Boys find 'Cash for Clunkers' scheme wouldn't work in NZ

Many of the people Jordan Milbanke (left) and Dean Ward interviewed would consider trading in their cars. Photo / Alan Gibson

The "Cash for Clunkers" programme that has been successful in the United States would not have the same impact in New Zealand, say two young researchers.

Jordan Milbanke and Dean Ward, of Tauranga Boys College, discovered in a Year 10 assignment that the scheme - in which the Government offers a discount for car owners to trade in gas-guzzlers for more fuel-efficient vehicles - would not be as relevant or cost-effective Downunder.

More than half of the 80 New Zealanders the 14-year-olds interviewed would consider trading in their cars if offered a $2000 discount voucher on a newer, smaller vehicle.

But the students found that even if the scheme had an overwhelming response, with 100,000 people buying new cars, the reduction in carbon emission would be just 0.3 per cent.

This would come at a cost of at least $200 million to the Government. This was based on the calculation that a small car emits 2.2 tonnes of carbon dioxide a year, 1.9 tonnes less than a medium-sized car.

"We didn't come to a definite conclusion, but the results did suggest it wouldn't really stimulate the economy here, or reduce carbon emissions by very much," said Jordan.

He and Dean also found a different cultural attitude to large cars. While Americans supposedly used gas-guzzling vehicles as family cars, in New Zealand many truck or four-wheel-drive owners needed their larger car for work purposes. Therefore they were less likely to upgrade to a smaller car.

Motor Industry Association chief executive Perry Kerr said there were economic and environmental merits to a Government-funded upgrade of the car fleet, but the parameters of such a programme would be very different in New Zealand.

Mr Kerr said the incentive of the Cash for Clunkers programme in other countries - to bolster a flagging automotive industry - would not be as relevant here. He said the schoolboys' proposed Government discount of $2000 would be too little. The association would recommend a $4000-$5000 incentive.

The Government has no plan to replicate the Cash for Clunkers programme, but the Ministry of Transport has tested two schemes in which cars that could not get a warrant of fitness were crushed. Their owners were given compensation in cash and public transport vouchers.

"These schemes had some success," said Mr Kerr. "But we've said the focus should not simply be on big cars, but on the worst polluters, which are usually old diesel vehicles."

The US Congress introduced the car allowance rebate system in July, offering owners of old cars and trucks US$4500 if they bought a vehicle which ran 4 kilometres per litre further than their previous one.

The initial US$1 billion set aside was exhausted within a week of the programme's beginning, with an estimated 250,000 cars bought. Similar programmes in Germany and France have also seen the number of cars sold by local manufacturers increase.

Carbon emissions in NZ have increased by more than 70 per cent between 1990 and 2006 - the highest rise among OECD countries and more than double the global average.