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High Carbon Cost For ‘Clunkers’ Program

Publication Date: 
August 14, 2009
The New York Times
Jad Mouawad

Assistant Professor Michael Wara's study on the efficacy of "Cash for Clunkers," a federal incentive program designed to take fuel-inefficient autos off the road, is featured in this New York Times Green Inc. story:




Mr. Wara found that the program cost between $200 to $400 per ton of carbon dioxide emissions avoided, and Mr. Knittel’s estimates went up to $500 per ton. By contrast, the climate bill recently passed in the House of Representatives would result in a $28 per ton carbon price in 2020, according to analysis by the Congressional Budget Office.

Mr. Wara did his calculation as follows: The average fuel economy of retired cars is 15.8 miles per gallon, and the average mileage of the new cars is 25.4 miles per gallon. Assuming the clunkers, which get destroyed, would have otherwise been driven another 100,000 miles, then the savings would be 2,392 gallons of gasoline for each car.

Using estimates from the Environmental Protection Agency that nearly 20 pounds of carbon dioxide are emitted for each gallon of gasoline burned, Mr. Wara figures that the savings amount to 21 tons of carbon. Since the government paid an average of $4,229 per clunker, the price of carbon abated by the program comes to $201 per ton.

But Mr. Wara points out that he is making cautious assumptions: the creaky old cars junked in the clunkers program probably would not have been able to make it another 100,000 miles. If the not-traded-in clunkers would have been driven only another 50,000 miles, then the price for each ton of carbon abated by the government program would jump to $402.