This car is gone to haven: EU exports of used cars

Imported used cars account for a significant share of the private car fleet in developing and emerging countries. In addition, the promotion of electric cars in developed countries and China is generating a huge stock of used internal combustion engine cars which could bring about an increase in exports of used polluting cars to lower income countries. This paper investigates the effects of country differences in the stringency of environmental policy about trade in used cars, using detailed export data from the European Union countries for the period 2017 to 2023. The results show that European Union exports of polluting used cars increase with increasing environmental policy distance between exporting and importing countries, while the exports of electrified used cars decrease. The potential for carbon leakage is huge and cannot be ignored, neither in global climate policies, nor in local air pollution and road safety considerations in the poorest countries.