Tuesday, August 11, 2009

Cash For Clunkers Environmental Victory?

NY Times reports today:
"'What we ended up with,' said one senior Obama administration official, who would not speak on the record because he was being critical of his own administration’s environmental bona fides, 'is a program in which you trade in old clunkers for new clunkers.' Less discussed is the second critique of the program: It rewards drivers who chose to buy gas guzzlers a few years back, but not those who spent more to buy fuel-sippers (although in recent years those who purchased efficient new hybrids got generous tax credits)."
We should not be fooled, Cash For Clunkers was a program to help the auto industry clear inventory. There will be a environmental benefit but it could have been greater. It has been reported that the under the program trade ins have had 50% benefit in term of MPG. Cash for Clunkers has proved that with an incentive people will buy a more fuel efficient cars. That is great, but why not make threshold hold greater than only five MPG. Why not require consumers to purchase cars with at least a ten MPG improvement? Why not encourage people to purchase used fuel efficient hybrid?

Previous Cash for Clunkers posts here. Sphere: Related Content

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