The Government is exploring a taxpayer-funded “car scrappage scheme” – already tried in France and the US, and being discussed in Italy – to ease the pain of vehicle excise duty (VED) rises for more polluting cars. Last month, it was revealed that about 2.3 million people will be made worse off – twice the number of people still losing out because of the scrapping of the 10p tax rate. Hardest hit will be owners of older, band F family cars – such as Citroen C8, the Renault Espace and the VW Passat – who will see their £210 car tax rise to £430 or £455 by 2010.
The Environmental Audit Committee recommended that the Treasury urgently investigate scrappage schemes. However, it added: “In any scheme that were implemented, it would be important to ensure that high emission vehicles were genuinely scrapped - with as much of their materials recycled as possible - rather than allowed to stay on the road under different ownership, for instance in another country.”
The idea is supported by the environmental pressure group, Friends of the Earth, and would provide a grant of up to £1000 for anyone trading in an older ‘more polluting’ car against a newer ‘cleaner’ model. The pressure group said the Treasury could easily afford such a scheme because it will rake in an estimated £735m by 2010-11 – a figure that has fuelled criticism that the shakeup is a revenue-raiser, not a ‘green’ tax.
Tony Bosworth of Friends of the Earth said: “We’re delighted that the Committee has urged the Treasury to consider our suggestion of a car scrappage scheme. Three times more second hand cars are bought each year than new ones - so upping VED on old polluting vehicles will encourage people to choose greener models, cut fuel bills and lower carbon dioxide emissions. Paying people to scrap their old gas-guzzler and replace it with a cleaner car will make this cheaper and easier to do.”
Ronnie Campbell, the Blyth Valley MP, said he would be satisfied if people were compensated to scrap their cars. Mr. Campbell said: “I think it would be feasible if the Government encourages getting cleaner cars on the road by giving people the money it will cost to scrap their old car.”
In evidence to the committee last month, Treasury Minister Angela Eagle said of the French scrappage scheme: “It is certainly something that we would not be averse to looking at.”
In Texas, motorists can receive vouchers worth more than £1,750 towards a hybrid car if abandoning a polluting vehicle. From next year, Canadians will get £150 or subsidised bicycles or public transport. Similar schemes are also to be trialed in Italy and New Zealand.
Many European countries have tried similar schemes with patchy results.
Glass’s Guide, publisher of the trade used car price bible, has hit out at the idea for picking on the wrong target. Older cars are not necessarily the worst polluters, it said, and any new buyers will probably be attracted to cheaper imported cars. The point has also been made that making new cars is much more environmentally damaging than continuing to use old, if dirty, existing ones.
Dr Paul Nieuwenhuis, the Cardiff Business School’s assistant director for automotive industry research, is unsure that the British love of mid-range cars would fit in with a new for old programme. In markets like France and Italy, where demand for supermini sized vehicles is huge, owners have tended to swap like with like. Nieuwenhuis is not convinced that the driver of an ageing Sierra, unable to afford a Mondeo, would view a Ka as an ideal replacement.
As for the environmental advantages of junking older models, even this is the source of some lively debate. There’s an argument that a lot of energy is used to build a car in the first place, and so crushing it before the end of its useful life is wasteful. “The industry tends to down play the costs of production and disposal” says Nieuwenhuis, who reckons that up to 20 per cent of a car’s lifetime energy consumption is accounted for by production. But scrapping today’s ten-year old cars would be even more wasteful; in the 1970s production accounted for up to 45 per cent of energy use.
Dr Nieuwenhuis also commented:
Unnecessary car use is one element, but we need to separate car ownership from use. Owning a heavy car has a limited impact if you do not drive the thing. The impact is then limited to its production impact – typically around 20% of lifecycle impacts, with around 70% for use and the remainder for
ELV processing, recycling, etc. – these much lauded activities are not without environmental cost.
It is much better to keep the vehicle for a very long time and avoid, or at least postpone the end-of-life phase. Currently some 12-15 million tonnes of automotive waste is produced each year in the EU alone. Much of this is recyclable metal, but much still goes to landfill. This waste-stream may have to be reduced significantly, unless a sustainable use can be found and a sustainable processing phase introduced to close this loop.
In fact, back in November 2003 the Government wholeheartedly endorsed when the then Minister for Trade and Industry Patricia Hewett presented the Charles Ware Morris Minor Centre with a prestigious National Green Apple award for their environmental contribution to the car industry.
What all this shows is that, while a scrappage scheme is trumpeted as being an Environmental ‘fix’ it actually has the effect of generating sales for the motor industry far above what they could reasonably expect to achieve were the scheme not available, with the attendant increases in tax revenue for any government that implements such a scheme.
As Dr Nieuwenhuis says, it is far better to extend the life of existing vehicles and postpone the day when they require scrapping.
A well maintained, older car, while not as ‘clean’ as a modern one is not the Environmental scourge it is branded as.
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