Cashing in

House approves “Cash for Clunkers” bill, enviros unimpressed 12

The House approved a measure on Tuesday that would give Americans a cash incentive to trade in their old, gas-guzzling automobiles for slightly more efficient models. The “Cash for Clunkers” bill passed through the chamber with a 298 to 119 vote, and the Senate could vote on similar legislation later this week.

The bill would give drivers a voucher of up to $4,500 for trading in their older autos for more fuel-efficient models, at a total cost to the federal government of $4 billion. Backers argue that the scheme would boost the sale of new automobiles and reduce carbon dioxide emissions.

“The bipartisan cars act will shore up millions of jobs and stimulate local economies. It will improve our environment and reduce our dependence on foreign oil,” said lead sponsor Betty Sutton (D-Ohio) during floor debate on Tuesday.  “The cars act demonstrates that we can free ourselves from the false argument of either you are for the environment or you are for jobs. You can do both, you must do both.”

Where do I sign up?

The House bill would go into effect within 30 days and make vouchers available to car shoppers for a year or until the funding runs out, whichever comes first. Participants could trade in vehicles of model year 1984 or later that are currently in use—no trading in the one that’s been gathering dust in the backyard since Jimmy Carter was in office—and the old cars would be crushed or otherwise permanently removed from the roads.

Under the plan, a “clunker” is defined as a car or light truck that averages 18 miles per gallon or less. For cars, drivers could get a $3,500 subsidy for purchasing a new model that gets at least 22 mpg or 4 mpg more than the old one, or $4,500 for a new car that gets at least 10 mpg more. For light trucks and SUVs, drivers could get $3,500 for a new model that averages at least 2 mpg more than the old one, or $4,500 for 5 mpg more.

Critics argue that the bill’s miles-per-hour benchmarks for new vehicles are way too low and wouldn’t do nearly enough to curb emissions.  (Consider that the Obama administration’s new fuel-economy rules will require cars to get 39 mpg and light trucks to get 30 mpg by 2016.)  Grist’s Jonathan Hiskes reported on environmental arguments against the bill when President Barack Obama endorsed it last month.

While the measure might not do much for the warming planet, it would be a boon for the beleaguered auto industry.

“The passage of this legislation is good news for manufacturers, auto dealers, suppliers and most importantly consumers,” said Alliance of Automobile Manufacturers President and CEO Dave McCurdy. “With just released May auto sales reporting a 31 percent drop from just a year ago, we can’t afford to wait any longer. Now more than ever we need this fleet modernization proposal to be passed by the Senate and quickly signed into law by the President.”

Hold your horsepower

The Senate, however, is not quite so ready roll.

Sens. Debbie Stabenow (D-Mich.) and Sam Brownback (R-Kansas) have introduced a bill similar to the version the House passed, but Dianne Feinstein (D-Calif.), Susan Collins (R-Maine), and Charles Schumer (D-N.Y.) have proposed an alternate version with stronger fuel-economy requirements, which they say would “achieve 32 to 38 percent greater oil savings” than the House version.

Keep your eyes on the Senate to see how this all shakes out.

Kate Sheppard is Grist’s political reporter.

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  1. Dave from Canada Posted 8:24 am
    10 Jun 2009

    25-50% of an automobile's lifetime emissions are created in the manufacturing of that auto.Cash for clunkers schemes don't help the environment; they are basically subsidies for auto makers.
  2. Tyler Durden Posted 9:05 am
    10 Jun 2009

    Dave has it right, but this bill goes beyond that.  Once it was watered down by the American auto industry, this bill actually does significantly more harm than good.  The bill in its original form would have only applied to people who got a significant increase in mileage by changing cars.  The American industry knew that this would not help sales of its gas guzzlers, so it watered down the legislation to give people a financial incentive to buy SUVs and other vehicles that don't improve mileage that much or sometimes at all.  I strongly oppose this bill in its present form.  Maybe it will get amended in some positive way in the Senate, but I'm not holding my breath.
  3. Clunker Bill Posted 9:20 am
    10 Jun 2009

    "25-50% of an automobile's lifetime emissions are created in the manufacturing of that auto."Even so, at least 50% of emissions come from the vehicle being driven, so isn't this a good thing?This may not be a perfect bill - does such a thing exist? - but I think it's a step in the right direction. And I don't think Obama will sign it unless it actually has a tangible effect.Do you guys think this bill should be passed? Vote in this poll and see the results after you vote. I'm curious as to how this will turn out. Check out the poll here: Cash For Clunkers PollIn reality, the gov needs to be investing in R&D for boron powered cars. But that's a whole different topic! 
  4. John Fish Kurmann Posted 9:31 am
    10 Jun 2009

