New UC Davis estimates say the federal government’s Cash for Clunkers program is paying at least 10 times the “sticker price” to reduce emissions of the greenhouse gas carbon dioxide.
While carbon credits are projected to sell in the U.S. for about $28 per ton (today’s price in Europe was $20), even the best-case calculation of the cost of the clunkers rebate is $237 per ton, said UC Davis transportation economist Christopher Knittel.
“When burned, a gallon of gasoline creates roughly 20 pounds of carbon dioxide. I combined that known value with an average rebate of $4,200 and a range of assumptions about the fuel economy of the new vehicles purchased and how long the clunkers would have been on the road if not for the program,” Knittel said. "I even assumed drivers didn’t change their habits, although some analysts have suggested that the owners of new vehicles will drive more than they would have with their old cars.
“In the end, the lowest cost to remove one ton of carbon from the environment was $237. More likely scenarios produced a cost of more than $500 per ton, even when we accounted for reductions in pollutants other than greenhouse gases. That suggests the Cash for Clunkers program is an expensive way to reduce carbon.”
I am shocked, SHOCKED I tell you…
Anyone that thought CFC was about cutting carbon emissions was ‘emitting’ some CO2 of their own…from what they were smoking…
Thanks, my friend. I’ll be away laughing hysterically for the next hour ir so…
And just wait until you see the long term effect it has on the auto industry…
an artificially created very short boom in sales followed by a “fall off a cliff” when sales stolen from the immediate future don’t happen.
Say goodby to $4 Billion of our tax dollars!
Oh, yeah, and then there’s the effect it’ll have on the deficit…
In some ways, history repeats itself. I was in high school when the “Eisenhower” recession hit in about 1957. One slogan of the times was “You AUTO buy now”. People were encouraged to purchase new cars to put the auto workers back to work.
A couple of auto brands fell by the wayside. The Edsel came out in this time period and didn’t make it. Chrysler phased out the DeSoto. The big three auto manufacturers put fins on the cars, did not assemble them well, and the buying public wasn’t having them. On the other hand, the Rambler and the Studebaker Lark helped AMC and Studebaker turn a profit.
Ultimately, cars wear out and have to be replaced. Perhaps the Cash for Clunkers will generate enough work that, as it ends, more people will replace their cars.
The C4C program is intended more to pump up new car sales than to reduce CO2 emissions. If the latter were the goal, the program would also apply to used cars that get good gas mileage.
People who drive $500 junkers do so because they can’t afford $5,000 for a decent older used car. I don’t see how giving them $4,500 will enable them to afford a $15,000 new car.
And the effect of the bad loans generated will find its way to interest rates…
It Should Be Obvious To Everybody Now. CFC Isn’t About Saving The Planet. Cap And Tax Isn’t About Global Warming. The Stimulus Plan Wasn’t About Stimulating The Economy. A Health Care Take-Over Isn’t About Better Health Care Or Saving Money . . .
It has taken a long time for some people to see what’s happening, but they’re finally waking up.
CSA