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CGI Live Blogging: Cash For Clunkers “Not a Silver Bullet”

cashforclunkers_deathrowCash for Clunkers program – funded with $3 billion of U.S. government money – was launched as a commitment at last year’s CGI Annual Meeting?

Jack Hidary, chairman of, a nonprofit coalition of organizations dedicated to promoting clean technology in the transportation sector across the United States, spoke at a press conference this afternoon to give an update on the “progress” of the commitment.

He said it was a “win-win-win” situation: for the auto sector, the program saved and maintained jobs; for consumers, the new cars meant a lower cost of maintenance and a cheaper tank of gas; and for the U.S., it lessened the country’s dependency on foreign oil, an economic and national security dilemma.

In three and a half weeks this summer, he said, the Cash for Clunkers program (officially known as the Car Allowance Rebate System – CARS) recycled 700,000 old vehicles, and increased the fuel efficiency of old vs. new vehicles from 15.3 miles per gallon to 25 miles per gallon – a more than 60 percent increase. “It exceeded what I thought was possible,” he added.

But not everyone is so enthusiastic about the results of the program. Earlier this summer, EMBARQ’s founder and senior fellow Lee Schipper, along with his colleagues, published research in an op-ed for The Washington Post that said the environmental effects of the government-funded program would be “negligible.” (Read about their specific findings here.)

Some of the overall criticisms of the program were that it burned through government funds too quickly, it didn’t really save that many carbon emissions in the grand scheme of the climate change crisis, it encouraged people to drive their shiny new cars so that any carbon savings were offset by increased travel, and it didn’t make any provisions to protect American automakers.

Hidary was quick to recognize that the program wasn’t perfect, and it was created through a series of political compromises made during the legislative process. “Would we have liked a greater jump in efficiency? Of course,” he said. “[Cash for Clunkers] is not a silver bullet; it requires a package of policies.”

He did say, though, that the program was a “great step, a great bridge,” and one of its biggest outcomes was that the average miles-per-gallon spread between the old and new vehicles were much higher than the minimum requirements. It was proof that people were able and willing to use the program as an opportunity to “trade up,” while also thinking about the environment.

Some of the complementary policies that should also be pursued, Hidary suggested, are higher CAFE standards, and a “feebate” system, currently proposed by Sen. Jeff Bingaman (D-N.M.), who calls for a “revenue neutral” program of rewarding buyers of more fuel-efficient cars with rebates while imposing fees on people who buy less fuel-efficient cars.

Bracken Hendricks, senior fellow at the Center for American Progress, said one of the biggest successes of the program was changing the way American consumers thought about how they purchase their cars. It moved from being a simple transaction (i.e. buy the cheapest car), he said, to being a more strategic investment decision that considers the cost of maintenance and savings from fuel efficiency. “If we can get them to think [about their purchase], we’re getting a lot more than a single ton of carbon,” he said.

Hendricks also talked about the intention, posed at this year’s CGI Annual Meeting, to create a “Green Mobility Action Network,” which would look at several different types of programs to reduce oil dependency and transform America’s car-centric culture. These mechanisms would include the use of information technology to track carbon emissions from products and services more closely, and also, creating new business models for things like ridesharing to improve mobility and accessibility, and ultimately, get more personal cars off the road. He also called for tapping into the “gold mine” of energy efficiency in the U.S. building sector by supporting the 1.5 million constructions workers and small businesses who can do things like retrofit old buildings and replace energy intensive lightbulbs.

Apparently, Brad Pitt and Bill Clinton will be unveiling some big idea at 5:00 p.m. Thursday evening about a commitment to improve the sustainability of the built environment. (Some context: Brad Pitt established the Make It Right Foundation to rebuild homes — in an environmentally sustainable way — in the Lower 9th Ward affected by Hurricane Katrina.)

Don’t forget, too, that EMBARQ Director Nancy Kete will be speaking on a panel about the “Infrastructure of Place: Sustainability and the Built Environment” on Thursday morning at 10:30 a.m.

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  • Cash for clunkers was not a boom for the car industry or the environment. It just took 700,000 running cars off the road. Because of that, used car prices have gone up and auto repair shops and car donation charities have lost a lot of money.

  • Cash for Clunkers probably, though not certainly, led to some emissions reductions. However, it certainly did a poor job of spending public money for carbon reduction (at least $200/ton, perhaps more than double that), and failed to leverage other environmental and social co-benefits which are so readily available elsewhere in our transportation system. Using that money instead to fund transit–which is struggling for lack of funding nearly everywhere in the United States these days–would have produced more jobs, relieved congestion, and provided benefit across the socioeconomic spectrum rather than only to those in range of affording new cars.

    The argument that the Cash for Clunkers has put Americans in the mindset of considering fuel efficiency when purchasing a vehicle is hopeful but unverified. If it did–or even better, if it set the stage for a lasting “feebate” program–perhaps the $3 billion could yet come to look like money well spent.