Brian,
I’d be really interested to hear why someone would get the same amount of money if they trade in a truck/suv but only get a smaller increase in mpg than someone trading in a car. Any chance you can look into this? Since I don’t trust detroit or their lobby, I would guess someone in congress caved on this one so that people would trade in their older SUV for a newer one that might get a couple extra mpg.http://money.cnn.com/galleries/2009/autos/0905/gallery.clunkers_cash/index.html
Joe, while I bet that you are correct to assume that the law’s final form was detrimentally influenced by the Detroit lobby, there is still a fair bit of logic behind the bill.
First, let’s reiterate something that I’ve talked about before: Miles Per Gallon is not a very accurate way of measuring the fuel savings associated with getting better gas mileage.
A better way to look at it is Gallons per 100 Miles.
| MPG | Gallons per 100 Miles | 10,000 Miles at $2.50 |
|---|---|---|
| 10 | 10.0 | $2,500 |
| 11 | 9.1 | $2,273 |
| 12 | 8.3 | $2,083 |
| 13 | 7.7 | $1,923 |
| 14 | 7.1 | $1,786 |
| 15 | 6.7 | $1,667 |
| 16 | 6.3 | $1,563 |
| 17 | 5.9 | $1,471 |
| 18 | 5.6 | $1,389 |
| 19 | 5.3 | $1,316 |
| 20 | 5.0 | $1,250 |
| 25 | 4.0 | $1,000 |
| 30 | 3.3 | $833 |
| 40 | 2.5 | $625 |
| 50 | 2.0 | $500 |
The basic premise of the government’s Cash for Clunkers program is that replacing fuel inefficient cars is one of the easiest/cheapest ways to cut carbon output.
Replacing a car that gets 17 mpg with a car that gets 25 mpg saves about as much gas as replacing a car that gets 25 mpg with one that gets 50 mpg. Thus, rather then giving everyone Prius’s (remember, Obama’s already promising both rainbows and unicorns) its cheaper to get the older “clunkers” off the road.
That’s Great In Theory, But…
About 7 tons of CO2 are emitted in producing a new car. This means that the new car, if it uses one Gallon Per Mile less than the trade-in would be carbon-neutral at 70,000 miles.
That means, for the most part, that you’re looking at needing at least a three mpg fuel efficiency increase to be carbon neutral at 70,000 miles.
In order to be carbon neutral at 30,000 miles:
12 MPG must be raised to at least 17 MPG
13 MPG must be raised to at least 18 MPG
14 MPG must be raised to at least 21 MPG
15 MPG must be raised to at least 23 MPG
16 MPG must be raised to at least 26 MPG
17 MPG must be raised to at least 28 MPG
18 MPG must be raised to at least 31 MPG
But What About Joe’s Question?
In the current economic environment, and given the other ways this money would be spent by the Democrats, I’m not really opposed to the program.
First, this Cars for Clunkers program is properly looked at as a way to exchange a vehicle that gets less than 18 mpg for a car or a truck. The way CNN presents it, the initial impression is that you have to exchange a car for a car or a truck for a truck.
That is not the case.
Second, this Cars for Clunkers program should really be looked at as a way to get SUV’s off the road, not cars. Any vehicle redeemed for a voucher under the Cars for Clunkers program needs to be rated at less than 18 mpg. There are far fewer cars than SUVs on the road that get less than 18 mpg.
The vehicles turned in under the Cars for Clunkers program will be predominantly SUV’s.
So, should buying a car get you a bigger voucher than buying an SUV?
Sure…maybe…I guess.
- There is nothing in the law which prevents a person from buying a more fuel efficient car. What Joe’s really saying is that you shouldn’t get the voucher for saving 2 mpg on the SUV.
But we’ve already learned that its probably more important to get the old SUV’s off the road than it is to get the Accord driver into the Prius.
- Replacing a vehicle that gets 18 mpg with one that gets 40 mpg saves $7,640 in fuel costs over 100,000 miles. That’s more than the top amount on the vouchers, and thus arguably enough of an incentive in and of itself.
- There is already in place the up to $3,400 tax credit for hybrids. Well, not really, since its already gone for Toyota and Honda and will phase out for Ford next April.
On the other hand, none of this is really going to do any good global warming wise. Eventually, the solution is to either innovate our way out of it or everybody takes four steps up the hill.