    Dave and "Durden": My understanding is that you're vastly overestimating the percentage of a vehicle's lifecycle energy usage that's attributable to the manufacturing phase. Here's a blogpost from the Union of Concerned Scientists on that subject (http://hybridblog.typepad.com/my_weblog/2006/08/hybridcenter_qa.html):HybridCenter Q&A: To Trade or Not to Trade? Interesting question that I thought might be more widely informative: Q: A friend of mine drives a 25-year-old gas
    guzzler.  His mileage is terrible, but he thinks he's probably doing
    the ecologically right thing by holding on to his old car, given the
    resources and energy required to make a new car.  I had never
    considered this angle, which seems crucial to acting in an
    environmentally responsible way.
    I wonder if either of you have ideas about this or know of a
    resource to consult to help one assess the full impact of one's
    consumption.  Trading your old station wagon for a Prius, or recycling
    your old air conditioner and buying a newer, more efficient model, is
    it really saving energy?
      A: A variety of reputable investigators have
    concluded that 85-90 percent of energy use and global warming emissions
    attributable to an average vehicle over its entire lifecycle come from
    operation. Only 10-15 percent is production and disposal. This is true
    for both hybrids and conventional vehicles.

    In order to achieve
    a net reduction in per-mile global warming emissions, (i.e. to offset
    the additional emissions from manufacturing and disposing of another
    vehicle) the new vehicle will have to get 10-20 percent better fuel
    economy than the old vehicle, assuming the vehicle will be driven in a
    typical way (i.e. that it will be used for its full useful life -
    usually around 170,000 miles).

    Or, to look at it a different
    way, how long would it take to offset the manufacturing and disposal
    energy associated with the new car?

    Assuming 15 percent of
    lifetime energy use for the new car is manufacturing and disposal, and
    a lifetime of 170,000 miles, you can calculate the miles which you need
    to drive in order to make up for the manufacturing and disposal of the
    new car, using the following formula:

    Miles = 25,500 / (MPG_new / MPG_old - 1)

    For
    example, suppose his old vehicle gets 15 mpg and he's considering
    replacing it with one that gets 35 mpg. As soon as he's driven  25,500
    / (35 / 15 - 1) = 19,100 miles, he will have already made up for the
    energy and global warming emissions that went into producing that
    vehicle. For the remaining 150,000 miles of the new vehicle's life, the
    reductions in global warming pollution are all "profit."

    That's not to
    say he should drive his old car another 19,000 miles. Not at all. So
    long as he replaces the old car with one that gets at least 10-20
    percent better fuel economy, he should make the replacement right
    away.  In certain situations, it may take longer for fuel savings to
    make up for the manufacturing emissions. For example, if the driver
    does very little driving, it will take longer to offset the
    manufacturing emissions, and it may be worth discounting future
    emissions - something that's beyond the scope of the current discussion. Posted by: Don August 03, 2006 However, given we're talking about heavily subsidizing the trade-in through the government, I think we should set the bar higher than 10-20% so we get greater benefit for the bucks. I'm thinking a fuel economy improvement of at least 25% should be required to get the subsidy.
  5. solargroupies's avatar

    solargroupies Posted 9:46 am
    10 Jun 2009

    This is ridiculous! Bailing out irresponsible people who have been thumbing their noses at those of us who have been driving low C footprint economy cars for years? Rewarding bad decisions? What else should we expect from the US Congress? My climate-denier friends will have a good chuckle hearing this, now that they can get bailed out and trade in their hummers and V-8 pickup-commuter cars, subsidized by - guess who? American taxpayers!
  6. davescott Posted 10:01 am
    10 Jun 2009

    The flaw in a proposal to subsidize 22 mpg cars is self-evident.  It's a step backwards.  I'm not a technical expert but I'm sure there is a point where mileage gains more than offset the environmental costs of manufacturing.  But you don't need a physicist to tell you that 22 mpg isnt it.
  7. justlou Posted 10:14 am
    10 Jun 2009

