Car scrappage schemes are not a motor industry green scam

This is not just a canny way to boost demand - we are serious about clean technology, says Paul Everitt

Paul Everitt
The Guardian, Thursday 19 March 2009

George Monbiot claims the scrappage schemes now being introduced by EU member states - to stimulate demand in the vehicle market, addressing the market fall from the banking crisis and delivering major environmental benefits - are "another reward for failure ... with no prospect of rescuing the economy" (This scam is nothing but a handout for motor companies, resprayed green, 10 March).
But the evidence is clear. In Germany the success of the scheme saw registrations climb 21.5% in February, up for the first time since July 2008, enabling vehicle manufacturers to postpone planned cutbacks. Meanwhile, Britain's registrations fell at the same rate that Germany's rose - leading to redundancies, reduced shifts and pay cuts.
Monbiot questions the environmental impact of scrappage schemes, describing their potential to catalyse a low-carbon transport revolution as "bunkum" and claiming that they "are nothing but handouts for car firms, resprayed green to fool the incautious buyer". In fact, the environmental credentials of such a scheme are widely recognised.
In 2008 average UK new car emissions fell by their biggest ever rate. The fall of 4.2% was achieved steadily throughout the year as an increasing array of environmental products were launched. Although the number of cars on the road and average journey distance may have increased, emissions from road transport continue to fall.
Cars now account for just 11.5% of the country's total CO2 emissions thanks to new technology and improved fuel consumption delivered through consistent fleet renewal, which scrappage incentive schemes aim to encourage. The emissions produced by a replacement model will almost certainly be far less than the one it is replacing. While Monbiot claims that, under a scheme like the German one, "£2,000 from the government could help you trade in your old Citroen C1 for a new Porsche Cayenne", research suggests most people will buy a new model at the smaller, lower-emitting end of the market.
The British motor industry has been transformed over the last decade, with cleaner technology at its heart. Contrary to Monbiot's claims that "motor companies have repeatedly failed to anticipate trends in demand", cars produced in the UK win market share worldwide. Less than a year ago the UK industry's biggest challenge was in meeting the high global demand for its products. That demand is not just for our famous prestige and niche models but, significantly, for the 28% of vehicles with emissions already below 140g/km, suggesting that Monbiot's claims of an industry "producing thunderous gas guzzlers long after the market collapsed" are inaccurate.
The motor industry seeks a co-ordinated European effort to stimulate demand, and to date Britain is the largest new car market not to respond. Monbiot claims a UK scrappage scheme would be "preserving the industry for its own sake". But with over 800,000 people employed in the sector and many more dependent on its success, do we really want to put at risk such a major engine for economic growth and a creator of high-value, highly skilled jobs?
• Paul Everitt is chief executive of the Society of Motor Manufacturers & Traders communications@smmt.co.uk