Was Cash for Clunkers a success?

PE - Cash For Clunkers - crushed cars 3474349149_c50c2c6c57_b
Photo courtesy of natashalcd at Flickr.com

The jury is still out on the Cash for Clunkers program. The last paperwork was filed on Monday, August 24, 2009, but crushed cars still waiting to be recycled. The final numbers are in – so how did the program score?

All told, C4C took 690,114 clunkers off of the road:

84 percent of consumers traded in trucks and 59 percent purchased passenger cars. The average fuel economy of the vehicles traded in was 15.8 miles per gallon and the average fuel economy of vehicles purchased is 24.9 mpg. – a 58 percent improvement.

That sounds wonderful, but a lot of people are wondering how effective C4C really was. Some argue that the program was a handout to car makers, that it was economically ineffective, that it increased consumer debt, or that it will create a price bubble for used cars.

There’s some truth in each of these claims, and policy makers are hopefully taking notes. Cash for Clunkers generated a lot of strong emotions. Even among environmentalists, there was spirited debate over the program. For example, ethanol lobbyists and wind turbine manufacturers opposed the program because it threatened their funding.

PE - Cash for clunkers - prius windmills 31766035_0ab3707b21_o
Photo courtesy of cluestream at Flickr.com

The Federal Cash For Clunkers program is also being blamed for distorting the value of carbon credits. Depending on the vehicles involved in the trade, the government set a carbon price of between $237 and $500 per ton. That compares with an average price of $5 to $40 per ton for carbon credits available on the open market.

Critics have argued that the low fuel efficiency requirements for replacement cars will have minimal impacts over the long term. Under the program, some trucks were replaced with other trucks that “only” received a 2 mpg improvement (18 mpg –> 20 mpg). That is more than a 10% improvement – and improving the mileage of a work truck has a much larger impact than improving the mileage of an economy car.

PE - Cash For Clunkers - crushed cars on a flatbed
Photo courtesy of shimonkey at Flickr.com

One of the strongest arguments about C4C is that the environmental impact of making new cars may be greater than the benefits provided by improved fuel efficiency. Mining ore, molding rubber, welding parts, and moving the finished product to showrooms are all processes that produce carbon emissions:

The amount of carbon dioxide (CO2) emitted to produce a new car has been estimated to range from about 3.5 to 12.5 tons, or an average of about 6.7 tons. So buying a new car means an extra 6.7 tons of CO2 emissions — you wouldn’t have emitted all that pollution had you just kept your old car.

Yet, the bulk of CO2 that a car releases comes from day to day operation:

According to a literature review by the Pacific Institute, somewhere between 10 and 20 percent of the life-cycle carbon emissions of the average car come not from driving but from manufacturing and disposal.

The other 80-90% comes from driving. It doesn’t take a large increase in efficiency to make up for the carbon released in making a new vehicle.

So, is it worthwhile to replace the less fuel efficient cars with fuel sipping models? Does it produce more pollution to build the vehicles than it takes to operate older, less efficient engines? Setting up a formula is pretty simple – let’s say the 690,114 cars produced for C4C released average amounts of carbon dioxide. 690,114 x 6.7 tons = 4,623,763.8 tons of CO2. That’s how much Cash For Clunkers caused to be released.

On the other side of the equation is how much CO2 saved by getting gas guzzlers off of the road. The average American drives more than 13,000 miles per year. The vehicles that were replaced would have burned approximately 596,511,828 gallons of gasoline per year ((13,657 miles x 690,114 cars) / 15.8 mpg). The replacement cars would only burn 378,509,513 gallons ((13,657 miles x 690,114 cars) / 24.9 mpg). That’s 218,002,315 gallons saved per year.

Each gallon of gasoline that’s burned produces about 19.4 lbs of CO2. 19.4 lbs of CO2 is ~0.008799692 metric tons.

So, after all that math, C4C is currently reducing our CO2 emissions by approximately 1,918,353 tons per year. In less than 2 and a half years, the program will “pay” for itself in terms of CO2. The average passenger car is driven for 7 years or more, so over their lifetime, Cash For Clunkers vehicles will save approximately 13,428,471 tons of Carbon Dioxide.

With numbers this large, sometimes it helps to put them in perspective. A large elephant weighs approximately 6 tons, so 13,428,471 tons of carbon weighs more than 2 million elephants!

PE - Cash for clunkers - elephants under the bigtop
Photo courtesy of ECU Digital Collections at Flickr.com

CO2 isn’t the only pollutant that the program has reduced. It isn’t even the type of emission that new cars have the greatest impact on:

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.

Most of the greenhouse gas released in the US comes from other sources. We cause more pollution with coal power plants, oil refining, chemical extraction, and other industrial processes. So, the Cash For Clunkers reductions are really just a drop in the bucket:

…on average, every hour, America emits 728,000 tons of carbon dioxide. The total savings per year from cash for clunkers translates to about 57 minutes of America’s output of the chief greenhouse gas.

Cash for Clunkers isn’t going to solve our emissions problem. But it’s a start.

As a side note – $2B of funds were added to extend the Cash For Clunkers program. Unfortunately, those funds were taken from the $6B set aside for other green technology. This means that there will be less investment in wind turbines, energy efficiency upgrades, power storing devices, smart grids, and other uses that may have delivered more of an environmentally friendly bang-for-the-buck.

There are also plans to mirror the program with rebates for energy efficient appliances.

Photo courtesy of Uncle Bumpy at Flickr.com

What do you think about Cash For Clunkers? Would the money have been better spent on public transportation, alternative energy generation, research, or other uses? Please share your thoughts in the comments section below.

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