Cash for Clunkers: An Environmental Thought Experiment

It seems as if people are having trouble deciding if having the CARS program blowing through a billion dollars in a week is a good thing or a bad thing. We wanted to look at what has happened from an environmental standpoint.

Because the specifics of all of the cars traded and sold are obviously out of our reach at the moment (as well as the government’s, it seems), let’s just calculate the absolute minimal environmental difference the $1 billion made. Because consumers could take advantage of the CARS program as long as they traded in a car that got a combined fuel economy of less than 18 mpg for one that got an EPA rating of 4 mpg more than the trade-in, we’ll use only that example.

Yes, we understand trucks and SUVs are also part of the equation, but early reports show an overwhelming amount of the trade-ins were for cars. A slight majority even earned the top $4,500 credit, meaning they got a new car with a 10-mpg improvement over their trade-in. But we’re just sticking to these figures to hedge our bets and give a basic outlook.

Say you scrapped a 2000 Chevrolet Blazer with two-wheel drive, which gets a combined EPA rating of 18 mpg, for a 2009 Honda Element with two-wheel drive with an EPA rating of 22 mpg.

Comments

i've heard some unsubstantiated news that some of these clunkers might end up as usable vehicles in China, which would throw off your results.

More important, I'd bet most of the clunkers are not being driven 15,000 miles per year, again, throwing off your results. If they are being driven 15,000 miles per year, then most of these people probably cannot afford these new vehicles, but I guess debt is the American way.

Wow this is great! The the government pissed away 1 billion in taxpayer money to "save" 92.5 million. Of course that "savings" goes into the pocket of the guys who just got a 4 grand gift from the taxpayers. It goes into the pocket of the idiots who bought the gas hog in the first place.

Meanwhile the government gives the finger to anyone who bought Corollas, etc. and forces them to subsidize a shiny bright new car for "Mr. Giant SUV"/

dahcredyns,
the cars have to have their engines immobilized at the dealer which is irreversible. There's no way anyone's driving them ever again.

"The the government pissed away 1 billion in taxpayer money to "save" 92.5 million."

Huh? I guess, since people trading in these junkers will suddenly experience that new car smell, they are going to have to trade in on an annual basis. Is that the logic? Oh, and that the price of gas will never increase...don't forget that factor, too.

Maxwell -
As skip said, $92.5M PER YEAR. Does a car last 11 years? What do you think?
Also, remember this is an incredibly conservative estimate.

However, if you say the cars last 10 years, then your 593M pounds of CO2 becomes about 3M tons saved. At $1B, that's about $333/ton. Wind power displacing coal saves CO2 at about $30/ton and solar PV at about $120/ton (and dropping fast!). So if this is purely about CO2, we'd be better working on fixing our broken power sector. But, obviously, this is about more than just CO2.

Nothing is ever fair and equitable to the entire population. It's a lesson you should have learned a long time ago, like kindergarten when the kids with last names starting in "A" always got to be at the front of the line.

H,

That is family name thing. And has nothing to do with how intelligent an indivisual is.
This bill, is penalizing people who made intelligent choices.

It's not penalizing you. That would mean they actively took something away from you. Like they added a tax because you make more than $1.2 million a year. That you can call a penalty.

This is an incentive you are not included in. Like complaining about GM loyalty cash and you can't get it because you don't own a GM. Only this time the govt is GM...uh...anyway.

Please note I don't care politically about any of the above.

Life is not fair, some are rich, and some are poor. Yet, there are programs for almost everyone. If you’re rich, you’ve enjoyed tax breaks, if you’re struggling; we all know there are multiple programs you could fall into. The bottom line is, we are NOT a nation of the rich, the majority belongs in the poor to middle class. This bill fulfilled its intended purpose of increasing auto sales in a desperate economy, yet decreases foreign oil dependency in one fell scoop. For the first time in a long time, people are actually spending money on big ticket items and improving the ecology we live in. Yes, some are crying foul because it didn’t benefit them directly; however, that’s just the way our society works. Maybe one day, you too could benefit from something that others will view as unfair. For the record, I DID NOT utilize this program for my new vehicle, but I do not envy those that did either.

I was so full of joy at the thought of getting a new car, finally. My car is 22 years old and slowly dying. When I went to a dealer to look over the new cars, I found out that my car does not qualify due to the fact that it is rated to get 21 mpg! My car only get 18-19 mpg. I lost out on this deal because of 2-3 mpg ??? Not fair.

Yes it would be nice if EPA statistics would take into consideration lost efficent over life of a car. When the old Stratus I drove past the 200K mark, I sweared it was getting V6 gas milleage in a worn out four cyclinder.

