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60-Second Earth

Cash for Clunkers

Is the government's new plan to pay people to trade in old, inefficient cars and trucks an environmental bane or boon? David Biello reports

[Below is the original script. Some changes may have been made during the recording of this audio podcast.]

Cash for clunkers sounds like a good idea. Give people cash to upgrade their old cars for more efficient vehicles. Beyond helping the environment, it might also help Detroit's bottom line more than bailouts.

But how does it work in practice?

Germany is a good example. They've had a "wreck rebate" as they call it, since February. The government pays more than $3,000 to people who scrap at least nine-year old cars in favor of a newer vehicle—and there's little doubt that today's cars are more fuel efficient than yesteryears. The program could ultimately cost more than $6 billion.

Here’s the problem: in the U.S. we'll be giving as much as $4,500 to people to consign their clunkers to the scrapyard and then replacing them with vehicles that aren't that much better. Sure we’ll save on fuel and greenhouse gas emissions, going from cars that give us less than 18 miles-per-gallon to cars that can do more than 22 miles-per-gallon.

But the production of a new car is a pretty emissions-intensive process. So to make this program environmentally sound, the fuel efficiency bump between the old and new vehicle has to be sufficiently big enough to justify its manufacture. And that's not the case with the program as it stands now. And that means this program's a clunker.

—David Biello

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