The Government is being urged to give financial incentives to encourage consumers to drive more environmentally friendly cars.

A report, backed by General Motors, Toyota, Renault, Volkswagen, Ford, Nissan, DaimlerChrysler and Honda, says tax reform and subsidies are the key to widespread use of new technologies.

Bio-fuels and hybrid engines were already in the market or close to it, but their high cost proved a barrier to consumer acceptance.

The report, from the World Business Council for Sustainable Development, says consumers need clear signals, such as higher taxes on environmentally damaging technologies or subsidies for engines or fuels that led to lower greenhouse gas emissions.

The Mobility 2003 report says: “The evidence is overwhelming that vehicle purchasers respond to higher actual and expected fuel prices by demanding vehicles that offer reduced fuel consumption.”
(Source: FT)