    This legislation is ripe for abuse.  I could trade in an old work truck that gets 10 mpg for a new truck that gets 12 mpg?  And this is supposed to be good for the environment and the climate?  Or I could trade for a Toyota Prius that was on the burner anyway.  My old truck has zero trade in value.  So, I could have $4500 to buy a newer used work truck that gets equally bad mileage. House of Representatives:  Cut the crap and call this bill exactly what it is -- a stimulus bill for the auto industry.  Jeez, they can deceive themselves but they shouldn't expect us to take their stink bait.  
  8. Biodiversivist's avatar

    Biodiversivist Posted 12:29 pm
    10 Jun 2009

    Justlou hits the nail. This really does not have anything to do with the global warming issues and does anyone have any answers to my questions?  
  9. Chris Pratt Posted 12:32 pm
    10 Jun 2009

    The devil of this bill is in the details, but so far, and I don't expect it will get much better when the senate votes on it,  it is an environmental nightmare.  Lets get the numbers straight, how much of the car's total energy consumption goes into the manufacturing and how much into the fuel consumption is a complicated calculation that can vary tremendously depending on how many of the embedded energy costs are included and how they are measured.  Maybe this would be a good bill if we used the 50% figure to err on the side of caution.  That aside, it falls short except as a stimulus for the auto industry which we know is a major contributor to gas consumption and C02 emissions and is not something we want to stimulate.  I am wondering where the RD is for improving mpg after market, that would increase mpg and save on the environmental cost of producing more cars.  That is where we need to go to be sustainable.
  10. Peartree's avatar

    Peartree Posted 3:07 pm
    10 Jun 2009

    As indicated in the article, buying new vehicles, in the final analysis, is counterproductive for the environment. Older vehicles should be retrofitted, that is, turned into smarter & environmentally suitable vehicles. Govt. funds should be used to improve upon the technology by setting up technology incubators in Michigan (and other ecoomically depressed Rust Belt areas) for  innovative start up companies and automotive research. Some of this technology can be employed for trucks and other modes of travel. Once a suitable system is developed,  car dealers can convert their operations to servicing the older cars and bringing them up to environmental standards.
  11. John Fish Kurmann Posted 8:31 pm
    10 Jun 2009

    I agree that this bill is primarily intended to indirectly subsidize automobile production, getting the factories humming, workers working, and automakers--particularly the U.S. based ones--into better financial shape.
    Regarding the work truck issue, JustLou, though upgrading from a 10 MPG vehicle to a 12 MPG vehicle doesn't seem to be much of an improvement, that is a gain of 20%, not too shabby. In fact, if you do the math, you can see that twice as much fuel will be saved over 100,000 miles of driving by switching from a 10 MPG vehicle to a 12 MPG vehicle (1,667 gallons) than by switching from a 30 MPG vehicle to a 40 MPG vehicle (833 gallons). I know, it seems hard to believe at first glance--I found it hard to believe the first time I read it--but check it yourself if you don't believe me.
    Of course, one will still use far less fuel overall by driving 100,000 miles in a 30 or 40 MPG vehicle than in a 12 MPG vehicle, so we need people to take a step back and ask a different question: What sort of vehicle will meet my daily needs? Many people choose a vehicle which has passenger, cargo, and/or hauling capacity they only use a few times a year rather than a vehicle that meets their daily needs and borrowing or renting for those unusual needs. Right-sizing needs to come first, and then one can consider which vehicle within the class that meets one's daily needs offers the best combination of fuel efficiency, safety, and quality.For those who actually need a truck for work or a large vehicle to haul a large family, it can make a very significant difference to go from 10 MPG to 12 MPG, and it's possible the increase will be much larger if one really has a 10 MPG vehicle. The 2009 Ford Expedition full-sized SUV, for example is rated to get 16 MPG combined city/highway and the 2009 Ford F-150 2WD is rated to get 17 MPG combined. 
  12. justlou Posted 5:30 am
    11 Jun 2009

    Clear-The-Lot legislation will contribute to the real combined fleet average MPG lagging far behind the new CAFE standard for many, many years.  We give too many conflicting signals to the auto industry.  But, fortunately, the right signal appears to be coming in higher gas prices once again.  Bad for the economy in the short term, but in the long term we need this market feedback to prepare for  sustained high energy costs coming down from the peak.  We could not have picked a better target on our profligate heart than to bring the auto industry to its knees.  Unfortunatly too, is that our current extremely crappy fleet average is draining capital from our economy just when we need that capital to recover from our busted profligacy by sustaining our profligacy (buying more crap).  

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