Mr. Meter on America’s “Cash for Clunkers”

(While Lee Schipper is recovering, here is another example of his always-on prescience in the poorly lit streets of this gasping planet.) If matters of climate, sustainable transportation and careful use of scarce resources are close to your heart, and you happen to be European, you may have some reserves about your country’s ecologically billed, and energetically buttressed “Cash for Clunkers” (in more polite Euro language of course) program. Let a couple of Americans energy policy experts help you feel a bit less embarrassed. You are not alone.

Before you dig in, a summary:
Schipper’s real concerns in this article published earlier this week in the Washingtom Post are these: First, the CO2 saved come principally because the cars bought under C4C are slightly more fuel economic than others bought. But the CO2 saved over the lifetime of the new car is extremely expensive, hundreds of dollars per tonne. If Americans are whining over cap-and-trade or a carbon tax in the tens of dollars per tonne, why embrace something so much more expensive for the taxpayer. And at the end of the day C4C doesn’t fix transport, it only fixes a tiny bit of CO2. Schipper is worried that Americans will now set back and breathe a sigh of relief, when the real work lies ahead.

And as to our European friends, the situation is no less (I choose my word) stupid. See the Associated Press piece below summarizing the state of play of C4C in eleven European cities. Stupidity is clearly viral.

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When It Comes to Being Green, Cash for Clunkers Is a Lemon

- Lee Schipper, Reblogged by World Streets, 12 August 2009

If you think the Cash for Clunkers program is confusing for dealers and buyers, you should try figuring out its impact on fuel use or carbon emissions. Despite the environmental accolades showered on the program, its environmental effects will be negligible.

How much will we save? Not much.


United States Energy Information Administration ‘s projections put CO2 emissions from gasoline powered vehicles at more than 16,000 million metric tons for 2010 — 2019. The Obama administration recently proposed tighter fuel economy standards that, when implemented, should reduce emissions by 220 million metric tons, about a 1.3% drop.

Initial data from the Department of Transportation indicate that vehicles purchased under cash for clunkers are 69% more fuel-efficient than the vehicles they have replaced. So, according to our calculations, at best, the program will save about 7 million metric tons of CO2, or 0.04% — less than two days worth — of total emissions during that decade. By 2015, most of the clunkers scrapped under the program would have been retired anyway, and the environmental impact of removing them will vanish.

But it does not end there because, unlike clunkers, new cars are fun to drive.


Supporters of the Cash for Clunkers points to the fuel savings that the program is supposed to achieve. Unfortunately, programs that merely substitute older vehicles for newer, higher miles per gallon vehicles do not account for a critical piece of the vehicle emissions puzzle. We are cars are driven more than older cars. On average people drive their new cars and trucks about 25% more than they do with their 10-year-old vehicles. A new vehicles are driven as much as 3 to 5 times farther than genuine clunkers. Thus, new vehicles may have significantly better MPG ratings in the vehicles they replace, but since they are driven more CO2 savings will be further offset by increased use.

And the cars we’re buying under the program do not have great mileage.


First the good news. The cars being turned in are bona fide clunkers. They get worse gas mileage than the average 13-year-old car.

But the bad news is that the average miles per gallon of the vehicles being fought under Cash for Clunkers barely beats the average of all vehicles currently sold in the United States. So the main impact of the program is to remove clunkers that were being driven much anyway, while drivers acquire vehicles that they will drive a lot and that are only slightly more fuel-efficient than the average new car. Is that worth $4500?

If the program returns such marginal savings, why do it? One reason is that it appears to be accelerating the sale of cars, although Edmunds, which tracks car-buying trends, reports that many Cash for clunkers buyers just delayed their purchases in anticipation of this bonanza. A better program would have pinned the rewards to a calculation of fuel savings based on the remaining life of the clunker in the miles per gallon of the clunker and the new car the math is simple, but Congress is run by lawyers!

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SOURCES: Energy Information Administration, WRITET, Oak Ridge Transportation Energy Data Book, National Household Transportation Survey, U.S. Dept. of Transportation | GRAPHIC: Lee Schipper, Joel Mehler, Brian Gould, Chris Ganson

SOURCE of original article: Washington Post, undated. http://www.washingtonpost.com/wp-dyn/content/graphic/2009/08/08/GR2009080802658.html

AUTHORS: Lee Schipper, Global Metropolitan Studies, University of California Berkeley, and the Precourt Energy Efficiency Center, Stanford University. Joel Mehler, Stanford University. Brian Gould, GMS. Chris Ganson, WORLD RESOURCES INSTITUTE

Dr. Schipper manages to be simultaneously Senior Scientist with the Global Metropolitan Studies of the University of California Berkeley, and of Precourt Energy Efficiency Center of Stanford University. He has long been a voice calling for more balanced approaches in the world energy policy sector. He has impeccable new mobility qualifications since he has long commuted to work daily by bicycle. Lee leads a jazz quintet which plays on demand and is still remembered for their first international hit recording of “The Phunky Physicist” in Sweden in 1973.

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And now, a glance at Europe’s ‘cash-for-clunkers’ programs

By The Associated Press (AP) – 8 Aug. 2009

The popular “cash-for-clunkers” program that has encouraged consumers in Europe and the U.S. to trade in their old cars for newer and more efficient models was born in December 2008 when French President Nicolas Sarkozy unveiled a Euro 26 billion ($37.36 billion) stimulus plan to help the country ward off a recession.

To date, 11 countries in Europe offer similar plans.

* Germany offers Euro 2,500 to buyers of new or almost new cars who own cars that are nine years or older.

* France offers Euro 1,000 to scrap an older car that’s at least 10 years old.

* Italy offers Euro 1,500 for a car and Euro 2,500 for a light commercial vehicle for buyers who agree to scrap a car that is at least 10 years old.

* Spain offers Euro 2,000 on a purchase price of up to Euro 30,000; old car must be at least 10 years old.

* Portugal offers Euro 1,250 for scrapping a car that is 8 to 12 years old, or Euro 1,500 for a car that is older than 12 years.

* The Netherlands pays between Euro 750 to Euro 1,750 to scrap a car that is 9, 13 or 19-years-old.

* Austria offers Euro 1,500; car must be at least 12 years old.

* Romania offers Euro 900 to scrap a car that is at least 10 years old but limited the program to just 60,000 units.

* Slovakia offers Euro 1,100 toward a purchase price of up to Euro 18,800.

* Serbia offers Euro 1,000 on any new locally built Fiat Punto if a buyer trades in a 9-year-old car.

Source: Various governments, IHS Global Insight. – http://www.google.com/hostednews/ap/article/ALeqM5jOxyXvhSiYz–vOseImAnJ5Nl4xwD99U99I81

Copyright © 2009 The Associated Press. All rights reserved.

Great ideas travel fast. The editor.

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About the author:
Lee Schipper is Project Scientist with Global Metropolitan Studies at the University of California at Berkeley, and Research Engineer at the Precourt Energy Efficiency Center, Stanford University. He has authored over 100 technical papers and a number of books on energy economics, environment and transportation around the world. Previously, he was Director of Research for EMBARQ, the World Resources Institute (WRI) Center for Sustainable Transport, which he helped found in April 2002. The views he expresses here are solely personal.

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One thought on “Mr. Meter on America’s “Cash for Clunkers”

  1. Of course, the biggest “missed opportunity” in all of these C4C programs was to devise a way to reward households that didn’t buy a car at all, but bought an annual bus pass or city bike!

    Reply

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