Is the Cash-for-Clunkers Program an Environmental Dud?

By Eliza Strickland | August 5, 2009 10:11 pm

clunkerThe popular “cash-for-clunkers” program instated by the federal government is clearly giving a boost to struggling auto companies by convincing people to trade in their old gas-guzzlers for new, fuel-efficient vehicles: More than 240,000 Americans have traded in their clunkers so far, and the program has already burned through its first round of funding [Time]. But as Congress debates adding $2 billion to the program, some calculations show that it may have only negligible environmental benefits.

The program‘s rules are lenient enough to raise the ire of some environmentalists–new passenger cars must have a fuel efficiency rating of only 22 miles per gallon, and must be only 4 miles per gallon more efficient than the old car being traded in for a consumer to get the $3,500 credit. Still, people have embraced not just the letter but the spirit of the law. Consumers are snapping up fuel-sipping cars, led by the Ford Focus and followed by models from Honda and Toyota. The average mileage of the clunkers was 15.8; the new cars average 25.4 miles a gallon. That’s a 61% improvement—much more than the program’s rules required [The Wall Street Journal, blog].

That all sounds like good news. But new calculations show that the improvements in fuel efficiency (and therefore the reduction in tailpipe emissions of greenhouse gases) will have little overall impact, because the program is relatively small. Calculations by The Associated Press, using Department of Transportation figures, show that replacing those fuel hogs will reduce carbon dioxide emissions by just under 700,000 tons a year. While that may sound impressive, it’s nothing compared to what the U.S. spewed last year: nearly 6.4 billion tons…. That means on average, every hour, America emits 728,000 tons of carbon dioxide. The total savings per year from cash for clunkers translates to about 57 minutes of America’s output of the chief greenhouse gas [AP].

Some researchers also worry about a phenomenon known as the efficiency paradox: as we get more efficient at using energy — through less wasteful cars and appliances — the overall cost of energy goes down, but we respond by using more of it. In the case of cars, that means driving more [Time].

Energy policy expert Michael Gerrard says that the cash-for-clunkers program can still be viewed as a success, but, ironically, it’s simply not a very efficient program. “It’s not that it’s a bad idea; just don’t sell it as a cost-effective energy savings method,” he said. “From an economic standpoint it seems to be a roaring success. From an environment and energy perspective, it’s not where you would put your first dollar” [AP].

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Image: flickr / dno1967

CATEGORIZED UNDER: Environment, Technology
  • http://clubneko.net robot makes music

    I wonder how much environment impact throwing up a billion dollars worth of solar farms near the biggest power-sucking cities might have.

  • Jason

    700,000 pounds is 700,000 pounds. There are so many inefficiencies in the Fed, I think we can call this one a clear success. Definition of success being that the program is not warming the planet further. Personally, I’d like to see vertical windmills on downtown buildings, but whatever.

  • zhaphod

    For me as long as we are not worsening the CO2 foot print, this program is a success as it is +vely affecting the economy. We should not look at this program from environmental viewpoint. There are other places where environmental perspective is a must.

  • Gretchen

    I can see the “efficiency paradox” as an issue with this program; cancelling some of the benefit of the program in the first place. I think the money could be better spent in filtering exhaust to lower soot in the atmosphere, wind turbines and electric cars, but that’s just what I think.

  • Mike

    Yes, it’s not perfect…..but it’s a start, it’s at least SOMETHING……what did the Bush administration and the republicans do for the last 8 years ? NOTHING.

  • http://www.squidoo.com/environmentalsciencefairprojects Environmental Science Fair Projects

    If you are trying to come up with topics for environmental science fair projects then you can try to figure out what environmental impact the cash for clunkers program actual had. YOu can measure the benefits in terms of tons of carbon dioxide released into the atmosphere.

  • http://www.ceolas.net peter dublin

    Yes this scheme makes no environmental sense!
    It’s a pity that dealers are forced to destroy perfectly good cars.

    There are deeper reasons why the scheme is wrong.
    Presumably it’s to save on oil/gasolene and to lower emissions:

    Yet fuel efficient cars effectively means cheaper energy which – as you refer to, and as shown by general English and Scottish research – in turn means they will be used more (instead of, for example, using public transport)

    Fuel efficiency is of course an advantage people can consider when buying a car – and can compare with advantages that inefficient cars can have (better acceleration, or greater safety because of greater weight, etc, as well as a probably lower price – or they would be efficient already).

    As far as government is concerned, any oil shortage – for geopolitical or economic demand reasons – raises the gasolene price and – guess what – increases demand for fuel-efficient cars anyway, no need to legislate for it.

    Another reason is that – as research at Georgia Tech has shown – it is possible to clean emissions of CO2 (and other substances at the same time).
    A fuel-neutral emission tax on cars therefore makes more sense:
    If it is economical to make – or to fit current- gas-guzzling cars with emission processing then, again, there is no reason for government to try to lower the use of such cars.