I didn't even have a college education but was smart enough to know what all would develop out of this deal so why didn't any of our so called Gov't? If they had just done the program for a few days they would have been farther ahead to see what the outcome would be before making these promises. I find this very ignorant on our governments part. We that are on SSI can only have a $2,000 car and those on SSD can only have a $4,000 vehicle. These cars that they are trashing would have been a blessing for us since we don't even have the money to travel very far. Though you see people who come in as immigrants driving very expensive cars and we saw one today at DHS who was driving a $10,000 which we know is hers because we've seen her before. The Gov't already made big mistake with AIG and afterwards they not only had one big expensive party but two!! Also, other companies ,etc did the same. They should have had the money taken right back from this company.

Well, my tax dollars were spent on someone else not more in need than I am, that is what I would called penalized.

So, how hard would it be to take one of these cars with an "immobilized" engine, pull the block, bore it .030 over, do an econo rebuild, and get it back on the road here (or China?)

I've spoken to several dealers today and the program is working so well, the fear is now, of running out of cars. Some dealers will not have cars to sell you even if you need one. My suggestion is to get out there now,if you need a car from this program. Stay home if you are not participating in the program. This is not the time to be casually looking for a car. Stores have a shortage of help for all the traffic they are getting.

I was thrilled to be able to utilize the 'Cash for Clunkers' program. I have limited financial resources (like most Americans) & I thought I was going to have to keep sinking $$$ into my 91 Acura Legend. It was a great car in its day but I got it used with 111,000 miles on it. Naturally, it needed major work done as the miles added up & I found myself going to my auto repair shop dropping hundreds of dollars per visit up to 1200.00. So I was resigned to pouring money into this car until the 'Cash for Clunkers' program was announced.

I went to my local Kia dealer who was very helpful in working out a very good deal. I got 3500.00 for my Acura (Kelly Blue Book trade-in value was 1350.00) plus a 3000.00 Kia rebate. This dropped my final price down to the point where I could make monthly payments.

My Spectra has gotten 25.5 mpg city & 36 mpg hwy. It has the ULEV - Ultra Low Emissions 4-cyl engine that reduces my carbon footprint. It has multiple air bags for safety plus Kia loaded the Spectra with accessories so I don't feel slighted by switching from the Acura to the Kia. So this program has achieved its goal of getting my less fuel efficient, higher pollution producing car out of circulation while getting me into a very fuel efficient, low emissions car which also helps car sells & the associated industries & my local dealership.

So I fully support & encourage the government to fund this very worthwhile program that actually helps the working class folks who are suffering in this recession.

Dave T -
Saving 850,000 barrels of oil is not even a drop in a thimble! The United States uses more than 20 MILLION barrels of oil each day. Let's keep things in perspective - 850,000 barrels amounts to about 8 minutes of savings. That's it.
Has CARS had a positive impact on new car sales? Yes. Has CARS had a positive impact on the environment? No the impact is so insignificant it's virtually immeasurable.

I myself am on Disabled Social Security but I still need a auto to get to the doctor and back home again. I went to my local honda dealer and traded my ford explorer it got (16 mpg) in for honda accent (36 mpg). If IT HAD NOT BEEN FOR THE CASH FOR CLUNKERS I COULD NO HAVE AFFORDED TO HAVE TRADED. The explored needed about $3000.00 of work to be done to it I received $4500 for the explorer and $1500 from the dealer for a total of $6000.00 towards the car, which helped out alot. SO I FEEL TH PROGRAM HELPED ALOT OF PEOPLE AND SOME IT DIDN'T...BUT WE ALL CAN'T BE WINNERS ALL THE TIME!!!!!!!!!!!

This article does not factor in the environmental costs of manufacturing new cars nor of recycling older ones that are still useful. How about an article factoring that in? And what about the fact that new cars seldom get the advertised gas mileage so you may not be saving any gas?

So, I have a paid for Blazer working perfectly for a 9 year old banger which gets 18mpg and I am going to buy a Honda Element (with the infamous Toyonda mark ups) and start making payments... it smells like a Ninja mortgage, get a house you can't pay and big daddy government will foot the bill if you screw up.

And considering how much energy is consumed making a new model, specially a hybrid, not sure if environmentally is going to be a great idea.

Sandy,
this is all politics at its best. Like you, i have an older car that gets 30+ mpg, but i am quite certain that the pollutants that it emits per mile is more than my much newer SUV which gets around 20 mpg.
I think if the administration actually wanted to reduce pollution they would have said: trade in your sub 18mpg for a new diesel or hybrid. That makes more sense.

