Would cash-for-clunkers be good or bad for the environment?

Paying people to get rid of old cars is supposed to help the economy and the environment. Not everyone agrees it will do either.

By , Staff writer of The Christian Science Monitor

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    Junkers: Several US states already offer cash incentives to get older vehicles off the roads. The federal government may soon follow suit.
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In the tale of Aladdin, the young hero is tempted by an enticing pitch to swap his old, but magical, lamp for a new one.

The US government may soon be offering Americans another swap they may find hard to resist: cash toward a new car or truck if they’ll promise to send their old vehicle to be crushed into scrap metal. It’s being pitched as a win for both the economy and the environment.

In a March 30 speech, President Obama endorsed using part of the $787 billion economic stimulus package to fund what’s being called a “cash for clunkers” plan. Several such bills now are being considered by the US Congress.

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They follow clunker-retiring schemes already in place in several European countries, most notably in Germany, which, as a result, saw a dramatic 40 percent rise in new car sales in March over the previous year. (March sales by US automakers, in contrast, were down about 40 percent from a year ago.)

Several US states, including California and Texas, already offer cash incentives to get older vehicles off the roads.

While each bill in Congress is different, they all offer rebates of up to $5,000 toward a new car for retiring a qualifying clunker that is at least eight years old.

Whether such a program would boost the US auto industry remains under debate. Some reason that, like traditional automaker rebates, the clunker cash would only temporarily boost sales, and they would plummet again shortly after the program ended.

One bill, sponsored by Rep. Betty Sutton (D) of Ohio, originally restricted the program to US-made vehicles. But that provision may have to be removed because of free-trade agreements the US has signed, which in turn could dilute its beneficial effects for Detroit automakers.

But wouldn’t the plan at least take gas-guzzling, air-polluting clunkers off the road?

Maybe. Much would depend on the specific details in the final plan, knowledgeable observers say.
For one thing, the difference in gas mileage between the old and new vehicles would need to be significant.

Senate bill sponsored by Sen. Diane Feinstein (D) of California and others, for example, would require that the new vehicle’s m.p.g. rating be 25 percent better than the federal standard (the Corporate Average Fuel Economy, or CAFE) for its vehicle class.

Other variables are harder to figure. Do you only retire clunkers that are heavily driven? Could out-of-service clunkers be registered just to qualify for the cash? Would the program be limited only to vehicles that emit the most pollution?

Another consideration: the amount of CO2 emissions released in the manufacture of a new car – from making the steel, plastic, electronics, and other parts to the actual assembly of the vehicle.

Estimates of the “carbon cost” of a new vehicle range from 3.5 tons to 12.4 tons of CO2 expended per vehicle, says William Chameides, professor of the environment and dean of the Nicholas School of Earth & Ocean Sciences at Duke University. He’s averaged them as 6.7 tons per vehicle.

Depending on the fuel efficiency of the car or truck, and how many miles it will be driven, it could take from a few years to beyond the lifetime of the vehicle to make up the “carbon cost” and begin saving on emissions.

"There are a lot of carbon emissions embedded in the production of that new car,” Dr. Chameides says. “One needs to think about that.”

The biggest savings are in getting true gas-guzzlers off the road. Replacing them with vehicles that get better gas mileage can make a huge difference in the amount of fuel burned and emissions released.

"The difference in gasoline saved between a 35-m.p.g. car and a 30-m.p.g. car is much less than for, say, a 20-m.p.g. car and a 15-m.p.g. car,” he says.

Why that is so “is not intuitive at all,” he adds. Two of his colleagues, Duke management professors Rick Larrick and Jack Soll, call it “The M.P.G. Illusion.”

For example, compare two vehicles that are both being driven 10,000 miles a year. A vehicle getting 10 miles per gallon would burn 1,000 gallons. Replacing it with a vehicle getting 20 m.p.g. would mean you’d burn only 500 gallons, a savings of 500 gallons.

But the effect diminishes in comparisons between high m.p.g. vehicles. Driving 10,000 miles in a car getting 25 m.p.g. would require 400 gallons of fuel. Switching to a miserly 50 m.p.g. vehicle (such as a Toyota Prius) would cut fuel consumption to 200 gallons. That’s a savings of only 200 gallons, despite the large spread in m.p.g.

A cash-for-clunkers plan is “very hard to justify in terms of oil-use reduction or greenhouse-gas reduction,” says Daniel Sperling, a professor of engineering and environmental science at the University California, Davis, and the founding director of the school’s Institute of Transportation Studies.

But, he says, “it possibly could make sense for conventional air-pollution reduction.”

Older vehicles emit conventional air-pollutants, such as nitrogen oxide and sulfur dioxide, at rates as much as 100 times higher than newer vehicles, he says. That’s because they have less-sophisticated pollution controls and because emission levels tend to worsen as vehicles age.

A better strategy than cash-for-clunkers, says Professor Sperling, would be to raise the CAFE standards for automakers. “That’s by far the No. 1 strategy,” he says, for cutting fuel consumption and CO2 emissions.

To ensure demand for high-m.p.g. vehicles, the government should create incentives, such as rebates for gas-sippers or raising gas taxes, he says.

Britain is considering a cash-for-clunkers plan, too. But some critics have labeled these programs as “greenwashing.” Such schemes are “nothing but hand-outs for the car firms, resprayed green to fool the incautious buyer,” writes firebrand environmental activist George Monbiott in The Gauuardian, a British newspaper.

Others wonder if replacing older vehicles with other vehicles, even if more efficient, is the most environmentally friendly way forward. The Feinstein bill does, for example, allow the cash voucher to be used to buy transit fare instead of a car or truck.

That indicates that improving the vehicle fleet doesn’t address the whole transportation picture. “I was disappointed that in the stimulus bill more money was not put into mass transit and public transit as opposed to building roads,” Duke’s Chameides says.

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