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US government's 'Cash for Clunkers' program expensive way to reduce CO2

Washington, August 15 : New estimates by researchers at University of California (UC) Davis have indicated that the US government's 'Cash for Clunkers' program is paying at least 10 times the 'sticker price' to reduce emissions of the greenhouse gas carbon dioxide (CO2).

While carbon credits are projected to sell in the US for about 28 dollars per ton, even the best-case calculation of the cost of the clunkers rebate is 237 dollars per ton, according to UC Davis transportation economist Christopher Knittel.

'When burned, a gallon of gasoline creates roughly 20 pounds of carbon dioxide. I combined that known value with an average rebate of 4,200 dollars and a range of assumptions about the fuel economy of the new vehicles purchased and how long the clunkers would have been on the road if not for the program,' Knittel said.

'I even assumed drivers didn't change their habits, although some analysts have suggested that the owners of new vehicles will drive more than they would have with their old cars,' he added.

'In the end, the lowest cost to remove one ton of carbon from the environment was 237 dollars. More likely scenarios produced a cost of more than 500 dollars per ton, even when we accounted for reductions in pollutants other than greenhouse gases,' he explained.

'That suggests the Cash for Clunkers program is an expensive way to reduce carbon,' he concluded.