This highlights the fact that bans would typically need to be accompanied by other measures, but these are often ignored in the discussion.

Another effect of the potential ban was increased inquiries for new oil and gas boilers by people who expect to have to replace theirs in the near future. 

Motor fuel 

This is an effect that is also possible in response to the ban of petrol and diesel powered cars in the EU from 2035.

This ban could lead to older cars being repaired rather than replaced. This is sometimes referred to as the Havana effect, with reference to the large number of American cars from the 1950s in Cuba where, due to an export embargo, newer US models were not available. Both the Havana effect and a pre-ban increase in sales of less sustainable products would of course have negative environmental effect and would thus constitute a counterproductive effect of a ban in the absence of other measures.

Bans can also be counterproductive in another way. 

Bans can provoke resistance

Forcing people to make changes that they would not chose themselves could increase resistance to further measures. People may also worry that if you can ban one thing then other things can be banned too.

The fact that calls for bans are typically made by people who would be unaffected by their proposals is important, as it shows a lack of care about other peoples’ circumstances.

People prefer to make their own choices, but these choices must be based on the correct information, and an important dimension to this is the prices they face. For motorists the cost of running their car includes the purchase costs and the running costs, including various taxes. The total cost to society includes these costs and additional wider societal costs from congestion, emissions and road damage.

Economists have shown that, by adjusting taxes so that the wider costs are reflected in the private costs, more efficient decision-making takes place, and this will in most cases have fewer additional complications than an outright ban.

Reducing emissions is neither optional or costless and does imply significant change. Inevitably, there is resistance to change for a variety of reasons, which might well be amplified with bans. By making the full costs of decisions explicit so that people can make an informed decision is a much better policy in most cases.

• Edgar Morgenroth is professor of economics at Dublin City University Business School