The Netherlands is seriously considering a ban on new gasoline and diesel cars beginning in 2025. The Netherlands has used tax policy to achieve one of the lowest levels of lowest levels of CO2 emissions in new cars in the European Union. According to a report by NGO Transport & Environment, vehicle and fuel taxes are driving the market for lower carbon fuel-efficient vehicles.
The catalyst for the proposed legislation was a Hague court decision last year that ordered the Dutch government to reduce greenhouse gas emissions 25 percent from 1990 levels by 2020. According to the New York Times, the court was heavily influenced by the IPCC and scientific advocates. In the Netherlands, as in most other EU nations, the question of whether humans cause climate change is settled and not open for debate. The only issue is compliance agreements to make substantial reductions in greenhouse gas emissions independent of practicality or economic effects.
The Dutch, reflecting their usual approach to environmental policy, have been strong supporters of the EU climate orthodoxy for decades. Published in 1996, an article on the development of Dutch environmental policy by Hans Bressers and Pieter-Jan Klok observes that since the “environmental risks are life threatening, the “principle of sustainability should be a guiding one for the organization of society.” That “approach is contrary to … economic processes , where the focus is on growth, not just to satisfy existing demand but also to create and satisfy new demand.” In other words, free market principles “do not offer any solution…rather they are the cause” of human produced environmental problems.
This philosophy, still in place today, helps explain a willingness to take an action that has high costs and trivial environmental benefits. It helps that although a small nation, the Netherlands is one of the wealthiest in the EU. According to the World Bank, the Netherlands accounts for just 0.5 percent of global carbon emissions.
As a wealthy country, the Dutch can engage in such folly, but the price of a feel-good action will not be cheap. The alternative to hydrocarbon fueled cars is electric ones. Where will the power come from to charge EV batteries? Not from windmills. The Dutch generate about 80 percent of their electricity from natural gas and coal. Its aggressive greenhouse gas reduction policy has resulted in electricity prices comparable to Germany, which has prices that are triple the US average.
Dutch drivers may derive a sense of helping to save the planet from zero-emission vehicles, but these vehicles produce emissions while recharging. While grand delusions are wonderful ways to escape reality, they also create rent-seeking opportunities. In this case, it is Tesla and its crony capitalist leader, Elon Musk. Tesla has made the Netherlands its European outpost with a new factory in Tilburg. The cars it assembles can cost over $100,000. Amsterdam now has 167 Tesla taxis serving its airport and wants to convert its entire taxi fleet within a decade.
Since the Netherlands is 30 feet below sea level, a better use of valuable euros would be to invest in technologies to prevent a sea level rise from damaging the country. Changes in the climate will always be with us, the Netherlands needs to be ready—and better dikes would offer more preparation than Teslas.
William O'Keefe is the President of Solutions Consulting. You can follow him on Twitter here.
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