In order to incentivise people away from car ownership, the government should introduce a new model of scrappage scheme for private vehicles. This could build on the government-funded scrappage scheme launched to incentivise new car purchases following the financial crisis. Anyone selling a private car which met certain baseline requirements (e.g. not being an electric vehicle, duration of ownership etc) would receive credit in proportion to the harm the vehicle does to the environment (based on age, engine size etc).
However, the aim here would not be to get people to buy a new car. Indeed, given that roughly one third of the lifetime emissions of a car come from production [Mike Berners-Lee, There Is No Planet B, 2019], incentivising old-for-new car replacement before the end of a car’s lifetime would be actively detrimental (particularly if scrapping newer and more efficient cars, for which the lifetime emissions will be weighted even more heavily towards production).
Instead, anyone scrapping a car could receive credit which could be used to fund a range of more sustainable transport options – everything from bikes (including cargo bikes and e-bikes), to bus passes, car club memberships or rail season tickets. This would incentivise individuals to make a modal shift in their transport choices, away from private cars and back towards public or active transport options.
Scrappage money would be substantial, and might well outstrip a one-off purchase of something like a bike or bus pass. Credit would therefore need to be carriable forwards, across multiple years or multiple purchases. This would mean individuals have a greater range of options – it would be possible to buy a bike, but also purchase a travel card for winter months, or to keep an electric bike in good repaid. A single voucher (such as those currently offered by government for bicycle repair) would therefore not be the best way to implement the scheme.
Instead, digital “green bank accounts” could be created, utilising the same technology as digital-only challenger banks. Scrappage money could be put into such an account, and a payment card provided (so that online purchasing is possible), with a lock on the types of purchase or retailers at which the card could be used (to ensure that funds are used for sustainable transit and not anything else). This could be automated based on the technology commercial banks use to flag potentially fraudulent purchases. There would be no need for retailers to register specially with the scheme, and any participating retailer would be paid immediately, without having to submit additional paperwork.
The strength of this scheme is that, once the infrastructure for “green bank accounts” is established, it could be used for a range of other projects. For example the same infrastructure could be used for allocating funding for retrofitting housing through something like the green homes grant (which has faced problems in terms of providing grants to individuals). This would accelerate the growth of such schemes, helping the UK to meet its greenhouse gas emission reduction targets and tackle the climate crisis.
1826-11