Research backs up France’s 2040 ban on diesel and petrol vehicles
France’s announcement of a ban on sales of vehicles powered by internal combustion engines1 could be beneficial for the economy as well as the environment, according to research carried out by Cambridge Econometrics for the European Climate Foundation.
Increased GDP and more jobs
In the analysis En Route Pour Un Transport Durable, CE modelled a scenario that was slightly less ambitious than this announcement2. In the modelling analysis, GDP was around 1.4% higher in 2050 than in a case with no change in fuel efficiency or powertrains after 2015, and around 240 thousand additional jobs were created in the French economy in the same year.
Clear benefits, but also challenges to policymakers
The deployment of advanced powertrains in France will have a number of beneficial impacts. As well as leading to substantial CO2 reductions, it will reduce tailpipe emissions (improving air quality and potentially solving Paris’ smog issues).
There are also substantive economic benefits: the motor vehicle manufacturing sector benefits from increased demand for fuel-efficient vehicle components; consumers benefit from the lower total cost of ownership of advanced powertrain vehicles in the future; and the energy sector benefits from increased demand for electricity (at the expense of imported fossil fuels, also increasing energy independence).
The transition to advanced powertrains will also pose challenges, however. These include the reduction in traditional automotive manufacturing jobs, the provision of the substantial infrastructure required to support advanced powertrains (such as EV recharging facilities) and the public sector funding challenge presented by decreased fuel revenues.
2 In this scenario, alongside the deployment of fuel-saving technologies, ICEs are largely phased out of new sales in 2040 and replaced by a mixture of hybrids, plug-in hybrids, battery electric and fuel cell vehicles. The proposed vehicle scrappage scheme did not form part of this scenario.
For more information about this study or to discuss how Cambridge Econometrics can help provide insight on related topics, please contact Sophie Billington.