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Too Much Cash For Clunkers?

By Lisa Stiffler

The car buy-back program was a costly way to cut carbon.

The stats from the Cash-for-Clunkers program sound so promising: more than 625,000 gas guzzlers taken off the road in exchange for more fuel-efficient models. About 84 percent of the trade-ins were trucks, while 59 percent of the new purchases were cars, according to Consumer Reports.

The top three vehicles scrapped:

  1. Ford Explorer 4WD
  2. Ford F150 Pickup 2WD
  3. Jeep Grand Cherokee 4WD

In exchange for:

  1. Toyota Corolla
  2. Honda Civic
  3. Ford Focus

This had to be a big win for the environment, no? Well...not really, especially if you were hoping for a cost-effective win. University of California Davis transportation economist Christopher Knittel ran the numbers:

  • Miles per gallon for the vehicles being scrapped: 16.3 (Consumer Reports put the latest numbers at 15.8, but it's still close)
  • MPG for the new cars: 24.8
  • Assumed miles driven per year for each: 12,000
  • Gallons of gas saved per year: 270
  • Tons of carbon dioxide saved per year: 2.7

Assuming that the clunker would have been on the road for five more years, and given that the average rebate was $4,200, plus giving some value to the non-CO2 pollutants that are removed by the more efficient new cars, the price per ton of CO2 not released to the environment: $237.

By comparison, the price of CO2 on the European trading market is about $22 a ton right now.

And that's Knittel's best case scenario (see more on how he calculated these figures in this paper, published by the University of California Energy Institute). In reality, many of the clunkers likely weren't being driven that much before they were scrapped, the new cars could be driven even farther given their better mileage and delightful newness, and the life of the trade-ins is more likely three or four years, not five. The actual price per ton could be closer to $500. That could buy a lot of saved trees or weather-proofed windows. 

Which isn't to say that swapping 16 mpg vehicles for 25 mpg ones isn't a good thing. As one of my colleagues pointed out in an early blog post, you do get some real bang for those bucks. And of course the prime purpose of the $3 billion Cash for Clunkers was to sell cars, and it sure did that.

This piece originally appeared in Sightline Institute's blog, The Daily Score.

Photo credit: Flickr/dno1967, Creative Commons License.

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One thing I liked about the Cash for Clunker program was that it included the average person as part of the solution. The car owners will realize the long-term savings stretching their budget and allowing them more spend able income. Those that are on fixed incomes or limited incomes should appreciate the relief.
I relate this practice to roof top power generation in relation to Corporate or Municipal Green Power generation. Centralized production may be more cost efficient but the satisfaction and reward of personal involvement will develop into long term Green lifestyles.
The article mentioned the lifespan of the cars. I ran an auto salvage yard for 20 years and have crushed and disposed of thousands of cars. My conclusion and reflection on this 20-year experience is “What a waste of materials and energy”. Wherever possible we have to get past planned obsolescence. Vehicles like the Post Office LLV Postal trucks or the Step Vans used by parcel delivery services are all designed to last over 20 years. These could be improved by modularizing the drive train to readily accept new or improved drive systems with minimal changes to the chassis. These LLV type vehicles need to be available to consumers in practical usable designs.

Posted by: Mark knudsen on 27 Aug 09

The point of the exercise wasn't to do something for the enviroment.
After seeing how Germany had success with increasing car sales with a similar program the US simply wanted to help it's car industry.

Posted by: ChristianK on 27 Aug 09

But ... what about the environmental cost (including carbon emissions) of producing the new cars which might have been avoided if some of the old cars were refurbished instead?? One step ahead for the economy and one step back for the environment?

Posted by: A Mancey on 27 Aug 09

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