Car scrappage schemes in Europe could have delivered greater environmental and safety benefits - ITF report
Fri 15 July 2011
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Car fleet renewal - or scrappage - schemes introduced in the US, France and Germany fell short of their potential to deliver on environmental and safety objectives, according to a new report published by the International Transport Forum.
The focus of the 70-page study are three of the largest car fleet renewal schemes which were introduced mainly to stimulate economies following the 2008 economic crisis. It investigates the impact on CO2 and NOx emissions of 2.8 million transactions in which old cars were traded for new vehicles under scrappage schemes in France, Germany and the United States.
The report - prepared by Dutch research agency TNO, with support from ITF and OECD Environment Directorate experts - assesses the value for money of the different schemes and identifies critical design elements for ensuring success in meeting environmental and safety objectives.
In the US, there were positive results from targeted incentives with regard to fuel economy. However, the report says, these incentives were not designed to achieve the optimal improvements in fuel consumption or pollutant emissions. In the German scheme, a greater number of lighter and smaller vehicles were traded in for medium sized vehicles which reduced its effectiveness. The French scheme benefited from imposing a type-approval C02 limit for new cars and retiring very old high emission vehicles. However, this led to a very high share of new diesel vehicles which strongly limits lifetime NOx benefits.
While all three schemes did help to reduce CO2 emissions, the report says, the financial value of that impact was quite small: less than 5 million Euros ($7m) in the US and less than 10 million Euros ($14m) in France and Germany. The financial impact on NOx emissions appears to be significantly higher, reaching about 300 million Euros ($430m) in the US, c. 300 million Euros ($430m) in Germany and c. 100 million Euros ($144m) for France.
The report concludes that it is vital for policy makers to consider the objectives of the schemes very carefully when setting their design parameters. Whilst scrappage schemes have the potential to deliver on objectives such as reducing pollutant emissions, these have not done so as well as they could, precisely because of their design characteristics.
Jack Short, the ITF Secretary General said: “Subsidies for car renewal can bring real benefits only if they are carefully designed. Here a best practices approach is key. We hope that comparative studies like this one will help countries pondering similar schemes to find the right solutions for them.”
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