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The Best Science Writing Online 2012
Showcasing more than fifty of the most provocative, original, and significant online essays from 2011, The Best Science Writing Online 2012 will change the way...
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The Cash for Clunkers program offers a cautionarytale for the future of climate change control. The federal program paid individuals up to $4,500 to replace their “clunker” automobiles with new, higher-mileage vehicles. Part of the purpose was to give a lift to the ailing auto industry. Another part, at least it was claimed, was to mitigate climate change by getting old high-carbon-emissions vehicles off the road. But billions of dollars were spent quickly without clear answers on what we were getting for our money.
The broad principle of climate change mitigation is to reduce greenhouse gas emissions, including carbon dioxide (CO2) from the combustion of fossil fuels, to target levels at the minimum net cost to society. There are many ways to reduce emissions: drive more efficient or electrically powered vehicles; produce electricity with renewable energy sources; capture CO2 from power plants and store it geologically; restart the nuclear power sector; weatherproof homes to reduce energy for heating and cooling.... The list is long, with different time horizons, costs and uncertainties.
Clearly, not every method of reducing emissions makes equal sense. Consulting firm McKinsey & Company has recently published estimates of the abatement costs of various technologies (www.mckinsey.com/clientservice/ccsi/greenhousegas.asp). Highly efficient lighting, appliances and vehicles, along with better insulation and other technologies, can save more in energy costs during their lifetime than the upfront capital for installing them: they are better than free to society. Other options—notably, renewable energy sources, forest conservation programs and carbon capture and storage—tend to come in below $60 per ton of avoided CO2 emissions.
Some carbon-reduction ideas are so expensive they should play no part in the policy mix. Yet because lobbyists overrun our legislative processes, every climate idea will have its corporate backers, and lots of terrible ideas will no doubt be advocated.
Let’s make a rough calculation of how much mitigation per dollar the Cash for Clunkers program really achieved. The typical trade-in was reportedly a 15.8-miles-per-gallon (mpg) vehicle for a 24.9-mpg vehicle. Assuming that the average vehicle is driven around 12,000 miles a year, the clunker annually required 759 gallons of gasoline compared with the new vehicle’s 482 gallons. Because each gallon of burned gasoline produces 8.8 kilograms of CO2, every car saving 278 gallons a year signifies a reduction of 2.4 metric tons of CO2 a year.
Assuming that a clunker would have been driven on average another five years, the annual budget cost per car is $900 ($4,500 divided over five years, and ignoring the interest factor for simplicity). If we value gasoline pretax at roughly $2 per gallon, we are saving around $555 a year. The net annual cost of the CO2 reduction is therefore $345, or $141 per ton of CO2. Note that a full life-cycle analysis would also account for the CO2 emitted in the production of the new car, which would modestly diminish the net CO2 reduction and modestly raise its net unit cost.
This crude calculation is subject to many refinements but shows that Cash for Clunkers represented a very high cost per ton of CO2 avoided. Countless ways to reduce CO2 emissions are less expensive than smashing up autos five years before their natural demise.
We will blunder badly and repeatedly in climate change control unless we put some transparent control systems in place. We should rely heavily on price signals rather than one-by-one subsidized programs, except for the subsidies needed to bring new technologies such as electric vehicles to the commercial phase. An economywide tax on each ton of CO2 emissions, programmed to rise gradually over time at an appropriate social discount rate, would induce the marketplace to take actions that are less expensive per ton than the tax and to leave behind measures such as Cash for Clunkers or corn to ethanol. A carbon tax would be far more effective in this regard than the cumbersome cap-and-trade system proposed by the House of Representatives.
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19 Comments
Add CommentThe magazine article indicates that an extended version of the essay is available on the SA web site. Where is it?
Reply | Report Abuse | Link to thisJunk the Clunker?
Reply | Report Abuse | Link to thisI am also a skeptic of short-term policies and their unforeseen consequences. In the essay by Jeffrey D. Sachs, “A Clunker of a Climate Policy”, the author has the right idea to look for technologies that have a low cost of avoided CO2 emissions. However, an obvious omission from the list of potential low carbon technologies is nuclear at $9/ton CO2eq which actually surpasses wind, solar PV, and CCS.