Paying people to drive cars that get 35 mpg isn’t going to solve anything.
Its All About the Unions Anyway
For those of you thinkin’ this is all just pork disguised as a green movement, yeah, you’re probably right. Its just one Democrat special interest group scratching the back of another. Just ask the Senator from Michigan.
“This is a big victory for families across Michigan and across our country,” said Stabenow. “This is a bill that saves jobs and helps small businesses affected by the economic downturn, all with the added benefit of helping the environment. This program will provide an economic stimulus at a time when hardworking families need it most.”
Under the program, consumers may trade in their older vehicles and receive vouchers worth up to $4,500 toward the purchase or qualified lease of a new, more fuel-efficient car or truck. The program will be authorized from July 1, 2009 to November 1, 2009 with $1 billion in emergency funding.
The trade-in vehicles must:
• Be in drivable condition
• Be continuously insured and registered to the same owner for at least one year
• Have a combined fuel economy value of 18 mpg or less (Work trucks must be pre-2002 regardless of mpg)
• Not be more than 25 years old with historic or aesthetic value. These vehicles are valued by hobbyists or are a valuable source of restoration parts.New vehicles
• The new vehicle must have a manufacturer’s suggested retail price of less than $45,000.• Passenger Cars: The older vehicle must get 18 mpg or less. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.
• Small Trucks and SUVs: The old vehicle must get 18 mpg or less. New small trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old vehicle, the voucher will be worth $4,500. (More…)
Or, why not just inflate your tires properly.
Brian I think you are right. When I first read the CNN article all I could think of was Carl Levin patting himself on the back. What a joke. If the law was to have any teeth, it should have specifically targeted low fuel effiency SUVs and replaced with high efficiency cars.
Quick thought though as I wrote that last statement; any idea how much CO2 is emitted to produce a hybrid car vs. a SUV vs. a regular car.
Seems like there needs to be a way to value carbon, rather than in terms of barrels of oil.
I think the whole CO2 business is part of the ruse. I don’t even care about carbon neutrality as an end itself. What I really care about is oil consumption, in particular, FOREIGN oil consumption. I care because our dependence on foreign oil is a huge national security issue and because oil is the largest contributor to what I see as an economically problematic trade deficit. Add to that, the fact that oil is a finite resource and you realize oil is just a really stupid foundation for our nations energy needs. Carbon neutrality is just a tasty side benefit of decreasing our dependence on oil.
I would assume that the carbon footprint of making a car is relative to how much “stuff” goes into making the car. So a big SUV is more than a car and a hybrid slightly higher than a similar “regular” car of the same size. But that’s all a guess.
If you look at this chart of Per Capita Energy Consumption, “car making” has been calculated at 14 kWh/d.
That’s twice as much energy, on a daily basis, as your kitchen appliances.
Its more than all the lights and gadgets in your life (12 kWh/d).
Its slightly less than the energy associated with getting food to your table (17 kWh/d).
Its slightly less than the energy associated with changing water temperature in your life (18 kWh/d).
I find it hard to believe that it takes only slightly more energy to produce a car than energy used by all the gadgets.
I believe the figures are in kWh/d, amortized over the life expectancy of the car as compared to the electricity used by the gadgets on a daily basis.
Thinking out loud:
If it takes one Gallon Per Hundred Mile of fuel savings to be carbon-neutral at 70,000 miles then we can conclude that it takes the carbon equivalent of 700 gallons of gasoline to make a car.
700 gallons of gasoline divided by the 2007 median age of passenger cars in operation (9.2 years) is the carbon equivalent of 0.21 gallons of gas a day over the life of the car.
One gallon of gasoline emits 20 pounds of CO2.
That’s 14,000 pounds of carbon over the life of the car, or 4.2 pounds of CO2 per day.
1 kWh of electricity generated by coal outputs 2.11 pounds of CO2.
The carbon output of .21 gallons of gas is the equivalent of 2.0 kWh/d of coal generated electricity.
I’m officially Confused
For my big series on energy, I was using the numbers in David MacKay’s Without Hot Air. He put the car’s “embodied energy” at 14 kWh per day, or 76,000 kWh total. That’s 80.18 tons of carbon.
More research coming…..
