Abstract

Transportation has become France’s (and more generally Europe’s) weak link in the race to decarbonize: this sector accounts for one-third of the country’s greenhouse gas emissions, and unlike industry or energy, its emission levels have hardly decreased over the past thirty years. This makes reducing emissions from transportation a crucial policy challenge. While the electrification of the automotive fleet is rightfully a cornerstone of the national strategy, this Note argues that carefully taking into account usage, and especially the dynamics of the second-hand car market radically changes our understanding of policy effects, and suggests novel strategies to effectively reduce emissions at a lower cost to car users, carmakers, and public finances. France is characterized by an aging vehicle fleet and a highly active used car market. Moreover, large corporate fleets, accounting for nearly half of new vehicle registrations, are slow to transition to electric vehicles despite supplying the second-hand market. The dynamism of this market raises questions about the effectiveness of public policies promoting the early replacement of internal combustion engine vehicles with electric ones. Drawing on existing data, original surveys, and simulation studies, our analysis shows that a internal combustion engine (ICE) vehicle sold on the used car market still emits around 60% of its lifetime emissions, even if equilibrium impacts of scrappage and new sales are taken into account. Thus, policy should influence vehicle choice at the time of purchase, rather than the timing of the purchase itself