[A-List] Scrap It

Bill Totten shimogamo at ashisuto.co.jp
Fri Mar 13 18:59:35 MDT 2009


Pay drivers to scrap their cars?

We might as well burn ten-pound notes in power stations.

by George Monbiot

The Guardian (March 10 2009)

The magic numbers spin before our eyes. No one can grasp the scale of
the hand-outs, or understand how public money which didn't exist - could
never exist - for hospitals or schools or public toilets begins to flow
as soon as the bankers fall to their knees. We are punch drunk, reeling,
uniquely vulnerable - because none of it makes sense any more - to new
demands from every species of scrounger.

So prepare yourselves, ladies and gentlemen, for the worst scam of all.
It's another reward for failure, but this one offers no prospect of
rescuing the economy. Thanks to its cunning disguise as an environmental
measure, we seem willing to be conned. I want to show you why we should
resist it.

I'm talking about the scrappage payments being proposed by almost
everyone linked to the motor industry: the Society of Motor
Manufacturers and Traders {1}, most of the big car firms {2}, the AA {3}
and the unions. Lord Mandelson is said to be a fan {4}. They argue that
drivers should be paid around GBP 2000 a head to scrap their old cars
and buy new ones. As well as saving the jobs of hundreds of thousands of
workers, this, they say, will catalyse a low carbon transport
revolution. It's bunkum.

Let's start by getting a misconception out of the way. The media are
reporting the proposal as a subsidy for switching to smaller, more
efficient cars. But the manufacturers have called for no such thing. The
model they keep referring to is Germany's. Here drivers are being
offered E2500 to trade in cars at least nine years old for new models.
The only requirement is that the new cars meet the Euro 4 standard on
exhaust emissions {5}. This is another way of saying all cars: since
2005 every new car on sale in the EU has to meet this standard, which
has nothing to do with carbon dioxide. So GBP 2000 from the government
could help you trade in your old Citroen C1 for a new Porsche Cayenne.

There is a simple way of working out whether or not a green subsidy is
worthwhile: how much does it cost to save a tonne of carbon dioxide? No
one appears to have done this yet so, if you'll bear with me, I'll
attempt it here. I've had to make a few assumptions where data don't
exist, but it gives us a rough idea of what we are exposing ourselves to
(all the sources, as usual, are on my website).

Let's imagine that the average age of the scrapped cars is twelve years.
In 1997 new cars in the UK produced an average of 189.8 grams of carbon
dioxide per kilometre {6}. If they've become ten per cent less efficient
since then, their average output will be 208g/km today.

Cars manufactured this year will put out an average of around 160g/km
{7}, which means a saving of 48g/km. This translates - with a mean
annual driving distance of 16,500km {8} - into a cut of 792 kilograms
per car per year. Assuming that drivers are each paid GBP 2000, that's a
cost of GBP 2525 for every tonne of carbon dioxide avoided, divided by
the average age of the cars on the road - 4.9 years. You'd get almost as
much value for money by reclassifying ten-pound notes as biomass and
burning them in power stations.

The management consultants McKinsey have calculated the costs of saving
carbon dioxide by other means {9}. We could do it for GBP 3.50 a tonne
by investing in geothermal energy, or GBP 9 if we put our money into
nuclear power plants. Mini hydroelectric schemes would save money as
well as carbon against normal electricity prices. So would energy
efficiency: switching from incandescent light bulbs to light-emitting
diodes, for example, saves GBP 80 for every tonne of carbon dioxide you cut.

I would have liked to give you some transport comparisons, but McKinsey
doesn't publish figures for public transport or for promoting walking or
cycling (a McKinsey consultant wouldn't be seen dead on a bus). Nor, as
far as I can discover, does the government. The carbon payback for other
projects - creating better cycle lanes in towns and coach lanes on
motorways, helping children to walk to school, better enforcement of
speed limits, better timetabling for buses - is likely to be hundreds or
thousands of times higher than any returns from the scrappage scam.

In fact I have grossly overstated the scheme's value for money. My rough
figures take no account of the rebound effect: when driving costs you
less (after buying a more efficient car), you are likely to travel
further {10, 11}. Nor have I considered the fact that many people would
have bought new cars anyway, which means they'll be given the money for
nothing. Without this subsidy, others might have stopped driving
altogether and started cycling or using public transport instead: in
this case the scrappage scheme will have raised their emissions. Nor did
I calculate the carbon costs of manufacturing the new cars.

