On- and off-road diesel engines
Action 6.2: Stricter regulation of international trade in second-hand vehicles
In 2014 the top-five exporting countries in the world exported used vehicles to a value of ~18 billion US$, and 20% of all these vehicles ended up in low or lower-middle income countries (Coffin et al. 2016). In effect, the Action Stricter trade regulation would operate via export/ import restrictions on vehicles in accordance with their PM2.5 emissions.
6.2b Initiate international agreement on international trade of secondhand vehicles
Secondary: Non-binding/diplomatic policy statements
6.2b WTO Committee on Trade and Environment
Two components of this action can be considered. First, national export/import regulations can add requirements on PM2.5 emissions (Component 6.2a). Second, steps can be taken to initiate an international agreement on international trade of second-hand vehicles (Component 6.2b).
Component 6.2a. National PM2.5 standards in export/import regulations
National export/import regulations would mean that vehicles with the best available emission reduction technology should be incentivised. The strictest version of this would be to demand functioning emission control systems and installed diesel particulate filters, while softer versions would be to implement stronger Euro-differentiated export/import taxes/tariffs on vehicles or to apply allowable quotas of total second-hand import. As diesel vehicles are more significant in terms of black carbon emissions than gasoline vehicles, the regulations suggested above would be more effective if targeting diesel engines in the first place. PM2.5 standards in import/export regulations could be relatively easily and quickly introduced given that many countries already have regulations on trade of vehicles (UNEP and UNECE 2017). Even though this component is aimed at national governments with large import of second-hand vehicles, an endorsement from international fora such as the Arctic Council or the UNECE could provide further motivation.
There is some evidence of the effects from export/import restrictions on emissions. Davis and Kahn (2010) find that the trade in used vehicles between the US and Mexico increases total emissions of CO2 while decreasing total emissions of local pollutants such as particles. This variance should be due to differences in national emission regulations in the countries at the time of the study. A USMexico second-hand vehicle trade scenario analysis made by the Global Fuel Economy Initiative (Macias et al. 2013) indicated that if 15% of the current trade would be impeded due to environmental requirements, the Mexican emissions of PM2.5 from light-duty vehicles would go down with some 3.4%. On a global level Coffin et al. (2016) show that an extensive import ban from 140 countries would reduce second-hand vehicle imports by 76% while tariff-based solutions would reduce second-hand vehicle import by 38%.
Russia is a large importer of second-hand vehicles. In 2017, the country introduced a vintage-based import-tax scheme on second-hand cars (UNEP and UNECE 2017). This scheme can be complemented with PM2.5 requirements to avoid higher PM2.5 emissions from imported pre-Euro 6 diesel and gasoline cars.
Component 6.2b. Initiate international agreement on international trade
Given the risk of trade moving to other geographical regions in response to unilateral initiatives there are also reasons to contemplate larger international agreements. The process of creating an international agreement on the trade of second-hand vehicles can therefore be considered a second component of the Action Stricter regulation of international trade of second-hand vehicles. Today there is no existing second-hand vehicle trade agreement to build upon (UNEP and UNECE 2017). The World Trade Organization (WTO) member states could investigate the possibility to address their country representatives at the WTO Committee on Trade and Environment to start discussions on this. This component is a long-term endeavour with multiple preparatory steps required, and there is to this date no related evidence presented.