The effect of passenger vehicle CO2 emissions tax on consumer behaviour relating to new car purchase decisions

Abstract

Carbon dioxide (CO2) emissions and the resultant negative effects thereof on the environment due to climate change remain a global challenge. In South Africa, passenger vehicles contribute significantly to the amount of CO2 that is emitted into the atmosphere. In an effort to address this challenge, South Africa introduced a CO2 emissions tax from 1 September 2010. The aim of this tax is to make the vehicles on South Africa’s roads more environmentally friendly by influencing consumer behaviour at the point of a new car purchase. This paper considers the effect of this tax by way of a survey that targeted consumers who have bought a new passenger vehicle since the implementation of the tax. The paper aimed to measure consumers’ awareness of and insight into this CO2 emissions tax, as well as to determine whether the CO2 emissions tax influenced their purchasing decision. The results of this survey indicate that most consumers are not aware of the CO2 emissions tax. There is thus evidence to substantiate that the CO2 emissions tax has not achieved its purpose of making South Africa’s fleet of motor vehicles more environmentally friendly by changing consumers’ behaviour through influencing the purchase decision relating to new car sales.