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Clunker Program's Environmental Merits Questioned

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Clunker Program's Environmental Merits Questioned


Clunker Program's Environmental Merits Questioned

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The government is putting the brakes on its popular Cash For Clunkers program. After 8 PM tomorrow, car buyers no longer will be able to trade in gas-guzzling vehicles for rebates ranging up to $4,500. Congress authorized $3 billion for the rebate program and consumers flocked to overwhelmed dealers. But while dealers could barely keep up with demand, questions remain about the program's effect on Mother Earth. Professor Michael Gerrard joins us by phone from New York. He's the director of Columbia Law School's new Center for Climate Change Law. Welcome to the program.

Professor MICHAEL GERRARD (Director, Columbia Law School's new Center for Climate Change Law): Thank you.

HANSEN: What's your assessment of the program's effect on greenhouse gas emissions?

Prof. GERRARD: The program has been wonderful for the economy, but it's been only a middling success for greenhouse gas emissions. The minimum required difference in the mileage for the old vehicles that were traded in and the new vehicles that were bought was just 4 miles per gallon, which is not much of a difference at all. In reality, people were buying better than that and so the average differential turned out to be 10 miles per gallon, which is much better. But it is still not a cost effective to way to reduce greenhouse gas emissions.

HANSEN: You don't consider it cost effective and it also didn't have an effect on the environment?

Prof. GERRARD: Well, it had a very, very small effect on the environment…


Prof. GERRARD: …but much smaller than many other expenditures would have. There's some calculations that it cost somewhere between $200 and $400 per ton of carbon dioxide reduced. That's way above the market price of carbon and way above many, many other methods of reducing greenhouse gas emissions.

HANSEN: Can you explain what you mean by the cost of carbon? I don't understand the equation.

Prof. GERRARD: There are some existing cap-and-trade systems around the world that trade in carbon. In the northeastern states in the United States we have the Regional Greenhouse Gas Initiative and carbon dioxide is selling there for about $3 a ton. In Europe, under their trading system, under the Kyoto protocol, it's around $18 or $20 per ton. So Cash For Clunkers at $200 to $400 a ton is not a good deal for the environment.

HANSEN: Could the government have run this program so that it had a more substantial environmental impact?

Prof. GERRARD: There are two particular things the government could have done. First, it could have required a greater mileage differential. So instead of a minimum of 4, you could have had a minimum of 15 miles per gallon differential, which would have made a big difference. Secondly, there was a provision in the law that automobiles, vehicles over 25 years old could not be traded in, and that made no sense from an environmental standpoint.

HANSEN: I had read that you said the government should provide low-interest funding, so industrial companies can make their individual boilers more effective.

Prof. GERRARD: There are lots of far more cost-effective ways to reduce greenhouse gases: the increase in the energy efficiency in the industrial sector, increases in energy efficiency is commercial lighting and residential lighting. All would be several orders of magnitude more cost-effective from a fuel-saving and greenhouse-gas perspective than Cash For Clunkers was.

HANSEN: Do you think it would have made a difference if the government had extended the Cash For Clunkers program even longer?

Prof. GERRARD: Well, it would have cost the government a lot more money. It would have sold more cars, it would have made very little marginal environmental improvement.

HANSEN: Michael Gerrard is director of the Center for Climate Change Law at Columbia Law School in New York. Thanks very much.

Prof. GERRARD: Thank you.

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