Car emissions limit ‘would boost economy’, study finds

Report says that Commission’s proposed rules would create around 400,000 jobs.

A study out today (18 March) says that proposed European Union limits on the amount of carbon dioxide that can be emitted by cars and vans would cut running and maintenance costs by €35 billion a year and create 400,000 jobs. The study comes ahead of a debate on the European Commission’s CO2 proposal in the European Parliament on tomorrow (19 March).

The study, by UK-based consultancies Cambridge Econometrics and Ricardo-AEA, is the first major analysis of the economic effects of the proposed limit of 95 grams per kilometre (g/km) apart from the Commission’s own impact assessment.

The Commission wants the limits to take effect in 2020. The study found that in the short-term the limit would add about €1,000 to the cost of the average car, compared to the average car manufactured in 2010. But this would be offset within several years by fuel savings of around €400 per year, leading to net savings worth around €3,800 over the lifetime of each car.  

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The increased spending on technology needed to hit the emissions target would lead to job creation in the manufacturing of fuel-efficient automotive components, and would provide a general boost to the economy as a result of reduced spending on imported oil, the study found.

Fuel efficiency in the 90g-95g/km range would create 350,000-450,000 additional jobs by the time the entire EU fleet reaches the standard, while the impact on gross domestic product would remain neutral to mildly positive, the study found.  

The Commission’s proposal has split Europe’s automotive industry. German automakers, who specialise in larger, heavier cars, are opposed to the limits. French and Italian automakers support it. The carmakers already have to meet a target of 130g/km by 2015, and are on track to do so well ahead of schedule.  

Germany is pushing for the inclusion of a ‘super credits’ scheme, in which electric cars would count more than polluting cars toward meeting the target. The Commission and environmentalists say that this would dilute the target.