Clunk It!
The debate over the environmental and economic benefits of Cash for Clunkers rages on. Christopher Kniittel, an economics professor at UC Davis, estimates that the C4C program does reduce carbon emissions, but at a hefty price tag of $237 per ton in the best possible scenario. Under more reasonable assumptions, the number pushes $500.
In his research paper on the subject, Knittel writes:
Imagine a CfC program with a $4500 rebate. Suppose the driving habits of both the clunkers and new cars are same, say an annual vehicle miles traveled of 12,000 miles. If the clunker’s fuel economy is 16 mpg, while the new car’s fuel economy is 25 mpg, then the scrappage program saves 270 gallons for every year the clunker would have been on the road. When burned, a gallon of gasoline creates roughly 20 pounds of carbon dioxide. Therefore, the program saves 2.7 tons of carbon dioxide each year the clunker would have survived. If the clunker would have survived another four years, the program has saved 10.8 tons of carbon dioxide for $4,500, or an average cost of over $400 per ton.
If you check the abatement curve in last week’s post, you’ll see that none of the strategies McKinsey proposed go over $90 per ton, making C4C off the charts!
Need a second opinion?
‘”As a carbon dioxide policy, this is a terribly wasteful thing to do,” said Henry Jacoby, a professor of management and co-director of the Joint Program on the Science and Policy of Global Change at MIT. “The amount of carbon you are saving per federal expenditure is very, very small.”….
….Michael Gerrard, director of the Center for Climate Change Law at Columbia University, who examined the clunkers program in an academic journal, said there are far better ways to cut energy use and greenhouse gases.
“It’s not that it’s a bad idea; just don’t sell it as a cost-effective energy savings method,” he said. “From an economic standpoint it seems to be a roaring success. From an environment and energy perspective, it’s not where you would put your first dollar.”‘
According to the Associated Press, the C4C program will offset the amount of carbon the US releases every 57 minutes. So, 1 hour down, 8759 to go! Let’s just hope we attack the remaining emissions in a more sensible way. CLUNK IT!
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