By Ivan Png, Published The Straits Times, 5 Dec 2013
Please explain the economics of government policies on private cars.
BEFORE writing this column, I searched on Google for Straits Times Forum page letters relating to certificates of entitlement (COEs) and received 92,500 results. By way of comparison, Google returned a mere 21,900 results for a search on "CPF" (Central Provident Fund) and only 6,960 on "HDB".
The huge number of links relating to the COE policy, essentially a vehicle quota system where people bid for a certificate to own a vehicle, is a clear indication of how much Singaporeans care about private cars.
Aspiring vehicle owners bid for COEs in five categories. Passenger vehicles are differentiated according to engine power (categories A and B). Goods vehicles and buses fall into category C, while motorcycles are in category D. COEs purchased in category E can be used for any type of vehicle.
A fundamental review would focus on the basic issues.
Car ownership doesn't bother anyone. Car usage is the problem. Car usage presents three social externalities - congestion, emissions and accidents.
Accidents should be regulated by criminal and civil law, together with insurance. How to manage congestion and emissions, however, is more controversial.
Presently, the Government manages congestion through a combination of policies.