Demand Reduction > VSS-BR-2-Blue

Vehicle Scrappage - Blue Design

Policy name: Vehicle Scrappage Schemes

Reference: No.F/P/010

Date last updated: 03/09/2007

Policy approach: Fiscal

Policy target: Vehicle purchase

Policy description

A financial incentive offered to drivers of older vehicles to prematurely remove their vehicle from the road before the vehicle’s lifespan is exhausted.

Where implemented

Denmark (1994 to 1995); Canada (British Columbia); France (1994 to 1996); Greece (1991 to 1993); Hungary (1993 to present); Italy (1997 to 1998); Ireland (1995 to 1997); Norway (Only ran in 1996); Spain (1994 to present); USA (Selected states).

Targeted mode(s)

Car

Impacts on energy

(-) Improved efficiency of vehicle stock;
(-) Reduced carbon emissions;
(-) Higher vehicle turnover/ energy input into manufacture and disposal;
(+) Increased vehicle mileage

Potential carbon savings:

Cost of implementation:

£ £ £

Certainty of delivery:

Public acceptability:

Barriers to implementation

Funding; Income; No accurate way of identifying gross polluters; Rebound effect

Advantages

Environmental: Could speeds up the rate of introduction of more efficient technologies with regards to fuel consumption, engine efficiency & emissions to the car fleet as a whole.
Economic: May stimulate the purchase of new vehicles, economically benefiting motor manufacturers.
Social: The scheme reduces in transaction costs associated with privately selling a vehicle, benefiting households; May lead to urban air quality improvements.

Disadvantages

Environmental: Participants may increase their vehicle miles travelled owing to driving more reliable vehicles; Uncertain emissions benefits.
Economic: Fewer components may be available for the used vehicle/parts market.; Could increase the costs of new vehicles.
Social: If vehicle miles travelled are increased owing to the policy, then increased noise pollution and congestion levels may be experienced.

Equity issues

May have adverse impacts on low income households by significantly affecting the price of the lowest cost vehicles on the market.
Cash-for-replacement scrappage schemes, particularly those that stipulate participants have to purchase a brand new car, are inequitable to low income households as it is unlikely they will be able to afford to purchase a new car, even with the fee gained from participating in the scheme.

Potential policy synergies

Car emissions testing; Congestion charging; Car Labelling; End-of-Life Vehicles Directive; Low emission zones; Mandatory minimum standards; Vehicle Excise Duty; Voluntary Agreements .

Potential policy clashes

Vehicle purchase tax

Vehicle Scrappage - Blue Design

UKERC

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