The numbers look great: spending $1bn to save about $1bn over 10 years, hopefully. This is without factoring inflation and interest on that $1bn we borrowed in the first place. But all those other confusing numbers are not important.

Hey, ThinkerDude:
I'm with you on that. Before this whole CARS program i considered trading my SUV for a sedan, bit i changed my mind because i did some good old mathematics and figured that even with gas at $5gl i would still be spending more money on the new car payments.
You are also correct about the cost and environmental impact of producing the electric and/or hybrid cars. Clarkson from Top Gear(BBC America) showed what's involved in building the Prius. This includes the mining of the materials to make the batteries and the immense amount of transportation (big, big carbon footprint) utilized in shipping materials, parts, etc.
I recently read an article, i think on Yahoo, which pointed out that several of the countries that have the lithium to make the batteries that are needed for hybrids are many of the countries that are run by the dictators we do not like. In that regard we would be moving from the middle east to some other crazy dictator. And mining is just as destructive to the earth, maybe worst, than oil drilling.
So, i really don't get it. This all seems like a slight of hands to me; just a grand illusion that we are achieving something great by driving electric and hybrids.

So what do we do when this false economic bubble crashes and these cars start getting repossessed?

Wait that cant happen can it? That would be like all the people who bought more house than they could afford 5 years ago not being able to pay their mortgage! Impossible!!

I wonder how many more billion this is going to cost to bail all these banks out this time....when will we learn.

Maybe the housing bubble is going to change into de car bubble...maybe next winter I can get a nice repo...

well, i retired my 94 blazer last week for an 09 chrysler sebring. i went with chrysler because they were matching the discount and i qualified for a few other discounts. out the door i paid $12k.

this weekend i took a trip to dallas. i had some around town miles on the car before heading out, but all told i had 343 miles on the trip computer when i filled up in dallas. it took 9.6 gallons to fill the tank back up. that's 36mpg!

on my way back i got stuck in an hour's worth of dallas, gridlock traffic before getting out of the city. i took a different route back so it was mostly country roads (70mph) with little towns sprinkled in between. even with the hour's worth of idling in dallas, i still saw 31 mpg when i filled up after getting home.

very good considering i rarely saw 22mpg in the blazer, and it also beat the window sticker estimates by quite a bit. now, on the way to dallas i didn't run the a/c the entire time because it was raining and slight cool out, but with the cruise control set at 70mph that's pretty impressive for an engine that has less than 500 miles on it. on the way back it was triple digits outside, so the a/c was going the whole way.

anyway, i know there are a lot of chrysler and sebring haters out there, so feel free to tell me what an idiot i am for not buying a prius. the sebring is quiet, has a smooth ride, a good stereo w/a year of free syrius radio, and an engine/transmission that return surprisingly good fuel economy for a car with so much room. i wish they would have put the cvt2 transmission in that mimics a 6-sp auto, but oh well, the 4-sp auto never seemed to have any trouble and returned very good fuel economy.

i also like the sebring/avenger twins because they're the only two midsize sedans that didn't grow to become huge full size sedans in their last redesign.

I'm proud of my old Grand Cherokee (close to 200k) that gets 13mpg. no way in the world will I be trading her in for a fuel econo box. oh btw, I'm a 19 year old college student. not a rich person at all.

I with you on that Nick. After it goes get another one or a Bronco.

Even though this program may not benefit me or most Americans with economy in mind, I take a pleasure knowing that a lot of underperforming gas hogs are been junked. As a car enthuisiat that admires high performance vehicles of all sorts and brands I never understood why someone would drive a something like an SUV, If they didn't really use it for its off road capabilites or towing. If I was going to drive a gas hog it would be a high performance car. At least I would have fun burning up my gas. With new technology like direct injection with turbo charging there are now high performance cars that deliver 20+ mpg.

Thinkerdude,
Remember, lending in the car world has drastically changed in the past year. Folks aren't getting easy credit even today.

Betty,

Why did you buy the guzzler to begin with anyway?

Also, I am not aware that Honda makes the Accent.
I hope you mean Hyundai not Honda. Or Accord not Accent.

You're missing lots of factors here:

People drive more fuel-efficient vehicles more. People driver newer cars more.
It takes lots of energy to manufacture/demolish.
Program will result in more total cars in existence for next few years.
Transit will be discouraged.

Net result: bad for environment

For explanations and 4 more reasons follow my link.

I hope so, Dave T. I still remember how Mitsu got into real trouble with their easy credit some years ago.

I drive a ten year old Ford Escort, it doesn't qualify because it gets a good gas mileage, but I am not going to start paying huge car payments just for keeping up with the Joneses.

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 some 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 4-mpg 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 to find out where the break-even point is.