Better cars or older cars? Assessing CO2 emission reduction potential of passenger vehicle replacement programs

Shigemi Kagawa, Klaus Hubacek, Keisuke Nansai, Minori Kataoka, Shunsuke Managi, Sangwon Suh, Yuki Kudoh

Research output: Contribution to journalArticlepeer-review

44 Citations (Scopus)


The primary motivation for the vehicle replacement schemes that were implemented in many countries was to encourage the purchase of new cars. The basic assumption of these schemes was that these acquisitions would benefit both the economy and the environment as older and less fuel-efficient cars were scrapped and replaced with more fuel-efficient models. In this article, we present a new environmental impact assessment method for assessing the effectiveness of scrappage schemes for reducing CO2 emissions taking into account the rebound effect, driving behavior for older versus new cars and entire lifecycle emissions for during the manufacturing processes of new cars. The assessment of the Japanese scrappage scheme shows that CO2 emissions would only decrease if users of the scheme retained their new gasoline passenger vehicles for at least 4.7 years. When vehicle replacements were restricted to hybrid cars, the reduction in CO2 achieved by the scheme would be 6-8.5 times higher than the emissions resulting from a scheme involving standard, gasoline passenger vehicles. Cost-benefit analysis, based on the emission reduction potential, showed that the scheme was very costly. Sensitivity analysis showed that the Japanese government failed to determine the optimum, or target, car age for scrapping old cars in the scheme. Specifically, scrapping cars aged 13 years and over did not maximize the environmental benefits of the scheme. Consequently, modifying this policy to include a reduction in new car subsidies, focused funding for fuel-efficient cars, and modifying the target car age, would increase environmental benefits.

Original languageEnglish
Pages (from-to)1807-1818
Number of pages12
JournalGlobal Environmental Change
Issue number6
Publication statusPublished - Dec 2013

All Science Journal Classification (ASJC) codes

  • Global and Planetary Change
  • Geography, Planning and Development
  • Ecology
  • Management, Monitoring, Policy and Law


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