Cash for Clunkers: Light Green, Not Deep Green

Congress recently refilled Cash for Clunkers’ tank with an additional $2 billion through Labor Day. This popular program has the laudable goal of stimulating the economy. But will it save energy and slow global warming?

Under Cash for Clunkers, your trade-in vehicle has to get 18 miles per gallon or less. That’s good. It means the program is focused on replacing the least fuel-efficient cars. But, as crafted by Congress, your replacement vehicle can still be a gas-guzzler. Qualified replacement cars need achieve a mere 22 mpg; SUVs, small pickups, and minivans a mere 18 mpg; and large vans or trucks a mere 15 mpg.

For maximum environmental benefits, Cash for Clunkers should reward the purchase of truly fuel-efficient vehicles. At an absolute minimum, any new car purchased through the program should get at least 27.5 mpg -- that’s the current corporate average fuel economy (CAFE) standard for new passenger cars. And any new light truck, SUV or minivan should likewise meet the current CAFE standard of 20.7 mpg. If the bar were set where it truly needs to be, the program would reward the purchase of cars that exceed fuel-efficiency standards by at least 25% (about 34 mpg for cars and about 26 mpg for light trucks). By not setting the bar high, Congress squandered the opportunity to get the most out of the $3 billion America is spending.

Despite the fact that Congress set the bar for fuel-efficiency improvements way too low, it’s a pleasant surprise that drivers are choosing more fuel-efficient cars than the program requires. According to a recent analysis, the average mileage of new vehicles purchased through Cash for Clunkers is 9.6 mpg higher than for the vehicles traded in for scrap, and more than 80% of the traded-in vehicles are pickups or SUVs. This is great to see even though not all of the top sellers average better than 27.5 mpg.

From an economic standpoint, Cash for Clunkers may turn out to be a success. From an environment and energy perspective, it's not the most cost-effective way to reduce global warming pollution or curb our appetite for foreign oil. Henry Jacoby of MIT says paying up to $4,500 per clunker means we’re spending more than $160 for every ton of CO2 removed over 10 years. That’s a very expensive way to reduce global warming pollution. Consider the fact that as a conscious consumer you can offset a ton of carbon for $10, or even less.

If environmental stewardship were a major goal of Cash for Clunkers, someone trading in a gas-guzzler could get a voucher to not buy another car. Imagine a voucher for $4,000 worth of bus passes (that’s more than 4 years worth of bus service on TriMet), ZipCar membership, taxi rides, or bicycles for the whole family (that’s zero-carbon transportation!).

When all is said and done, the Oregon Environmental Council looks forward to a robust analysis of the environmental benefits of Cash for Clunkers. The analysis should take into account the full lifecycle of the vehicle because manufacturing and disposing of cars takes a lot of energy. A variety of studies indicate that 10-15% of the energy a car uses in its lifetime is at the front and back end, not while driving. Recycling the car and its parts helps offset some of the energy used, but an accurate analysis needs to include non-drive-time energy consumption.

Are you considering purchasing more fuel-efficient, less-polluting vehicle? Check out Sierra Club’s calculator, which helps you estimate savings from driving a more fuel-efficient vehicle.

See OEC’s deputy director, Chris Hagerbaumer, discuss Cash for Clunkers on KGW’s Straight Talk.

Also check out OEC's Drive Green, Save Green tips.