Rebates should be given to car buyers who switch to low carbon vehicles and those who opt for high emission cars ought to pay extra, according to Campaign for Better Transport.
Its report discusses the possibility of a feebate scheme to encourage UK car owners to buy low carbon vehicles. This will help the Government move towards its goal of reducing greenhouse gas emissions by 80% by 2050.
The reduction plan is reliant on electric and hybrid vehicles, amongst other environmental policies.
Other incentives to buy low emission cars are also in place, such as graduated Vehicle Excise Duty (VED), Plug-In Car Grants and graduated company car taxation rules. But British car buyers have not been biting the bait as much as it had been hoped, with only a thousand taking up the financial incentives.
Chief executive for Campaign for Better Transport Stephen Joseph said: "Our report suggests that now is the perfect time to consider a more radical approach and a feebate system could work.
"The Treasury could learn from the operation of a similar scheme in France and develop one that is cost-neutral and encourages the take-up of low emission vehicles."
Copyright Press Association 2012