Analysis: 'Cash for Clunkers' program is expensive way to cut carbon emissions

New UC Davis estimates say the federal government's Cash for Clunkers program is paying at least 10 times the "sticker price" to reduce emissions of the greenhouse gas carbon dioxide.

While carbon credits are projected to sell in the U.S. for about $28 per ton (today's price in Europe was $20), even the best-case calculation of the cost of the clunkers rebate is $237 per ton, said UC Davis transportation economist Christopher Knittel.

"When burned, a gallon of gasoline creates roughly 20 pounds of carbon dioxide. I combined that known value with an average rebate of $4,200 and a range of assumptions about the fuel economy of the new vehicles purchased and how long the clunkers would have been on the road if not for the program," Knittel said. "I even assumed drivers didn't change their habits, although some analysts have suggested that the owners of new vehicles will drive more than they would have with their old cars.

"In the end, the lowest cost to remove one ton of carbon from the environment was $237. More likely scenarios produced a cost of more than $500 per ton, even when we accounted for reductions in pollutants other than greenhouse gases. That suggests the Cash for Clunkers program is an expensive way to reduce carbon."

Knittel did not analyze the program's other key objectives: stimulating the economy and providing relief for automobile manufacturers.

More information: The analysis, titled "The Implied Cost of Carbon Dioxide Under the Cash for Clunkers Program," was published online today (Aug. 13) by the University of California Energy Institute. It was funded by the Energy Institute and the Institute of Transportation Studies. http://www.ucei.berkeley.edu/

Source: University of California - Davis

   

• Velanarris - Aug 14, 2009
  • Rank: 5 / 5 (3)
  The CARS program was a welfare handout to the Vehicle corporations.
  
  Government released reports state that the majority of vehicles purchased under the cash for clunkers program were SUV's. Good show....
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• Mr_Frontier - Aug 14, 2009
  • Rank: 2 / 5 (1)
  You're right, the program is only about carbon reduction and not a semi-popular plan to put purchasing and economic power into the hands of consumers. Dollar per ton must logically be the environmental save all, all the time!
  
  Fueling the desire for appropriation into feasible and newer, more efficient technology will do more than blowing your load on a calculator because you found out cash for clunkers isn't perfectly tailored for the green binge you're on. Grow up Davis.
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• rwinners - Aug 16, 2009
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  The purpose of the program is to promote fuel economy and to provide a boost in business to the car manufacturers. Carbon reduction is way down the list. At any rate, coal is where that aim should be targeted.
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• CWFlink - Aug 17, 2009
  • Rank: 5 / 5 (1)
  I'd argue the waste is much greater. Were the "clunkers" even being driven on a regular basis? I doubt it. Tell me: how many people wealthy enough to buy a NEW car were heavily driving a real clunker before CARS?
  
  Those traded in were largely "spare" cars, seldom driven but kept as backups for use when the good car is at the repair shop, golf course or shopping mall. Removing them from use does not seriously impact polution, fuel prices or CO2 emissions.
  
  Remember, there are over 150 million cars and light trucks registered in the US. Destroying 750,000 was never going to have much impact, but if they were sparingly used, the impact is even less.
  
  Finally... realize the cars destroyed represent at least $750,000,000 of remaining value that that could have helped poor people and the disabled go to work at a job or be taken to doctors appointments, independently, with a measure of freedom.
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