'Cash for Clunkers' Was Bad for the Environment

During the economic recession in 2009, the Car Allowance Rebates System (CARS), better known as "cash for clunkers," was billed as a way to both stimulate the economy and help the environment by encouraging Americans to trade in their older vehicles for a new, more fuel efficient vehicle. Writing for E Magazine, Jennifer Santisi, a freelance science and environmental writer, concludes, though, that the program did more harm than good for the environment.

Under the program, consumers who traded in an older vehicle were provided a $3,500 or $4,500 voucher toward the purchase of a new vehicle. About 690,000 vehicles were traded in under the program for a total cost of almost $3 billion.

One of the main problems Santisi pointed to was the engines and drive trains had to be destroyed, and could not be recycled, under the program's requirements. Guarding against potential fraud, the government did not want the vehicles that were traded in under the program to find their way back onto the streets.

After the other parts of the vehicles were sold to used parts dealers, the vehicles became scrap metal. For each ton of metal shredded, Santisi reported, about 500 pound of shredder residue is produced. This residue "typically consists of a mix of materials including polyurethane foams, polymers, metal oxides, glass and dirt," and ends up in landfills.

This would not be the first time the CARS program has come under fire for its supposed pro-environment claims. Many noted at the time of the program that the new vehicles purchased for the program already consumed a great deal of energy when they were manufactured. The fuel savings from slightly better gas mileage may not offset the energy consumed to make the new car in the first place.

Under the program requirements, Brad Plumer noted for The Washington Post in November 2011, one could conceivably trade in a 14 mpg Hummer for a 18 mpg SUV. Would that 4 mpg gain offset the amount of energy consumed from mining the ore and producing the steel and other raw materials, transporting those raw materials to manufacturing facilities, building the vehicle, and transporting parts to the manufacturing facilities and the finished vehicle to the showroom?

A 2009 report by Resources for the Future found that the CARS program reduced carbon-dioxide emissions in the United States by 9 million to 28.4 million tons, which is meager compared to the 5-6 billion tons that are produced each year. Additionally, the report did not account for the carbon-dioxide emissions that resulted from making the new vehicles in the first place.

Another common criticism of the program was that it was essentially a government handout to the wealthy and upper-middle income and hurt the poor and lower-middle income. The poor and lower-middle classes were unlikely to take advantage of the program because new cars are too expensive for them. Plus, by taking those 690,000 used cars off the market, the program increased the cost of the used cars that the poor and lower-middle classes are more likely to purchase.

Any environmental gains from having a more fuel efficient vehicle may also be offset by the fact that people tend to drive fuel efficient vehicles more, Santisi pointed out.

"It's an efficiency paradox: as we get more efficient at using energy, the overall cost of energy goes down, but we respond by using more of it," she wrote.