Before the U.S. Senate votes to extend the "cash for clunkers" program, let's examine this question, which seems like a reasonable one to ask: What has it done to reduce carbon emissions?
That argument has a visceral appeal: Let's take the cash for our old cars and trucks, get new ones with Bluetooth and iPod connections, and help out the environment in the process.
But a closer look at the existing $1 billion cash-for-clunkers program shows that the rhetoric of Washington politicians doesn't match reality.
Some simple calculations suggest that the existing program will save only about 365,000 metric tons of CO2 a year. Compare that to 29,028,000,000 tons of CO2 emitted worldwide every year, according to U.S. government estimates.
To put 365,000 metric tons in perspective, China's CO2 emissions have been increasing by an average of 644,000,000 metric tons each of the last four years, according to the U.S. Department of Energy. As of 2006, China was producing 6,017,690,000 tons of CO2, and the United States was producing 5,902,750,000 tons.
Second, swapping newer cars for older ones may cause more driving; fuel-efficient cars are cheaper per mile, and a new car is more fun than a clunker.... as fuel efficiency has increased since the early 1980s, cars get driven more. Plus, there's the environmental cost of building the new vehicles in the first place.
Sadly, the cash-for-clunkers program requires that vehicles traded in have their engines destroyed. This will raise the costs of used vehicles for poorer Americans. It will also raise the cost of used U.S. vehicles around the world...
From Washington Independent
A failure to reinstall the “borrowed” $2 billion would spell bad news for the renewable fuels and technologies industries, which are banking on the loan program to jump-start the innovations that might wean the country from its current reliance on foreign oil.
“For the U.S. long-term auto and fuel needs, it seems counterproductive to limit the renewable fuels industry,” Bob Dinneen, president and CEO of the Renewable Fuels Association, said in a statement last week.
Supporters of the loan guarantee program also argue that, even if it lacks the catchy name and political appeal of cash for clunkers, it provides much more bang for the buck. Indeed, each $1 provided under the loan guarantee program is estimated to spur $10 in additional investment and spending.
“$2 billion in the cash for clunkers program results in $2 billion worth of economic activity,” Sam Jaffe, senior research analyst at IDC Energy Insights, a consulting firm, wrote for Greentech Media on Tuesday. “$2 billion in loan guarantees will result in at least $20 billion worth of economic activity, all of which will have to take place on U.S. soil.”
“It is not appropriate for us to take money to do one thing for fuel efficiency,” Pelosi said, “out of an account that is designed to do just that.”
CBS News -"Perhaps the need to bail out a struggling U.S. automobile industry is enough to justify renewing the program, even though four out of the five top sellers are Japanese. But it's a bit silly for politicians to claim that cash-for-clunkers can be justified by environmental or economic concerns, and even sillier for Americans to pretend to believe them."