Why It’s Helpful to Move Past “Cash for Clunkers” Type Thinking on Automobiles
This was shared with a Senator (via Legislative aides) during the ‘cash for clunkers’ debate and bill presage last summer. It is posted here unedited, for reference, and because the analysis is increasingly relevant today.(A similar letter/analysis which complements it is here.)
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The claimed greenhouse gas and oil savings of S 1200 over the bill that passed, fully appropriated, represents .00746% of our net greenhouse gas emissions, and .035% of our total passenger vehicle oil use, based upon ‘06 figures. (Even less if we base it upon gross emissions of about a billion tonnes more.)
As transportation is responsible for around 68% of our oil use — with passenger vehicles responsible for around 61% of this (heavy trucks another 21% or so) — addressing oil reliance means addressing super high efficiency and alternative fuel vehicle transitioning. Similarly, vehicles are responsible for about a fifth of our CO2 emissions (17% give or take of total greenhouse emissions in CO2e) and play a rapidly increasing global role, particularly in India and China where, to have any diplomatic credibility on the issue, we have to become a leader on it.
This issue thus is ongoing. (And likely will come up in specific cash for clunker form in just a few months when the current 1 billion appropriation runs out.) Given vehicles’ overwhelming role in oil use, the best way toward meaningful progress on this is to frame the critical national security aspects. This will provide a means for powerfully reaching across the aisle — and, more importantly, getting most Americans on board, since almost all of us want to address climate change, stop importation from the Mid East, or both. National security, and its appeal to precisely the key climate change opponents that are critical to getting on your side, has been vastly under-emphasized, and underutilized.
I can not emphasize this enough. Some Democrats may or may not think oil reliance is a big deal. But what is necessary to consider is that many people in America do, inside of Congress and out. And often these are the same who may otherwise not be as open to climate change address — and sometimes even fight against it because of misperceived macroeconomic harm. And it’s certainly not a bad thing to get off of foreign oil. In fact, it’s smart. Now we have a means with one policy to solve everybody’s problem, and all get on the same page. That is, with respect to the vehicles we drive, the essence of it comes down to what most of us want — using far less oil.
It’s counter productive at this stage for us to be subsidizing the purchase of any new vehicles that don’t make significant steps toward oil and CO2 (and N2O) eradication, and which does not have the effect of further prompting the market in this direction. After the current minimal program funding expires, and we have tried to bolster sales, it will be more appealing to make the argument that it is time to support the growth of our economy in the direction of those productive capabilities that solve the increasing challenges we are facing — herein being national security compromising oil reliance and CO2 emissions — rather than continue to contribute as a root cause to them.
The key is promulgating the availability and development of vehicles that meet this goal. for example, Ford’s Fiesta ECOnetic gets 65 mpg. Replace an 18 mpg vehicle with a 65 mpg one, and over 12000 miles we will save 482 gallons of gas, and 9352 lbs. of CO2, for that one vehicle alone. This is the same as driving a vehicle that gets 35.5 mpg (2016 yr CAFE ave.), for 17,110 miles, using clean air as its fuel, and emitting nothing but clean air. As told to Business Week, however, there are no current plans to bring it to the U.S. because of no perceived demand, mainly because there is no market mechanism to price in the vast external costs of gasoline. (In pure economic terms, this amounts to an enormous gasoline subsidy.)
GM’s Chevrolet Volt gets a claimed 150+ mpg equivalent its first 40 miles after charge. (This is a sketchy figure in an inordinately complex and imprecise subject area, but the car under the right circumstances can achieve this equivalent, and much higher.) The 40 mile range is enough to cover most routine commutes and trips. It gets a more constant 48-50 mpg when running via gasoline generator thereafter.
The car’s emissions savings are harder to precisely calculate because of measurements in mpg equivalents and variability in how much it is driven above the 40 mile between charge cutoff. More important even, is the issue of electricity generation fuel source variability, and nighttime charging potential when power plants tend to otherwise overproduce. Thus,the vehicle can potentially use some fossil fuel produced electricity with minimal net CO2 emissions when plants, to keep from powering down (which is inefficient and so avoided), overproduce at night. Obviously, excess wind or hydro capability at night in certain regions would be the ideal, and amount to zero net emissions. In sum, the CO2 emissions improvement of the Volt should easily exceed that even of the ECOnetic, and can continue to improve as we move forward and provide viable energy alternatives.
If the average Volt runs one quarter of the time on gasoline (a fairly conservative estimate), The Volt would not only potentially have an exceptional per vehicle net emissions impact, but an extraordinary per vehicle oil impact. That is, eight Volts would likely use around the same oil, or less, in total than one 24 mpg vehicle. (And ten Volts would likely use around the same oil as one 20 mpg pick up truck or SUV.)
There are plenty of other “right direction” cars available or in production now — such as the stylish 62 mpg five seater Volkswagen BlueMotion Polo, the 70+ mpg four seat Peugeot HDi 308, the 65 mpg 3 + 1 Toyota iQ, the ostensibly 150-200+ mpg equivalent (hard to say though) Mitsubishi i-MiEV, the Volkswagen Up, the less appealing California based Coda (which is really a re tooled, China produced, Hafei), and the more expensive Tesla S, among others. But it is helpful to focus foremost on American vehicles when framing this, and also to stress the fact that most cars represent a composite of (international) inputs anyway. What is also key to remember, and properly frame, is that this is what the market has started to produce, without the proper incentives. [The market can, and will, do far better with the proper incentives. ]
The key consideration is not just to promote the movement toward purchase of these vehicles, but market development and emphasis in this direction. Throwing money at it or giving companies funds to “do this” can be semi wasteful, because while consumer preference can shift based upon manufacturer development, consumer choice is still the driving factor. More importantly, these same manufacturers, as history has shown us time and time again, while developing these “technologies” thus subsidized, will still market and aggressively push what they think consumers want.
Thus the bottom line is to develop policies that inspire the market itself to achieve this, which means both the supply and demand side of the equation. A high gasoline tax, with the revenue to be used as offsetting stimulus and low income, inelastic gasoline demand curve consumer hardship amelioration, would be most effective — but is politically unpalatable. (It is also seen as potentially inflationary, although that could be offset as well.) A Clunker subsidization program, that targets specifically the types of vehicles outlined above, would accomplish this also, and generate substantial economic growth all at the same time. And, properly framed, it can be sold across the aisle, and certainly to most of America, who when they get the bottom line numbers, want us to do this; oftentimes, overwhelmingly so.