From Brookings comes a policy proposal that steals my heart: the melodically-named Cash For Clunkers. Here’s the low-down:
The incoming administration needs to act quickly to stimulate our ailing economy, prevent the collapse of the auto industry and tackle climate change and oil dependence. One policy idea might simultaneously rev up the engine on all three challenges—cash for clunkers.
Offering cash vouchers to clunker owners in exchange for their old, polluting cars is an idea that should be getting more attention. Drivers could use the vouchers toward the purchase of newer, more fuel-efficient vehicles, with the old vehicles scrapped to get them off the road.
If that sounds like a peculiar idea to lionize, consider the potential benefits. Older cars tend to be dirtier and less efficient, so getting them off the road can reduce gasoline consumption and carbon emissions as well as improve local air quality. (Or you could imagine tweaking the program to focus only on older cars that are serious gas guzzlers.) If the vouchers were good only for relatively efficient new vehicles, we would essentially guarantee fleet improvements. Plus, clunkers also tend to be less safe, so there could be an important public health benefit as well.
The idea really isn’t too odd. In fact, in energy efficiency circles this sort of thing is actually rather pedestrian. (Sorry.) Leading utilities already operate old-appliance buy-back programs, for example, in order to reduce wasteful and expensive electricity consumption even while giving low-income consumers a helping hand.
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That’s not to say that buying new cars for people is a long-term solution to our energy, climate, and economic problems. Obviously, it’s not. Indeed, such a policy could only ever be a first step. But coupled with a range of other policies—comprehensive carbon pricing, new investments in car-light infrastructure, and large-scale green jobs programs — a cash for clunkers program might be just the tonic we need in the short term.
Brookings takes a line that I’ve long touted. Strategic energy and climate policy will target the easy stuff first, to buy us time to figure out how to do the harder stuff.
Getting the most fuel-inefficient vehicles off the road can also be a particularly effective way to reduce gasoline consumption in the short term. Consider that if two people drive the same number of miles, the one who switches from an SUV that gets 10 miles-per-gallon to one that gets 12 will actually save more gasoline than the person who switches from a sedan that gets 30 miles-per-gallon to a hybrid that gets 50.
What really matters is gallons-per-mile, not the more common measurement of miles-per-gallon. If both drive 300 miles, the SUV driver will use 25 gallons rather than 30, thus saving 5. But the sedan driver will use 6 gallons rather than 10, thus saving only 4. In the long run, we are going to need much more fuel-efficient cars. But targeting the worst offenders provides more benefit than many realize.
So I like the idea. But it strikes me that there is an important way to improve on the Brookings proposal. Instead of offering a voucher good for a new car, we could offer a higher-value voucher not to buy another car at all. If the new car voucher would be worth $2,000, we might instead provide $2,500 worth of bus passes or cab rides or car-sharing service or what have you. This isn’t too far-fetched. In fact, the city of Seattle already offers such a program: the gramatically-challenged One Less Car Challenge. So does British Columbia with its super-popular Scrap-It Program.
My modification leaves plenty of details to sort out, of course, but the basic idea might still work. Owners of older and less efficient cars (largely lower-income folks) would have a cash incentive to start saving money on transportation costs—a plan that would save the most wasteful carbon emissions to boot. Granted, the money from my program wouldn’t flow through to the automakers, as the Brookings proposal imagines, but the money would still get injected back into the economy, much as other stimulus proposals have suggested.
h/t to Todd Wildermuth
Update, 1/28/09: The Financial Timesreports that a similar program in Germany is going gangbusters.
There’s a program like this in British Columbia called Scrap It!http://www.scrapit.ca/they'll issue a credit for transit vounchers or a bicycle.Transit voucher credits are worth less than the value of a car.
Matt the Engineer
This sounds like a nice enough ideas, but it reminds me of a previous post here about carbon credits. Isn’t this paying those that chose to keep polluting and therefore penalizing those that have already junked their old cars in exchange for a Prius or the bus?Following this logic further, should we be paying coal plants to build new coal plants, tearing down their old ones? It seems like a better idea to just tax their old plants until tearing them down makes more sense.Maybe the best solution is to tax cars based on gas mileage, and to distribute those taxes to everyone equally (i.e. add to state/city general fund, lowering other taxes).
