By Florian Sommer
Auto manufacturer bailouts have been a major focus of public attention and criticism. The populist cry ‘never again’ for unregulated hedge funds and bumper bonuses in the aftermath of the financial crisis is also loud on tax payer support for failing industries. How governments soothe the overburdened tax payer and prop up ailing automakers without promoting an unsustainable model is posing a difficult challenge.
Crucial to their response is whether governments perceive sustainability to be integral of their policy or whether they are just looking for a quick-fix to the global recession.
Japan and US are ahead of the class in dedicating stimulus packages for the ‘greening’ of the auto sector. Japan has scrapped acquisition taxes on hybrids, while reducing those on small vehicles. The stimulus funding can also accelerate a technological shift. For example, the EU has earmarked EUR 1 billion of research and development funding for green cars. The US is also funding research and development into advanced batteries and green autos to the tune of USD 2 billion.
The scrap credits offered by Italy, Germany, France and the UK leave much to be desired. These stimulus measures offer credits of between EUR 1000 and EUR 2500 for purchasing a new vehicle while offering an older model to be scrapped. In Germany it has been a runaway success. In the run-up to October elections, the government has even increased the funding from 1.5 billion to 5 billion after the scheme sold out in only a few months.
While such policies will remove a large number of inefficient vehicles from the roads, these one-off measures fail to demonstrate a vision for sustainable transport.
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