Forget about scrapping cars; scrap the subsidies instead

April 20, 2009

Jos Dings writes in today's Financial Times: Your editorial on car scrapping schemes (Crushing problems, April 14) was scathing, and accurate. However, your contention that 'new cars tend to be better than old ones' is only partly true.

Although the European Union recently agreed new fuel efficiency standards for new cars, industry lobbying resulted in the targets being ‘phased in’, read postponed, until 2015. Progress over the last decade has been abysmal: the average car sold in Europe in 2007 guzzled just 1.7 per cent less fuel than the previous year’s model.

The wildly popular German subsidy scheme doesn’t even differentiate. That means a motorist who scraps a 1999 Volkswagen Lupo TDi 3L, the most fuel-efficient car ever mass-produced in Europe (2.99 litres per 100km, or 81g CO 2 per km) and buys a 2009 Porsche Cayenne Turbo (14.9l/100km, 358g/km) would still receive the full taxpayer-funded payment.

Even if the hand-outs were designed to encourage owners of old gas guzzlers to trade in for a fuel sipper, that just rewards those who were irresponsible in the past.

VCD, a German environmental organisation (and member of T&E), has argued that the subsidies should also be available to those who want to scrap their old car for a bicycle or public transport tickets.

Supporters have been sending claim forms to the government department responsible for the car rebate scheme, who responded by threatening legal action. Nice. The bicycle industry, it seems, doesn’t merit government support.

Meanwhile carmakers, which have spent decades overproducing and lobbying against fuel efficiency standards, do. That is absurd. Instead of scrapping cars, governments should scrap the subsidies.

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