Is “Cash for Clunkers” Green? #
Ever since the program started to run out of money — that seems to be the time most people found out it existed — the constant argument I’ve heard against the vehicle trade-in program is that junking those cars is clearly wasteful (even if it is stimulative). While that’s undeniable, the Green Lantern still thinks it may be good:
According to an early analysis from the Web site Cash for Clunkers Information—which estimated an average fuel-economy increase of 69 percent and total sales of 250,000 cars—the program would cut overall fuel consumption by about 76 million gallons a year and carbon dioxide emissions by about 737,200 tons annually. Using Chameides’ figures, it would produce about 1.7 million tons of CO2 to manufacture those 250,000 cars, so we won’t really see those savings until a little more than two years from now.
Also worth considering, a thought from Steven Levitt’s about the economics of the program (from back when it was just a proposal):
Still, my guess is that unless the price the government pays for the clunkers is very high, the majority of vehicles that are turned in will not have been driven much, if at all.