Eric de Place
Thanks, Darcy. I updated the post to include a link to the BC program. I need to do a better job of highlighting policy from north of the border.
which standard would be used for the mpg, highway or city driving?
Jesse AKA The Rev
I’m not sure how I feel about maintaining the number of vehicles on the road. Of course I’m in favor of more efficient ones in place of the least efficient vehicles, but I feel like cars are often part of the problem. I would like to see drastic changes in voucher worth at the non-car end. Sure, $2000 would give you several annual bus passes, but something like bus passes, a Zipcar pass, and a good amount towards a bike seems to be really what it takes to convince someone to not drive. In the future they could be phased down.Also, what about us who never drove in the first place? I’ve got nothin’ from the city of Seattle.
There is some merit to the notion of lowering total gasoline consumption, and lowering carbon producing output. I always get a little hung up on how much new resource and manufacturing-driven carbon output is involved in producing new vehicles, and the fact that hybrids with batteries can add carbon output in manufacture that take some time to recoup through operation the more efficient vehicle.I think getting total mileage driven down is a preferable approach. In addition to “one less car”, there should be some disincentives to living more than (say) 10 miles from your place of employment. There are more fundamental structural issues in our society than just the tool one uses to commute. Any program focused on older vehicles must honor the “better” older cars, and allow for some collectible vehicles which aren’t used for many miles per year. We do need pricing through taxes, tolls and downtown fees or prohibitions to change behaviors and lower total miles driven. Many aspects of a car-based culture are subsidized; those subsidies can be switched to promote transit, shorter commutes and other alternatives.
Creating new cars takes its own toll on the environment in terms of mining the resources to create one and all the energy required to form the raw materials into a new car. How is that cost to the environment factored into the equation of getting rid of old cars? If people don’t buy another car, it works, but it seems a newer car is only a partial solution. I drive old cars (minimally) based on this theory of “One LEss New Car” and pay to have them fixed which is mostly labor hours rather than mining and manufacturing new materials. Is my equation wrong?
Tax driving, and tax it well.Better fuel efficiency won’t greatly decrease traffic accidents, deaths, injuries and the $300 Billion needed to support the use of automobiles by tax payers. How many more of these weapons of ass destruction are we going to permit on our roads and streets.Only small electric should be permitted.Crush the rest of these nuisances and use the remains for building innovative public transit. The auto industry has spend over a billion annually to convince Americans that they need to drive and to buy their products.
Not all old cars were created unequal.The newest vehicle I own is nearly old enough to drink in a bar, and it also gets nearly the fuel economy of a Prius.The last time we had an energy crisis, fuel economy increased significantly. Then Reagan got in and pressured the Saudis to pump like mad, and fuel economy went down. Well-built cars from the late ’70’s and early ’80’s should not be scrapped! They should be maintained!We have an ’82 Vanagon, ’85 Jetta, ’91 Jetta, and ’91 Cummins Dodge, all running from home-brew biodiesel. Even the full-sized pickup gets better mileage than many newer vehicles, and the Jettas get over 40 mpg!More importantly, the embedded energy of a new car represents current energy, taken out of the ground. A new Prius takes a lot of energy to build! A mid-80’s diesel took relatively little energy to build, and it’s all been amortized over 20 years already.Unlike the political energy crisis of that time, we are staring down the muzzle of an energy crisis based on supply, and nothing should be done do discourage older, efficient vehicles, especially if they are already paid for, both in terms of dollars, and in terms of the energy used to create them.
