Saturday, August 1

C.A.R.S. will hurt the environment

Somehow national environmental organizations like the Sierra Club had the wool pulled over their eyes with the federal Consumer Assistance to Recycle and Save Act (C.A.R.S.) They were sold an outright transfer of wealth from the federal government to a particular sector of the transportation industry believing that it would somehow help the environment - the whole "cash for clunkers" deal. Now, faced with weaker than expected fuel-efficiency standards, they are hoping that participants will "do the right thing" by buying a more fuel-efficient vehicle than required. But they can do that without the subsidy.

It's now becoming clear that this program, while reducing per vehicle gas consumption by a minimal amount, is likely to net increase the national total carbon emissions output for a number of reasons:

1. There will be more cars on the road. This is because of a reduced attrition rate. The whole idea of a one-for-one trade is a sleight of hand. The average car is in circulation for about 10 years, and only vehicles 8 years old or more are eligible for trade-in under the C.A.R.S program. This means that many vehicles soon to be taken out of circulation anyway are being replaced by cars that will be in circulation for 10 more years. Clearly, the aggregate of all vehicles on the roads for the next few years will be increased (or reduced less) on account of this program, off-setting the fact that the individual vehicles are slightly more fuel-efficient.

2. Shifts in driving behavior compensate for fuel efficiency gains. This was one of the lessons learned from the adjustments to CAFE standards. If a household has a fixed amount of money to be used for purchasing fuel, they will simply drive a more fuel-efficient vehicle more to spend the same amount of money. It's not exactly that simple, but that's the general idea. They are also more likely to purchase a light truck or its equivalent, which is in a separate fuel economy class. Taxing use is the way around this problem.

3. Manufacturing new cars adds more embodied energy. C.A.R.S only allows the purchase of new cars, not the reuse of older ones. Somewhere between fifteen and twenty-two percent of all the energy ever consumed by a vehicle is used in its manufacture and initial transport. According to a Scientific American calculation, in most cases destroying a perfectly good vehicle and creating a new one that is slightly more fuel efficient emits more carbon than just keeping the old one longer. Demolition can be energy-intensive as well.

4. Alternative modes of transportation will be discouraged. In an earlier Cash-for-Clunkers proposition from Dianne Feinstein, participants would be able to cash in their old cars to use transit, but this was pulled out of the bill in the last week apparently because it would not help the automobile industry enough. At least a few people who would otherwise switch to transit, walking, or bicycling, all modes of transportation that are usually more energy-efficient than driving, may be enticed to continue driving with a $3500 - $4500 incentive. Any infusion of cash into one mode of transportation without a balancing support for another mode is highly likely to weigh the balance of use in its favor.

5. The opportunity cost of $3 Billion means good programs are not happening. The $2 Billion that was authorized yesterday by Congress for the extension of C.A.R.S is being taken from money allocated in last year's stimulus bill for renewable energy programs. By instituting the C.A.R.S program, the federal government is opting to not institute programs that may actually reduce carbon output.

6. There is no possibility for the reuse of automobile parts. The C.A.R.S program requires not only the destruction of the engine (the source of the emissions) but of the destruction of the entire trade-in vehicle. The purpose apparently is to prevent the reuse of materials, which would hurt the automobile industry by increasing the supply of used cars and slowing the attrition rate of old vehicles. Yet the reuse of older parts is an important method for not only reducing the waste stream in general, but reducing the need to manufacture new materials.

7. More infrastructure will need to be in place. A calculation of the carbon emitted by the entire automotive system needs to account for not only tailpipe emissions and manufacturing of vehicles, but also future infrastructure needs and impacts on land use. Subsidizing the automobile industry (disproportionate to other forms of transportation) is likely to increase outward low-density growth (or lessen its reduction) and the consequent need to widen and extend roadways. The Highway Trust Fund has already needed two bailouts.

8. There is a moral hazard of rewarding poor prior choices. People who opted to buy more fuel-efficient vehicles earlier for whatever reason are not rewarded, and people who bought S.U.Vs and other large vehicles earlier are rewarded in the C.A.R.S program. This may decrease future incentives to make the environmentally beneficial choices without being paid to do so.


Gene Koo said...

I agree with your second point: if we want to incentivize more fuel-efficiency, and do so without distorting the market and creating new bureaucracies, the best way to do so is through a gas tax.

LH said...

Daniel, well said. Yet another instance of well-meaning government policy with obvious unintended consequences.

epar said...

The idea that what's good for the auto industry is good for the country is too deeply ingrained into our national attitude. Until we break that mindset and view automobiles as just a means to and end, rather than the embodiment of the American spirit or some such crap, it will be impossible to have balanced policies concerning our cities and transportation infrastructure.