An analysis of CO₂ abatement by front-loading replacing vehicles due to tax cuts and subsidies for eco-friendly vehicles

Abstract

In Japan, the tax cuts and the subsidies on eco-friendly vehicles became effective on April 1, 2009. Due to the schemes, people would renew to a new car prior to the primary life time of a car. Thus, we examined the effect of CO₂ abatement by front-loading replacing vehicles. In particular, we compared the CO₂ reduction due to the improvement of fuel efficiency to the amount of CO₂ increase, whose factors are ‘rebound effect’ and ‘discharge of manufacturing vehicles’. We categorized vehicles into six types, hatchback, minivan, hybrid vehicle (HV), saloon, light vehicle, and others (SUV, convertible). In the case where consumers replace their cars to the following three types (hatchback, minivan, and HV), the CO₂ abatement which divided consumers into household attributes in order to examine difference in expense was estimated. The result showed that a household expenditure would increase due to tax cuts. In addition, if consumers except a single-person household replace their vehicles about 1~10 years earlier than originally plan, there may be no reduction effect when replacing with minivan and/or hatchback. Conversely, the net reduction effect only appears in a single-person household at 1~5 year earlier than originally plan and in case of replacing their cars to HV prior to the vehicle lifetime.