The federal Cash for Clunkers program has come to an end, and its administrators are calling it a “success” for its ability to take polluting cars off the road and stimulate the U.S. auto industry. However, a transportation economist at UC Davis says it was an expensive way to reduce carbon emissions.
Christopher Knittel found that Cash for Clunkers is paying 10 times more per ton to decrease carbon emissions as it would under a cap-and-trade system.
Carbon credits are expected to sell for about $28 per ton in the United States, while the cost of the clunkers rebate is—under the best-case scenario—$237 per ton, said Knittel in his analysis, “The Implied Cost of Carbon Dioxide Under the Cash for Clunkers Program.”
“In the end, the lowest cost to remove one ton of carbon from the environment was $237,” said Knittel in a UC Davis news service article. “More likely scenarios produced a cost of more than $500 per ton, even when we accounted for reductions in pollutants other than greenhouse gases. That suggests the Cash for Clunkers program is an expensive way to reduce carbon.”
Knittel didn’t analyze the Clunker program’s ability to stimulate the economy.