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Cash for Clunkers...Not? With over 22,782 vehicles already purchased via the CARS program by Wenesday and a total of $96 million had been spent already, there is cause for worry. The new program, it was hoped, would get some older and less efficient cars and trucks off the road and at the same time boost auto sales. With sales down 35%, the auto makers needed something to stimulate sales, but I guess $1 billion dollars just wasn't enough.
With the “Cash For Clunkers” or Car Allowance Rebate System (CARS) already making an impact on new automobile sales – Hyundai, who jumped the gun and began offering the program early reported close to a 10% increase in vehicles sold as a result – it is no surprise that many critics are latching on to the more controversial aspects of the program.
Signed into law by the Obama administration in a purported effort to convince Americans to switch to more fuel efficient cars and reduce the impact of driving on the environment, upon closer examination it appears as though the green aspects of the program are fairly weak. For example, participants are only required to demonstrate a 4 mile per gallon fuel economy increase over their old vehicle, as long as the new automobile gets at least 22 miles per gallon combined, in order to qualify for the minimum rebate. This is seen by both environmentalists and industry watchers as a largely insignificant increase in fuel mileage, certainly not capable of producing any dramatic results in terms of reducing America’s dependence upon fossil fuels. The rules for trucks are even more lax, with a minimum of a 1 mile per gallon increase qualifying for the first tier of CARS rebates.
There is also the dubious green practice of encouraging consumption. The reality is that it takes a significant amount of energy to build a new car, a process which generates large amounts of the greenhouse gases and other pollutants that the CARS program is ostensibly attempting to reduce. By encouraging drivers to trade in their older cars which have long ago paid back their carbon debt through years of usage on newly minted machines that have tens of thousands of miles to go before they can boast the same, the incentives aren't exactly embracing the fundamental message of the environmental movement. Reduce, reuse and recycle would appear to be forgotten, although the final two “R's" in the time honored slogan will at least be honored when the vehicles taken in under the program are sold for scrap metal that is then used to build new vehicles and other items.
If the Cash For Clunkers program will have any truly lasting impact on the American auto industry it will be to shake car and truck sales out of the cardiac arrest that it has found itself in for the past year. While this economic stimulus is indeed admirable, couching it in the language of environmental politics is certain to leave a bad taste in the mouths of many.
This article was trying to explain what the Cash for Clunkers program was trying to accomplish. Of course, amid rumors of the program's suspension, Congress will have to review the results of this short lived attempt to boost auto sales. GM and some members of Congress would like to see the government come up with more money to keep the program going.