The more I read about this program the more I think it is pointless. I read something the other day, on CNN I think, that the 4500 dollar credit per clunker is a replacement for the trade in value of your car. So if you happen to have a car/truck that is worth more than that this will not help you. Also the article that I read made a very good point. Many people (not all) who are driving “clunkers” worth less 4500 are perhaps doing so for a reason, they can’t afford a new car. So unless you have an old car and really are in the market for replacing said car I don’t see this program being much of a benefit.
That’s a very good point Mike. And it raises the question of what effect the program has on used car prices. The recent dearth of new car sales has significantly reduced used car inventory. Interestingly, this looks like it has reversed the dramatic decline in used car prices which occurred because of the recession.
The Manheim Used Vehicle Index peaked at 115.8 in September 2007, more or less the very beginning of the financial crisis. It was still at 110.7 as of September 2008. It fell to 98.0 in December 2008 but has already rebounded to 109.1.
Now, the government is going to step into that already tight market and remove and entire class of vehicles: 1990’s era SUVs.
I have been unable to find a satisfactory, understandable source to determine out how much carbon is emitted during the car production process.
This is a study from MIT from earlier in the decade. Unfortunately, my skills aren’t sharp enough for me to be able to fully understand it. Joe, maybe you can. The operative chapter is 4.
I found that study through this article, which alleges that you just multiply the weight of your vehicle by 2.5 to get figure out the amount of carbon outputted to produce it.
That calculation is consistent with what I was using earlier, which is from The Green Grok, the site of Bill Chameides, Dean of Duke’s Nicholas School of the Environment.
My attempts at understanding parts of the study have left a few impressions however.
Joe asked earlier about the relative energy consumption of car/SUV/hybrid. It appears that production of aluminum-body automobiles are 30-40% more energy-intensive. Construction of aluminum-body autos from recycled materials brings energy requirements down in line with construction using virgin ferrous metals however.
A plastic-intensive auto body would require only roughly a third of the primary energy and aluminum-intensive auto body does, if exclusively using virgin materials. If using recycled materials instead, the differences in primary energy and CO2 emissions would become negligible.
Roughly, use of virgin plastic, virgin ferrous metal and recycled aluminum all consume about the same amount of energy. Recycled ferrous metals consume about 30% less, virgin aluminum about 30% more.
The study’s 1996 baseline vehicle incorporated nearly 890 kg of ferrous metals, 100 kg of different types of plastics, roughly 80 kg of aluminum, and about 200 kg of other materials.
One of my nieces looked into this-they were thinking of trading in their 2004 Explorer. Good shape, just miles. They found out the car literally had to be junked (those nasty emission numbers). They walked away-couldn’t believe the waste.
Yeah, that’s not often mentioned. And as I think Brian pointed out before, the carbon production/resource consumption of building a more efficient car would most likely consume the benefits of said increased efficiency, and then some. 🙁
Well, it looks like my prediction that “the government is going to step into that already tight market and remove and entire class of vehicles: 1990’s era SUVs” was pretty spot on.
The Top Ten Cash for Clunkers Trade-Ins:
1. 1998 Ford Explorer (14 city and 19 highway)
2. 1997 Ford Explorer (15 city and 19 highway)
3. 1996 Ford Explorer (14 city and 19 highway)
4. 1999 Ford Explorer (14 city and 19 highway)
5. Jeep Grand Cherokee (14 city and 19 highway)
6. Jeep Cherokee (16 city and 20 highway)
7. 1995 Ford Explorer (15 city and 20 highway)
8. 1994 Ford Explorer (15 city and 20 highway)
9. 1997 Ford Windstar (15 city and 21 highway)
10. 1999 Dodge Caravan (15 city and 22 highway)
The Top Ten Cash for Clunkers New Cars:
1. Ford Focus (24 city and 33 highway)
2. Honda Civic (26 city and 34 highway)
3. Toyota Corolla (26 city and 35 highway)
4. Toyota Prius (48 city and 45 highway)
5. Ford Escape (22 city and 28 highway)
6. Toyota Camry (19 city and 28 highway)
7. Dodge Caliber (23 city and 29 highway)
8. Hyundai Elantra (24 city and 33 highway)
9. Honda Fit (27 city and 33 highway)
10. Chevy Cobalt (25 city and 35 highway)
“White House spokesman Robert Gibbs says the average fuel economy increase so far is 9.4 mpg; a 61% increase.” Based on the first 80,000 sales, “83% of the vehicles traded in have been trucks, while 60% of the vehicles purchased under the program have been cars.”