    Any regulatory measures should therefore focus on emissions, rather than the fuel used, and emission taxation on cars retains consumer choice, while also giving significant government income with the lower sales of high emission cars, income that can go to projects that themselves lower emissions eg. electric car manufacturing subsidies etc.
    (Regardless of whether CO2 reduction makes any sense, lowered emissions of course have their own benefit, for all the noxious sulphur etc substances that the emissions also contain)

    For more see ceolas.net/#cc25x
    Why all energy efficiency regulation is wrong – from light bulbs to buildings http://www.ceolas.net/#cc2x

  • Paul315

    How many people could have been put to work for $1 billion? Or how many cases of HIV could have been treated? Or, how many people could have had health insurance? In fact, how many families could have used a tax rebate?

    Removing 57 minutes of pollution was not the highest and best use for this money.

  • rjchamp

    I agree with Jason. 700K is 700K. Relative to lower cost gas, increase the gas tax. This would be a direct response to the petroleum dictatorships. Take the revenue and invest in green technology R&D. And, bring the kids home.

  • Chris Harries

    Yes, it is a very inefficient solution, partly because the imbedded energy required to make new cars is higher than the energy used by driving older, less efficient ones. And partly because the majority of smaller cars sold in the US are manufactured in South East Asia.

    Still, its at least a symbolic gesture that the government means business.

    The main thing with this issue is to prevent loopholes whereby the traded in clunkers are not secreted away and re-sold onto another market – as has been happening in Germany. Illegal of corse, but there needs to be absolute proof locked into the system so that the trade-ins are unquestionably being crushed and sent to the recyclers.

  • Chris Harries

    Yes, it is a very inefficient solution, partly because the imbedded energy required to make new cars is higher than the energy used by driving older, less efficient ones. And partly because the majority of smaller cars sold in the US are manufactured in South East Asia.

    Still, its at least a symbolic gesture that the government means business.

    The main thing with this issue is to prevent loopholes whereby the traded in clunkers are not secreted away and re-sold onto another market – as has been happening in Germany. Illegal of corse, but there needs to be absolute proof locked into the system so that the trade-ins are unquestionably being crushed and sent to the recyclers.

  • ron tell

    Its surely is nice to get a new car but. if the average car financed was $18,500.00 ( conservative) and the clunkers sells 500,000 cars that will add $9,000,000,000.00 of debt amaericans have to pay PLUS increased insurance premiums +-$75.000,000.00 . Hmmm how many will be repossed? maybe 15%. Is this going to be another Freddie MAC ??? YEP. How many illegals bought them. How many loosers bought them. The sad thing is that I would say 70% of the cars are still very drivable with years left on them. If a person had to pay $1,000.00 a year in maintenance they would be way ahead. Discounting the gas savings and environment issue this is a disaster wqiting to happen. Looks like the Dems are buying votes again

  • ron tell

    Paul315

    I can accept some of your theories. Yes I am concerned about children with HIV as well a people who got it in non sexual manners instead of clunkers . The addicts, hookers and people stupid enough to have unprotected sex are the problem. I do not believe that HIV is really a priority in governments areas unless it becomes a major epidemic. Its a shame but thats the way itis. If this insurance bill goes through death by AiDS will increase at an exponential rate. Democrats think “AiDS people are unproductive as well as the elderly so, LET THEM DIE” No more social security, less on the medical, unemployment and social assistance rolls. Sounds apololiptic to me. Dems are buying as many votes as possible, just wait next is immigration. Then raining in more of corporate america is next.

  • Rob

    Very disappointing analysis. Even the most basic environmental analysis must take into account the full life-cycle of the product: from raw materials extraction, to manufacturing, shipping, maintenance, and recycling/disposal.

    The environmental cost of manufacturing a new car is immense. There is a lot of information available about this; I’ve read one study which found that building a 4,000-lb. car consumes something on the order of 20,0000 lbs. or more of raw materials, and a huge amount of energy.

    I believe it would take many miles driven over many years for a marginal fuel efficiency improvement to equal the impact of making a brand-new car. I could be wrong, but that should have been the whole point of this article — to do that quantitative analysis. Shockingly, this dimension wasn’t even mentioned.

  • http://cashadvancesus.com/ Emily Morgan

    The environmental idea behind the bill is that it takes old, inefficient vehicles off of the road. But some environmentalists are actually opposed to the bill because it takes functioning cars off of the road before their time is up, and does not permit the vouchers to go towards used vehicles, even if they are more fuel-efficient. Sen. Dianne Feinstein, who sponsored an alternate bill stated that the current version undermines fuel efficiency standards and provides “handouts for Hummers.” On the other hand, some argue that higher fuel standards would disproportionately benefit foreign cars, denying American automakers their much-needed boost.

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