Despite widespread criticism following the July 2010 election pledge and a detailed review of all the flaws in similar programs introduced around the world, the federal government is pressing ahead with plans to introduce a Cleaner Car Rebate scheme.
The $394 million taxpayer funded scheme aims to take 200,000 pre-1995 vehicles off Australian roads by paying car owners a $2000 subsidy to scrap their vehicle. Funds will be diverted from existing environmental programs to pay for the scheme.
In July, the government announced that the scheme would be introduced from 1 January 2011. However, the minister responsible for the scheme, Senator Kim Carr, announced on 6 November that implementation would be delayed until 1 July 2011 "to ensure a smooth roll out".
The Department responsible for the administration of the scheme is AusIndustry.
AAAA executive director Stuart Charity said the scheme was ill conceived, open to rorting and abuse and will cost jobs while delivering no tangible benefit to the environment.
"This is another pink batts debacle waiting to happen, but this one is on wheels," Charity said.
No tangible environmental benefits
A Dutch study published in 2000 showed that up to 20 per cent of a car's lifecycle emissions are produced during its manufacture and that from an environmental perspective, the optimal vehicle life is 19 years.
In calculating the environmental benefit of the Cleaner Car Rebate, no account was taken of the emissions resulting from the production of the 200,000 new vehicles put on the road, Charity said.
He said the European Commission and European Federation for Transport and the Environment have both urged the abandonment of scrappage subsidies, because they do more environmental harm than good, by artificially accelerating the car lifecycle.
"The fundamental flaw in vehicle scrappage schemes is that they focus on vehicle age rather than actual emissions produced," he said.
"This approach is based on the erroneous assumption that old cars are dirty cars. However, the true culprits are gross polluters – vehicles of any model year that are poorly maintained.
"The truth is many 15-year-old cars in good condition will achieve better environmental performance than vehicles listed on the government's Green Vehicle Guide, particularly the four-wheel-drive SUVs and utes."
To qualify for the rebate, the purchased vehicle must score six or higher on the Green Vehicle Guide 10 point greenhouse rating. The emission limit at level six is 220 grams of carbon dioxide for every kilometre driven. This is not a high bench mark, Charity said, as it is about the average for most new cars available on the Australian market.
He said the decision to press ahead with the introduction of the Cleaner Car Rebate scheme is in direct contradiction to research released by the Department of Environment, Water, Heritage and the Arts in September 2009, which found that "replacing older vehicles with newer vehicles, without significant changes in the mix of vehicle sizes, engine capacities or fuel types, would not result in significant greenhouse gas emissions benefits".
"Do we need to give 200,000 people $2000 of taxpayers' money to buy an imported car that delivers average environmental performance, when the car they own now could achieve significant improvements in emissions performance after a simple service?" Charity said.