However, I found Sachs analysis of the Cash for Clunkers payback on CO2 emissions less than convincing. As the author states, mitigation of climate change was secondary to the need to invigorate the ailing auto industry. However, no discount in the program costing was credited for this “higher” purpose. The values chosen for the cost of gasoline (limited to $2/gal) and the remaining lives of the clunkers (limited to five years) are too uncertain to draw any conclusions regarding the costs for CO2 avoidance. Using slightly different assumptions (e.g., $3.23/gal or 8 years of remaining life) could have easily netted a very attractive “zero” carbon cost for the clunker program.
The efficiency of a carbon tax versus cap-and-trade continues to be debated. Current legislation favors cap-and-trade as a move toward bipartisanship. Be this the right kind of tax or not may not be important at this juncture. Any legislation that results in limits to carbon emissions should be viewed as a step in the right direction.
David Shropshire
Idaho Falls, Idaho
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Reply | Report Abuse | Link to thisI recall reading an article here several months ago which told the story of an Average Joe turning in his (surprise!) big 4WD truck for an SUV - a net increase of about 3MPG.
Reply | Report Abuse | Link to thisAllowing this sort of thing to happen is simply outrageous. It's events like this one that convince me that politically driven solutions in the modern world are automatic failures by virtue of their attempts to make everybody happy.
If we ever want to get out of this giant mess we have created for ourselves, people are going to have to learn to walk the hard line. I'd rather piss off a few dozen people and live than make everybody happy just before we all die. Which is pretty much what we're up against in the long run.
It would have been more appropriate and more effective both for the environment and for the ailing fossils of the american autoindustry to offer the credit only to hybribs or cars that get more than 40 mpg. The ailing car mfrs are ailing because they choose, around the 1970s, to start maximizing profits by making crappy components and cars; this highly effected efficiency. Now, I watch these car commercials aimed at the uneducated environmentalist. They claim there cars are super efficient, but when you look at the specs, theres no change.
Reply | Report Abuse | Link to thisThe author does not point out that the magority of power used in the US is for industrial applications. Why must they attempt to put all the burden of efficiency on the citizens rather than the massive energy consumers? Well, it goes back to maximizing profit at any cost and coruption of our government.
Yeah, it wasn't perfect, was it...
Reply | Report Abuse | Link to thisBut it did pry the money loose again for a bit. Which would you rather have, an imperfect solution or another economic catastrophe when you're already in the middle of one?
At least it was an improvement at all. That last offered incentives to move to larger, bigger SUVs & trucks, positively worsening the gas demand, pollution & safety on the roads.
Remember, this is government we're talking about here. Avoiding outright failure is often as good as it gets.
This article misses the point. Cash for Clunkers wasn't proposed, debated or passed as a climate change remedial measure. It was, first, a part of the economic stimulus bill intended to get consumers start circulating money. Second, it was intended to clear out excess new car inventory so dealers and manufacturers would be better positioned to well the next year's models when the economy eventually did rebound. The climate change benefits were merely considered an added benefit of a proposal thought would have gone forward anyway.
Reply | Report Abuse | Link to thisLet no one be miss informed, Cap & Trade is a tax on co2 emissions. It is not only a tax that will cause the price of every good and service to rise, it is a regressive tax as well. Beyond this it may well prove to be the largest windfall for financial institutions in the history of commerce. And this windfall will be sustainable for decades because governments will continue to reduce the emissions cap yearly, bidding the price of "trade-certificates" up annually. A straight-forward tax on emissions, managed by and payable directly to the IRS would be the least onerous on public and industry because government not financial institutions will manage the program, nonetheless it will have the same regressive tax effect, albeit without the windfall for financial institutions. That is the less damaging of the two taxes as governments will receive all of the tax dollars and maintain more control, but as Mr. Sacks points out lobbyists usually win the cause, not the public, and the global financial lobby is one of the wealthiest and most powerful in the world. Once the US passes its C&T legislation the balance of the G20 will as well. Why, because they all badly need and want the tax revenue it will generate and they have all agreed that Global Warming is the blight benign, from which to get it. Consider that just the first year revenue of US certificates is conservatively estimated to be 1.2 trillion dollars. How does government remove this much expendable income from consumers without causing great economic dysfunction and hardship? The global economy took a painful hit when this occurred due to the speculative run up of oil prices, and then again by the default on unregulated derivatives. And sadly it is about to happen again by C&T or the alternative direct emissions tax. I urge everyone to investigate this topic very carefully before making a decision on its veracity.
Reply | Report Abuse | Link to thisMaybe they should redraft the Constitution to open with the words 'We the lobbyists...'
