Is the car scrappage scheme helping the environment?

Despite the pollution caused by manufacturing new cars, carbon emissions are a quarter lower than in the vehicles they replace
Car scrappage in the UK looks like it's achieving its goal. For the first time in 15 months, new car registrations rose rather than fell, with a modest increase of 2.4% in July. You can almost hear the industry's relief as it comes up for air after more than a year of plummeting sales, job losses and frozen production lines.
But what about claims that the scheme is also having some environmental benefits? Can it really be the case that swapping your much-loved — and possibly well-maintained — jalopy for a shiny new motor actually reduces emissions? In an attempt to answer that question, let's crunch the numbers on scrappage.
Looking at the first 77,000 applications, the average tailpipe CO2 figure for scrapped cars is around 179g/km, compared to a much lower 134g/km emissions average for new cars bought through the scheme. That's a reduction of 45g/km (25%), more than you would expect going on average car data alone: the average new car's CO2 emissions has fallen by just 18% over the last 13 years, the typical age of a scrapped car.
Two factors seem to be driving this reduction. The first is the switch to diesel cars, which have lower CO2 emissions. In 1999, diesel accounted for only 17% of the UK market; that figure now stands at around 44%. The second factor is that, following the fuel hikes of 2008 and the ensuing recession, UK car buyers were already looking for smaller, more fuel-efficient models — the super-mini segment (cars such as the Smart ForTwo) accounts for 37.5% of all registrations. The scrappage scheme helped to continue these trends at a time when UK car sales had dried up. .
Data from the US suggests that its 'Cash-for-Clunkers' scheme is achieving even bigger tailpipe CO2 cuts — new cars bought through the US scrappage scheme are "on average 63% less polluting".
But what about all the carbon emissions generated by making a new car? Surely this outweighs any tailpipe benefits? Well, on average, car vehicle manufacture accounts for 10%-15% of lifetime emissions, so it's not a show-stopper as far as the scrappage scheme is concerned. In any case, manufacturing emissions have fallen (by around 3-5gCO2/km over the life of the car since 1999).
One killer blow often aimed at car scrappage is that, while it may offer some environmental benefit, the 'cost per tonne of CO2 saved' is way off the scale and the money would be better spent elsewhere to reduce emissions. The World Resources Institute (WRI) suggests the US scheme is costing about $500 for each tonne of carbon eliminated.
There are two points to say on cost: first, the scheme is not primarily a carbon reduction measure, its original aim was to save jobs. Second, as sales of new cars pick up, the Treasury is set to get back most of its £150 million investment through increased VAT revenues. In other words, by the end of the scheme, it won't have cost the government or the taxpayer a bean.
• Ben Lane is the managing editor of WhatGreenCar