A paper published in 2000 by the journal Transportation Research comes
to even grimmer conclusions: that replacing old cars with new ones
increases carbon pollution {12}. Because between fifteen and twenty per
cent of a car's emissions are produced during its manufacture, the
optimal age for a car, the paper says, is nineteen years. (The average
age of the UK's fleet is 4.9 years {13}). If the paper's assumptions
hold (they may be out of date now), it would make more sense for the
government to pay us to keep our old bangers on the road.

Low-carbon transport? Pull the other one. Scrappage schemes are nothing
but hand-outs for the car firms, resprayed green to fool the incautious
buyer. The motor trade wants the money because it's collapsing. Some
companies - notably Vauxhall and the rest of the General Motors group -
are in imminent danger of insolvency {14}. So the question changes:
should we support them regardless of their impact on the environment?

No. State aid rules forbid scrappage schemes from discriminating between
cars made here and cars made abroad. So, given that British car plants
assemble only around fifteen per cent of the vehicles sold in this
country {15, 16}, and given that the motor industry is highly automated
and has vast capital costs, this subsidy is likely to be just as bad at
saving jobs as it is at saving carbon. Every pound we spend on driving
is a pound withheld from the alternatives, many of which (such as buses
and trains) employ far more people for the same amount of money.

This leaves only the value of preserving the industry for its own sake.
It is hard to think of a less deserving cause. The motor companies have
repeatedly failed to anticipate trends in demand. They have carried on
producing thunderous gas guzzlers long after the market collapsed. Every
so often the bosses wring their hands about jobs, put out the begging
bowl, get the money then shaft their workers anyway. Like the bankers
they have wrecked their own industry. And like the bankers they want the
rest of us to pay.

www.monbiot.com

References:

1. http://news.bbc.co.uk/1/hi/business/7925484.stm

2. eg http://news.bbc.co.uk/1/hi/business/7924534.stm

3. http://news.bbc.co.uk/1/hi/business/7917643.stm

4. http://www.whatcar.com/news-article.aspx?NA=237910

5. http://www.smmt.co.uk/articles/article.cfm?articleid=19162

6.
http://www.foe.co.uk/resource/press_releases/uk_motor_industry_failing_25042006.html

7. Average emissions in 2007 were 164.9g/km. They fell by 1.4% from 2006
- http://www.lowcvp.org.uk/news/866/bulletin/. If this trend has
continued, they'll be 160.3g/km this year.

8. The latest available figures are for 1999-2001:
http://www.statistics.gov.uk/StatBase/ssdataset.asp?vlnk=7231&More=Y

The average distance might have increased a little since then.

9. McKinsey & Company, 2009. Pathways to a Low Carbon Economy: Version 2
of the Global Greenhouse Gas Abatement Cost Curve.
http://globalghgcostcurve.bymckinsey.com/default/en-us/requestfullreport.aspx

10. There is a wide range of estimates for the rebound effect in
driving. See for example this:

Kenneth Small and Kurt Van Dender, January 2007. Fuel efficiency and
motor vehicle travel: the declining rebound effect. The Energy Journal.
http://www.entrepreneur.com/tradejournals/article/156418724.html

and this:

11. http://www.rff.org/rff/Events/upload/20209_1.pdf

12. Bert Van Wee, Henri C Moll and Jessica Dirks, 2000. Environmental
impact of scrapping old cars. Transportation Research Part D 5, pages
137-143.
http://ivem.eldoc.ub.rug.nl/FILES/ivempubs/publart/2000/TranspResDvWee/2000TranspResDvWee.pdf

13.
http://www.channel4.com/news/articles/science_technology/ukbuilt+toyota+most+reliable+car/1084747

14. George Parker, 8th March 2009. Mandelson says Vauxhall is in
'trouble'. Financial Times.

15. The Office of National Statistics stopped collating data on car
production in 2007, on the grounds that the sector was no longer
sufficiently important (ONS, pers comm, 9th March 2009). So the last
comparable figuires are for July 2007, when 28,000 cars were
manufactured in Britain for the home market -
http://www.statistics.gov.uk/cci/nugget.asp?id=376

and

16. 186,000 new cars were sold here -
http://www.statistics.gov.uk/downloads/theme_compendia/MD-Feb-2009/MD-Feb-2009.pdf

Copyright (c) 2006 Monbiot.com

http://www.monbiot.com/archives/2009/03/10/scrap-it/

http://www.billtotten.blogspot.com
http://www.ashisuto.co.jp






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