Reply | Report Abuse | Link to thisTrue - cash for clunkers was an economic program first. However, a study by Edmunds confirms what most economists had been saying about it. Most of the added sales were sales that would have happened anyway - just in a different time period. When correcting for this, they estimate that each additional car sold (which would not have otherwise been sold without the program) costed the taxpayer $24,000.
Reply | Report Abuse | Link to thisSo, congress delivered again. A program bad for the economy, bad for the environment and bad for the taxpayer. A perfect triple play.
Next up: Cap and trade and health care reform. Anyone want to bet on a rational policy coming out of these?
I can't belive I'm going to say this, but I agree with galaxy_man and hotblack. This program was a gong show that was an utter waste of $$$ and did nothing real for the environment.
Reply | Report Abuse | Link to thisThe true cause of global climate change is not greenhouse gas emissions (human or otherwise) but the wobble of the earth's axis over a roughly 26,000 year cycle. A team of international scientists at Lake Vostok in Antarctica discovered from ice core samples that carbon dioxide has risen at least 13 times over a 400,000 year span - for about 21,000 years before dropping again as the earth cools.
Reply | Report Abuse | Link to thisThis cycle (known in ancient times as the Precession of the Equinoxes) was long ago divided into 12 ages (Aquarius beginning on December 21, 2012) and has been called the Great Year or Platonic cycle.
Further to climate change and the earth's wobble, please read this article (originally published in Science),
http://newsroom.melbourne.edu/news/n-119 .
It's very interesting to me that this information has been suppressed or ignored by the mainstream media.
I apologise for those who mistake the Lake Vostok study for the second one published in Science. They are two separate studies (the first was completed 25 years ago).
Reply | Report Abuse | Link to thisPlease note correct URL, there is no period at the end of it.
Reply | Report Abuse | Link to thishttp://newsroom.melbourne.edu/news/n-119
From the University of Melbourne, Australia Newsroom.
Don't be a wobble-denier! Don't be caught red-faced in the Flat Earth Society!!
Reply | Report Abuse | Link to thisI wish we could pass a cash for Clunker Politicians and be done with all those quasi-environmentalist idiots in Washington DC. None of them have the common sense it takes to make wise energy production or management decisions. I'm surprised that they haven't give grants to develop lunar cells to Lunatic Ventures, LLC. But suspect it's coming.
Reply | Report Abuse | Link to thisAcePilot2009,
Reply | Report Abuse | Link to thisFirst of all try to stay on topic. And secondly if you post a link, at least try to read the article first. In no way does your article have anything to do with current global warming. CO2 was not the cause of the glacial and interglacial cycles. Indeed the article does touch on changes in earth's orbit and tilt. This is all well founded in science and has been known for some time. This again in no way touches on the cause of the current warming.
Back on topic.
I agree with others that cash for clunkers was first and foremost a stimulus strategy designed to have the possibility of some environmental impact. With that in mind the outcomes are not too surprising.
Big gas reductions can be easily achieved by limiting speed to 50mph.
Reply | Report Abuse | Link to thisThis gives the added advantage that serious road accidents causing death and serious injury are greatly reduced, whose financial cost to the country is enormous.
Enforcing car sharing in urban areas by limiting 'driving days' to each owner divides gas consumption by four...
I found the arguments given by Jeffrey Sach a little deceptive. The arguments seem appropriately quantitative because he does a careful analysis of the Cash for Clunkers benefits. However, his figures for the other side of the argument are quite weak. No real justification is given for the value of $60/ton for the "other options" he is opposing. Is it really a valid comparison, a carefully-calculated argument on the one side, versus some vague quantities for the other side?
Reply | Report Abuse | Link to thisSecondly, Sachss own analytical figures are by no means exact, although they are couched in such terms as to appear precise. As has been pointed out in a previous post, why assume $2.00 for the price of gas? Why not $3.00, or $4.00? What about the savings in maintenence costs? Are there no energy costs for a constant stream of replacement parts and repair-shop visits for the old vehicles? What about the benefits accrued from stimulating the economy? Finally, what about the added value of the new car to its owner?
Also, is money really a useful measure of the cost of a carbon reduction program. After all it doesn't create much CO2 when you sell a government bond, yet the CO2 reductions are real. If the alternative to cash for clunkers was doing nothing, we still end up with less CO2 in the air.
That being said, if you really want to be serious about reducing carbon emmisions then increase the GAS TAX.