Clean Green Cars: STUDY: Cash For Clunkers not exactly a bargain, emissions reduction costs 10x more than carbon credits

STUDY: Cash For Clunkers not exactly a bargain, emissions reduction costs 10x more than carbon credits

Filed under: MPG, Legislation and Policy, Green Daily, USA

The Cash For Clunkers (C.A.R.S.) program has been a big success. No question there. But one of the stated reasons for the program is to reduce emissions. Getting low-mpg vehicles off the road in favor of ones that are more fuel efficient is a good idea, but a new report by UC Davis says that the cost to reduce CO₂ via C.A.R.S. is about ten times as high as it would be to lower them using carbon credits. The university calculated that a credit for a ton of CO₂ in the U.S. would cost about $28/ton (in Europe, the price is closer to $20/ton), whereas the “best-case calculation” of the cost of the clunkers rebate is $237 per ton of CO₂. The “more likely” scenario puts the cost to eliminate a ton of CO₂ using C.A.R.S. was over $500. UC Davis transportation economist Christopher Knittel, who authored the study, said he didn’t factor in any of C.A.R.S.’s economic benefits; it just tried to calculate the cost of the CO₂. You can download his paper, titled “The Implied Cost of Carbon Dioxide Under the Cash for Clunkers Program,” here (PDF).