At a glance
It would appear that the top ten trade-ins, exchanged for the top ten purchases, would be carbon neutral at around 30,000 miles. I’d have to call that a fairly successful program….
This is funny. Well, not really funny ha ha. Funny as in sad.
So, back on the campaign trail, when all the Republican’s were making fun of Obama for saying that the answer was “just inflating your tires properly,” he had it right all along.
$3 billion later…
Well…….the fact that inflating your tires properly would have achieved greater Fuel and CO2 efficiencies than cash for clunkers doesn’t exactly mean “he had it right” during the campaign, just that cash for clunkers didn’t really do much in that regard. There are lots of other arguments to be made for and against a program like cash for clunkers, particularly economic ones that I think have more relevance. I won’t bother with them since I think you probably understand them better than I do and this comment is simply humorous observation rather than an actual assertion of something.
And…nothing about the cash for clunkers program prevents people from properly inflating. That said, I can’t help but wonder if a targeted tax credit program which encouraged gas station owners to install free air stations at all pumps wouldn’t have been a better use of the money.
I suspect that people would be lot better about filling up their tires if it was easier to fill them up. Not that its real difficult to do it right now of course. But if you made it idiot-proof and lazy-proof by putting those new air machines that allow you to enter the psi you want and then just stick the hose on the tire and presto-chango its done at every gas pump, the nation’s collective optimal tire pressure would be a lot closer to being reached very quickly.
Overall, I still consider the program to be a qualified success. This is supported by something which we haven’t talked about which is that most of these late nineties SUVs that were turned in weren’t long for the road anyway. These new Prius’ would make it to the road eventually in place of the SUVs. This program simply made it happen maybe 2 years early. In that respect I don’t think the entire CO2 cost of the car should really be factored into the equation.
There. That is my actual assertion. $3 billion would have been better spent on new, free air stations at every gas pump.
yea brian i am gonna have to agree with you that the air pumps would have been a way better way to spend the money. and as mike said its kind of a waste because the people who really needed this govt money to help get new car couldnt even make good use of the 4500 because they had no other money to pay for the rest of the car. the govt should of used the used cars that were good shape and turned around and sold them cheaply to those who had gasguzzlers so they could have a more fuel efficient ride. and it seems that 90% of the people who utilized this program were already planning on buying a new car anyways and ended up getting more for their clunker then they would of. so yes the program was a success 10% of the people but for the other 90% the govt lost money for no reason because these people did not need the money. and again those who did need it got no help from it because they couldnt afford a brand new car. overall this program had potential to be great but was not thought out very well by our money hungry govt
Brian, good point. The two programs wouldn’t have to be mutually exclusive.
On a side note, I was watching the news the other day and they were reporting that part of the reason the cash for clunkers program is being shut down prior to reaching 3 billion is because:
1. Hundreds of dealerships are complaining they have not received the payments from the government, even though they’ve fulfilled their obligations (i.e. paperwork, destroyed tradein, etc)
2. There is such a backlog of submissions that they fear they may actually have already surpassed the 3M figure.
3. Cash for Clunkers customers are complaining they can’t pick up their vehicle due to the paperwork backlog. (this goes back to #1 where dealers are hesitant to release a vehicle that hasn’t been fully paid for)
Obamas response?
(I’m paraphrasing here..) “The Cash for Clunkers program has been a runaway success. We are essentially victims of our own success with this program as its popularity has created a backlog that we’re working through as quickly as we can. Please be patient.”
So basically, if you’re a consumer or a dealership, you’ve got to wait. Why? Because the program was successful.
Now apply this scenario to a public healthcare option. Imagine if it’s similarly “successful”. I can just hear Obama now, as people complain about having to wait to see a Doctor, telling us to be patient, we only have to wait because the program is so successful.
Very similar to Obama’s response as to how/why the public option is going to work alongside private insurance. “You see, what we’ve got here, is the Postal Service, which works.. along side UPS and Fed Ex.”
If ever, in the history of the world, you were trying to explain the benefits of a “government option” the three things that you should not compare are UPS, FedEx and USPS.
Heheh, yeah. I’m constantly astounded at how horrible the postal service is, compared to UPS and Fedex. I’ve always said, I think UPS should get into the letter business, and try to get in with companies who do direct mail, just put USPS out of business all together.