Cash-for-Clunkers Program a Missed Opportunity to Reduce Greenhouse Gases

Michael Gerrard, Director of Columbia Law School?s Center for Climate Change Law, Says Benefits to Environment Should Have Received More Consideration

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New York, July 31, 2009 – The cash-for-clunkers program may have given a needed boost to car sales, but it wasted a chance to also reduce greenhouse gases and fuel consumption, according to the director of the Center for Climate Change Law at Columbia Law School.
Professor Michael Gerrard said what is good for the economy could also have benefited the environment. But he noted the law fell well short of that goal.
“It was sold as good for the auto industry, good for the environment and good for energy security,” Gerrard said. “It was sold as a three-fer. It’s more of a one-fer.”
Part of the problem is politics, Gerrard said, which he said helped lead to the narrow difference in the fuel-economy standards between eligible new and traded-in vehicles.
To be eligible, passenger cars must have combined city and highway fuel economy ratings of no more than 18 miles per gallon, while new cars must average at least 22 miles per gallon.
“If they made the eligibility requirements tighter, there would have been fewer sales,” said Gerrard, especially for Detroit automakers.
In turn, Gerrard noted that will result in small reductions in energy consumption and greenhouse gases if at all, especially when the energy costs of building the new cars are factored in.
Any energy savings, Gerrard said, could take several years to realize after taking into account what he calls “carbon dioxide payback time,” the time it takes the fuel savings from a new car to exceed the energy cost used to make a new vehicle.
“The program appears to have been a spectacular success in increasing auto sales, which is a remarkable and worthwhile achievement,” Gerrard said, “but as approved by Congress it’s not a cost-effective way to reduce fuel use or greenhouse gas emissions.”
The House on Friday approved an additional $2 billion for the program. The government said this week the initial $1 billion appropriated for the clunkers was in danger of running out after the program proved to be wildly popular with consumers.
Gerrard said additional funding is “not a done deal” because of opposition in the Senate that emerged with the original legislation. But he conceded the political will may be lacking to kill a measure that Sen. Debbie Stabenow, D-Mich., said has already been responsible for 200,000 car sales.
“The program has a large head of steam, and anything that demonstrably helps the economy may find few opponents,” Gerrard said.
Note to Media: Gerrard is available for interviews on this topic and other issues surrounding climate change. To arrange an interview, call 212-854-2650 or 646-284-8549 after hours.
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