The CO2 Surcharge on a Tesla Model S is not an Abatement Cost

I have been following the story of Joe Nguyen and his (mis)adventures trying to bring in Singapore’s first Tesla electric car with some interest.

Poor guy had to jump through so many hoops, got passed around and back and fro between so many departments, had his application sitting around in cold storage because the people who were supposed to look at the matter didn’t know how to deal with it. And finally, after waiting for 7 months, was told he had to pay a CO2 surcharge of $15,000 if he wanted to drive a Tesla Model S on the roads of Singapore. Guy tried to appeal and was denied, paid up and registered his car in February this year (what do you expect him to do after importing the car into the country and waiting 7 months to try and get it approved – re-export it???). You gotta give the guy respect for pure determination and persistence in the face of the ignorance and ambivalence of the tick-boxing, form filling civil servants he was dealing with.

So Singapore has now earned a new “first”: First in the world to tax a tesla electric car (well, an electric car in general for that matter) for CO2 emissions.

But, it’s an electric car….so what emissions are we talking about? As the Tesla Model S does not have tail-pipe emissions, the LTA was considering the carbon emissions that would have been incurred by the power plant in producing the electricity that is used to charge the car. Seems reasonable… except if you are going to start counting carbon emissions at the source of fuel generation, you should be doing that for all cars, meaning you should start to include the carbon emissions incurred by refineries for producing the gasoline and diesel that the cars run on in any consideration of carbon emissions. But the current emissions standards for normal cars only considers tailpipe emissions. And if you are going to consider power plants’ carbon emissions, the efficiency of a power plant is not something in Mr Nguyen’s control and so should there then be a standard norm against which our power plants are measured and the inefficiencies should be borne by the government rather than by Mr Nguyen?

All that engineering mumbo jumbo aside, it was reported today that the Tesla head honcho has gotten in touch with PM Lee about the carbon surcharge and the PM will look into the matter. I am sure now that the PM is looking into it, it is not going to take 7 months to be resolved. And I hope Mr Nguyen gets his tax surcharge reviewed and refunded back to him.

In the meantime though, here is what an MP has to say about the matter: “From the government’s perspective, this is a rare carbon emissions reduction policy where the abatement cost would be voluntarily borne by consumers… rather than being paid for by the government.”

An abatement cost is defined as the cost of reducing environmental negatives such as pollution or emissions. Mr Nguyen has already paid extra to import the car in on his own and has had to wait 7 months for it to be registered. I think that is more than enough “abatement costs” that an individual has to voluntarily bear to bring in an electric car that will reduce environmental negatives. The CO2 surcharge in this case, levied in the name of carbon emissions that has not been correctly applied on a car that is recognized elsewhere as being environmentally greener is not an abatement cost to begin with, and the argument of whether it should therefore be borne by the individual or the government is a moot point.

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