Accelerated vehicle replacement schemes have been implemented in many countries around the world in recent years, often as part of a package of measures to stimulate economic recovery. These schemes are meant to have a number of different effects and can include:
The OECD, the International Transport Forum and the Fédération International de l'Automobile (FIA Foundation), under the aegis of the Global Fuel Economy Initiative, addressed the issue of car scrapping schemes and evaluated their safety impacts together with the impacts of selected car fleet renewal schemes on CO2 emissions, traffic safety and NOx emission impacts and undertook a qualitative assessment of impacts on emissions of particulate matter. The study did not look at employment or stimulus-related impacts.
The report "Car Fleet Renewal Schemes: Environmental and Safety Impacts" assesses three qualitatively different fleet renewal schemes: the French Prime à la Casse, the German Umweltprämie and the US Cars program, and their cost-effectiveness in relation to reducing CO2 and NOx emissions and improving road safety. These three schemes were selected as they each display different designs and have collected detailed data to undertake disaggregated analysis. The impacts of the schemes were monetised, providing an approximate evaluation of their societal cost-effectiveness in reducing CO2 and NOx emissions and improving traffic safety, and only evaluates how well fleet renewal schemes deliver benefits beyond what they may or may not deliver in terms of benefits/disbenefits related to automobile industry support.
The key messages from this study can be summarised as follows:
Figure 1: Cost-effectiveness of the French, German and US Fleet Renewal Schemes
From a societal perspective, the US scheme cost nearly EUR 1 billion in destroyed assets (scrapped vehicles). The largest monetised benefit comes from avoided NOx emissions (EUR ~500 M), followed by avoided casualties (EUR ~150 M), leading to a total quantified recovery of approximately 80% of the societal cost (represented here by the value of the scrapped vehicle). Given that other possible benefits of the scheme were not quantified or given, and accounting for the uncertainty associated with some of the numbers (e.g. the average value of the scrapped cars), the US scheme may have had benefits in line with its costs.
On a per-vehicle basis, the German scheme achieved lower CO2, NOx and safety impacts throughout. As a result, it was less cost-effective in delivering beneficial CO2, NOx and safety outcomes with the benefits quantified here representing only around 25% of the estimated costs.
The French scheme succeeded in targeting the right vehicles for scrapping and resulted in an estimated recovery of around 45% of the social costs, but a much higher societal value could have been reached through a more ambitious NOx reduction (which is the effect with the largest potential for delivering societal benefits).
One of the key findings of the report is the necessity to put in place targeted incentives and sufficient differentiation so as to capture not only CO2 or fuel economy benefits but also, more importantly, NOx and safety benefits since these benefits tend to outweigh the former for the fleet of cars targeted by fleet renewal schemes. Another finding is the need to design schemes that target older vehicles that are still in use – retiring vehicles that travel little provides minimal benefits.
Finally, there are trade-offs that may be involved in developing effective fleet renewal schemes in terms of environmental and safety benefits. Schemes seeking principally to reduce CO2 emissions or improve fleet-wide fuel economy should, perhaps counter intuitively, target more recent vehicles since their higher vehicle kilometre travel outweighs the per-kilometre emissions of older, less-used vehicles. It also underscores the need to control for the type of replacement vehicle chosen in the fleet renewal scheme – lower CO2-emitting diesels improved the CO2-profile of the French scheme but also eroded the lifetime benefits of the scheme due to an increase in more costly NOx emissions.