I agree with Brookings Institute re proposals to incentivize more efficient vehicle purchases. In our zeal to economize, however, let’s not assume that people make their personal vehicle decisions strictly for economic or emotional reasons.I own an SUV. It’s not a V-8 gas guzzler or a four-cylinder mini-SUV either. It’s something in between that I chose to purchase for one reason, it’s UTILITY to me. I bought this vehicle because it meets my needs.People tend to forget that contractors drive pickups, sometimes with big horsepower, as much out of need as want. I live in a harsh winter climate here in Eastern Washington. When I purchased my car, I had two elderly parents for whom I was the primary transportation option. I bought a vehicle that they could get in and out of easily because of it’s ground clearance, clearance that also allows me to get to them through record snows that would have grounded a compact sedan. Another consideration was storage space. My SUV has just enough cargo space for two wheelchairs while still being able to transport three passengers. (I often needed help moving two handicapped elderly folks around). As an added benefit MY mid-sized SUV also gets me in the summer to my favorite camping and fishing spots up long unimproved logging roads. Back injuries have made it impossible for me to do the lengthy backpacking hikes that I would prefer.Sometimes our vehicle choices are not made out of vanity or economic hardship, but for multiple, practical reasons that have more to do with needs than wants. These incentives don’t eliminate those practical needs. (A contractor is still going to need a pickup with the size and power to haul his tools and materials).That said, If I had the opportunity to trade in my 19mpg SUV for a 30mpg hybrid like the Ford Escape. I’d do it in a heartbeat. I just can’t afford the payments on a new car loan. My point is, let’s just not assume that providing cash will encourage drivers with specific needs to jump into a microcar just to reduce our fuel bills or to even to save the planet.
I am in agreement that the incremental impact of reduced gas consumption and air pollution would be a long time coming, compared to the environmental and energy cost of extraction, manufacturing, and distribution inherent in a new vehicle (and disposal of the old). Probably greater than 5 years, depending on the scenario. We are better off implementing improved mass transit and other energy/environmental strategies, such as land use planning for realistic long-term energy availability. Spending money to maintain our short-term status quo is throwing good money after bad.
Rob Harrison AIA
@Eric: In 1992 I heard Amory Lovins talk about just such a program RMI had proposed for California. IIRC they found the environmental benefits were higher and dollar costs were lower than introducing ethanol into gasoline. @Jan: I suspect the embodied energy of automobiles is a lower percentage of overall energy use than you imagine. Someone here ought to have the figures. I know that for most (typical) buildings, over the course of the building’s life operating energy (~97%) far outstrips embodied energy (~3%). As a building gets more energy-efficient embodied energy becomes proportionally higher. (And…nice to see you here!)@Jim: Nice to see you here too! I agree with the essence of your post. Any program like this would have to account for not just mileage but emissions, and ideally, miles driven annually.
the issue of embodied energy reflecting the manufacture, transport, and sale of a new car is somewhat of a linchpin in this debate. without good data and analysis of that factor, seems like the jump to a new vehicle (no matter how efficient) is questionable when compared with keeping a reasonably well maintained older car running for as long as possible. cars (generally) have much shorter life spans than buildings, so not sure the building data is relevant.
Re: EMBODIED ENERGYJoe Romm at Climate Progress has a good post on embodied energy. He quotes IEA data saying: “As a rough estimate, then, you can figure the dollar value of energy embedded in most products as 5% to 10% of their cost—and that includes all the energy consumed in the product life-cycle, such as manufacturing and shipping.”So $500-$1,000 embodied energy per $10,000 in new car price. For a $20k car that is about 500-1000 gallons worth of gas…or ~5-10 tons CO2. If a $20k car got 25mpg average over 250,000 mile lifetime, it would use 10,000 gallons. So embodied energy would be 5-10% of propulsion energy in this scenario.So clearly energy trade-off will be based on how inexpensive the new car is and how much better mileage it gets than your ‘clunker’.The BC ScrapIt.ca program pays you based on how many fewer tons of CO2 you will emit per year by dumping your clunker. You don’t have to buy a new car to qualify.Re: CONTRACTOR PICKUPSI gotta disagree with a point that Jim makes above, and that I’ve heard many times: that a contractor needs a big powerful pickup truck. I was in Europe a few years ago and I never once saw a full-size pickup. Somehow those advanced cultures, full of homes and buildings, manage to live without lots of big pickups. In fact everywhere we looked the trucks were tiny, often even three wheeled “Apis”. Even large police squads rolled around in teensy mini-vans instead of big SUVs like you would see here.