Is Cash for Clunkers a Clunker of a Concept?

Those formulating the U.S. cap-and-trade climate bill appear to have converged this week on a â''cash for clunkerâ'' formula: those driving cars or trucks that get 18 miles to the gallon or less will be entitled to trade them in for more fuel-efficient vehicles, entitling them to a cash voucher of up to $4,500, depending on how much better the new vehicle is. Taking into account the elementary fact that it takes a lot of energy to make a new car, does the formula make sense? IEEE Spectrumâ''s automotive editor John Voelcker addresses the question critically in a recent blog post.

Voelcker takes his cues from researchers at Duke University who developed a concept called GPM: the notion that a vehicle has to save at least 1 gallon of gasoline every 100 miles in 70,000 miles of driving to balance the energy consumed in its manufacture. Translated into the more familiar miles-per-gallon, the team at The MPG Illusion calculates that a vehicle getting 18 mpg would have to be replaced with one getting 22 mpg to make up for manufacturing energy, and a 25-mpg vehicle would have to be replaced by one getting 33 mpg.

Seen from that perspective, the Hill compromise looks pretty good for cars and small light trucks, but less sound for large light trucks. As described in The Wall Street Journal, the highest incentive of $4,500 will be granted only if a new car gets at least 10 mpg more than the old one and a new truck at least 5 mpg more.


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