Environment
The CARS program scraps cars by dumping sodium silicate into the crankcase and running the engine until it dies, ensuring the "clunker" is not resold. The idea is that the newer, higher mileage vehicle will have less environmental impact than the clunker.
The top car trade in for this program is the 1998 Ford Explorer, which get 15 MPG and generates about 12 tons of greenhouse gases each year. The Ford Escape Hybrid gets 32 MPG, consumes 11 barrels of oil each year and generates 5.7 tons of CO2 annually. Clearly, there's a net benefit in GHG emissions after only two years.
Proponents ignore four key facts, however:
- (1) The manufacture of the new vehicle by itself produces several tons of greenhouse gases, lengthening the GHG payback time. A '98 Ford is near the end of its life anyway and will probably be replaced within a couple of years, negating the environmental benefit of CARS.
(2) When it costs less to drive, people drive more and negate the GHG benefit almost completely. This facet of human behavior is inescapable.
(3) That '98 Ford is probably somebody's beater, the truck that's used on the weekends for trips to Home Depot. It's impact on the environment is probably already fairly minimal.
(3) 5.7 tons of GHG from the new car is still a lot of greenhouse gas emissions.
Economy
The CARS program has clearly benefited automakers and dealerships, some of which report double digit sales growth over July 2008. This is clearly good for them and their employees. Consider, however:
- (1) This program benefits only those who already own clunkers and can afford (or have the credit for) a new car.
(2) CARS represents a transfer of wealth from the American public to the auto industry.
(3) CARS represents a transfer of wealth from my children and grandchildren to middle aged motorists.
(4) CARS with its destruction of wealth is a perfect example of the "broken windows fallacy." If one broken window helps the local glass shop, why not break all the windows in town? If Cash for Clunkers is such a "win win" for everybody, why not replace the entire US automotive fleet with brand new cars?
(5) If Cash for Clunkers is such a great idea, why cap the rebate to $4500? Why not $10,000 from the government? How about $20,000? If these cash values are so absurd (and they are), then why is $4,500 okay?
Equity
The inequity of this program is stunning. Cash for Clunkers provides a substantial $4500 benefit to a small portion of the American public, while those most in need of transportation are left out.
- (1)Millions of American who don't own cars depend on public transportation to get to work just as transit systems are cutting service and hiking fares -- Cash for Clunkers does nothing for them while robbing them of their pay.
(2) The people buying new cars through Cash for Clunkers can mostly afford a new car anyway. The poor are left holding the bag.
(3) Because Cash for Clunkers has removed thousands of vehicles from the used car market, the price of used cars goes up for those working poor who are more likely to buy an older "clunker."
My U.S. Senators from California -- Boxer and Feinstein -- have already said they'll vote in favor of Cash for Clunkers, but I wrote to them anyway. Feel free to cut and paste whatever arguments above you think might help your case.
12 comments:
Holy bovines, this might be one of those things my senator votes against that I agree with (tho' I wouldn't count on him to vote against it, bein' as it feeds into the corporate megastructure).
How would you draft legislation that would encourage conservation (change consumer behavior) that wouldn't outrage your constituency?
I argue that you can't. American's have an embedded sense of entitlement. They're going to drive cars, unless *somehow* a more convenient and cheaper alternative is proposed at the *same time* as the cost to own and operate an automobile increases.
We almost saw that during the gas spike of Fall 08. Hybrids (still cars) were in high demand, SUV and low mileage vehicles were slumping, but the second gas prices returned to norm, hybrid sales declined, and trucks and SUVs picked up.
Seriously. How do you combat that? Cash for clunkers seems like the most viable (read: realistic) alternative.
/$.02
-matt
Matt: The pain involved in any real environmental change is why I don't present an alternative here -- I just ask the Senators to vote no on this program.
CARS has very little environmental benefit, and as I noted earlier the cheaper cost to operate a high MPG car will be cancelled out because the owners will just drive more. There's no reason to support it from an environmental standpoint.
From an economic standpoint, CARS is a disaster. Depression era stimulus programs may have worked because of under utilized resources. We don't have that luxury today -- CARS results in net wealth destruction, not creation.
Damn brilliant. The best summary of what I've thought myself and various commentary about the subject.
And yeah... I stopped being lazy and sent a 'Vote NO' request to my senators (Washington state), though like you, I'm not expecting it to change their votes. Its worth them hearing from me though.
The other thing to note is that this is a subtle (or not-so-subtle) process of 'wealth redistribution'. I'm just frightened that we'll be seeing more programs modelled in this format.
http://www.economist.com/blogs/democracyinamerica/2009/08/not_where_you_would_put_your_f.cfm
That Economist article makes some good points, but they're using numbers from the DOT that might be questionable.
I haven't seen a good analysis of the projected fuel savings (and the numbers probably aren't available yet), but that $700 savings/year number is optimistic.
And besides, only 250,000 people are eating from that gravy train. What about all the other poor schmucks paying into it the program?
thanks for the post, i've sent multiple emails to senators boxer and feinstein, each with a different heading category (i.e. economy, environment, transportation).
This is a well supported argument and it's not worth the energy to quibble over degrees of accuracy. One thing that I might offer for consideration, is the necessary momentum of change that is required in this country for any real progress. All efforts of momentum start slow. Let's be careful about not chopping the legs off programs that we don't think "go far enough".
Fritz, I never seen you so outspokin'! The claim that a higher mpg fleet and hybrids are our salvation and may kick start the CHANGE we need is tenuous at best. How fuelish...
Jack
"A '98 Ford is near the end of its life anyway"
Jeez, seriously? When I drive, I drive an '85 Holden Gemini and it runs great. A lot of these "clunkers" must have been pretty badly cared for.
How about instead of "cash for clunkers", the government gave a low-income rebate for standard car servicing just to keep the engines that are out there running smoothly?
Now, if there's money for trading in my 73 Varsity, bright orange, gas-pipe, 45-lb bike for money for a Madone, we might have something.
Just remember, Obama inherited all those clunkers from the previous administration.
...you sir, are on an informative roll here & to break it down to a simple pass/fail, the C4C program is a huge FAIL...
...i guess because i'd like to believe in the "good" of human nature, i always wonder if the person who conceives of this type of program is honestly working from a position of 'background' ignorance & actually believes their own malarkey enough to sell it to the administration or whether they have their own agenda to begin with...
...& maybe i'm naive but i'd like to think that although obviously misguided on certain programs, the new president has "our" (read: the little guys) best interest at heart...but this, as part of the "stimulus package" is simply throwing money in the wrong direction...
...the same old, same olds have no incentive to change 'cuz they benefit by essentially doing nothing...
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