I am in favor of reducing our dependence on fossil fuels. I believe that carbon emissions from human behavior are warming the planet and will cause drastic climate changes in years to come. I want our car-centric society to move towards a reliance on public transit and smart growth communities. I want people to reduce, reuse, and recycle in order to mitigate their footprint on the environment.
But I am absolutely opposed to the extension of the Cash for Clunkers program.
On Friday, the House added $2 billion to the program which has run out of money months before its November deadline—after many people doubted whether the original $1 billion would be spent entirely. The original law was tolerable, in that it provided some economic stimulus, allowed people to purchase more environmentally-friendly cars, and gave hope that the ailing auto industry would somehow benefit from a bump in demand.
It’s no longer cute anymore. All this law does is subsidize manufacturers and dealers—one of the most egregious forms of protectionism, in that all states have laws to mandate transactions through dealerships. In reality, we should be moving toward a “demand-pull” model in which consumers can order their cars directly from the plant, reducing excess inventory and eliminating the middlemen who can take advantage of non-savvy buyers.
Furthermore, with such a limited definition of what a “clunker” is and the modest fuel efficiency standards that a new vehicle must meet, it is doubtful whether this bill will be a boon to the environment. Given that it takes a good deal of carbon to manufacture a new car (about 6.7 tons, by one analysis) and that a new car need only receive at maximum 28 mpg—which is only slightly above the corporate average fuel economy—for the purchaser to receive the full $4,500 rebate, it will take about four years for the driver to “repay” the carbon cost of the new car. That isn’t a bad thing, but in four years we will hopefully be looking at hybrid and electric cars with even greater fuel efficiency at a more reasonable price. So in that sense, it might be more beneficial to hold onto one’s car a little longer.
Another way in which this act caters to the auto industry is that there is no provision for used cars. All traded-in clunkers must be scrapped. The $4,500 credit cannot be administered to charities or recyclers if car owners were to donate their clunker. And many people who are driving heavy-emissions vehicles may not be in the position to afford new ones, in which case a mere $4,500 would not help them to finance a new purchase.
To add insult to injury, the $2 billion extension is being diverted from the stimulus bill’s loan guarantee program for renewable energy projects. That is an awful misuse of resources given that many states estimate that blackouts will occur in the next few years if grid capacity is not increased. Plus, urban development and transit expansion will need clean energy sources to maximize effectiveness. And need I mention the national security imperative of having a network of transmission to our homes and businesses that does not require kowtowing to petro-dictators overseas?
We need to help our struggling auto industry to reinvent itself; we also need more fuel efficient cars. What we don’t need is a half-life support/half-token gesture to environmentalists when this money could be used more effectively for other purposes.