Provisional Measure 1,112/22 created the Program to Increase Productivity of the Highway Fleet in the Country – Renovar, announced as an incentive to replace old trucks with new ones.
There are many benefits suggested by the MP’s Explanatory Memorandum: Reduction of freight costs, accidents and deaths on highways and the emission of pollutants. There would also be increased efficiency and productivity in the transport sector, lower government spending on medical care for road traffic injuries.
They would improve the working conditions of truck drivers and reduce their maintenance costs. There would be stimulus to the recycling industry and job creation. Even falling inflation is placed on the list of benefits.
Also according to the Explanatory Memorandum, there would be no relevant fiscal cost, because the main source of financing would come from oil exploration companies. In its oil and gas exploration contracts, there is an obligation to invest in research and innovation. The MP establishes that resources applied in the Renovar Program will count towards the fulfillment of the obligation.
Many benefits and few costs! There are reasons to be suspicious.
No study was presented to measure the benefits listed above. The Explanatory Memorandum shows figures not directly related to a simulation of the impact of taking old trucks out of service. For example, he cites a study by IPEA, according to which “the costs of traffic accidents in federal states (…) are estimated at R$ 12.8 billion/year”. But these refer to all accidents, not those caused by mechanical failure in old trucks.
Many other generic data, from different sources, are piled up in the text. It is clear that the homework of estimating ex-ante the effective impact of the program was not done.
Basic questions are not answered. What is the total cost of the project? What benefits will be lost by reducing investments in research and innovation, replacing them with funding for the Program (which represents neither research nor innovation)? Are there successful international experiences that are adaptable to the Brazilian context? Would there be adverse side effects such as, for example, encouraging a polluting and inefficient means of transport? Is subsidizing more efficient than inspecting and removing unusable trucks from the roads? Does low income for truck drivers come from old trucks or from excess trucks on the market?
As the participation of oil companies is voluntary, there may not be enough resources to finance the program (unless it is pushed to Petrobras, which would be another attempt at undue intervention). Therefore, a door has already been left open for more public resources to enter the game.
The MP appointed the Brazilian Agency for Industrial Development (ABDI) as coordinator of the Program. It is a private law institution, not subject to budgetary rules, but financed by appropriations from the federal budget. Triangulation of funds between ABDI, state-owned companies or public banks would make financing possible with circumvention of tax rules.
But the central problem is that the MP does not limit the program to old trucks. It defines as “eligible asset” any “vehicle or equipment on wheels, motorized or not, or self-propelled machine, that meets the eligibility criteria of Renovar”. A decree can extend the program to all types of vehicles.
The auto industry has been lobbying for a fleet renewal subsidy for decades. In the Temer government, an attempt was made to implement a “Vehicular Support Program”, which was “focused on the carbon footprint of a green car” and aimed at replacing up to 1 million cars a year.
Could there be other environmental priorities, such as containing deforestation, with greater impact, and which would not subsidize large companies and high-income consumers?
It is worth remembering that when BNDES subsidized credit was given for the purchase of trucks, in order to renew the fleet and generate all the benefits now listed again, the result was a lot of profit for truck sellers and an excess supply of freight, which resulted in in the truckers’ strike.
Once again, a public policy is designed to meet private interests, seeking a narrative to present it as of public interest.
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