As we noted on Friday Senate Minority Leader Chuck Schumer wants to stimulate the sale of electric cars by using a scrapping scheme in the form of Cash For Clunkers. This is a well-meaning plan and the goal of increasing the adoption of EV is a good one. It just ignores a serious problem: Cash For Clunkers sucked.
The core problem with the program – and the like in other countries – is that environmental groups, experts and car enthusiasts generally agree that it is more environmentally friendly to keep an old car running. than scraping it and getting a new one. This is true even if the new one is significantly more efficient. The environmental costs of new car production are serious, although they look clean and slim.
That is also true on the reverse, where crushing a car tends to be a terrible use of resources . Cash for Clunkers demanded that cars traded in be crushed, meaning that useful pieces could not be recovered. Instead, they ended up covered in oil and antifreeze and dumped in a garbage dump. Whether you look at it from the lens of an enthusiast or an environmentalist, it blows.
Plus you had a lot of unwanted market effects. The cheapest driving vehicles out there were scrapped the most since the incentive structure of the program set a minimum value for each vehicle. That meant it was much more difficult for people with lower incomes to find affordable transportation as these cars had been scrapped. And since the program required you to buy a new car, people who had turned off old cars but couldn't afford a new one were left out.
Instead, they found it more difficult to get reliable transportation after Cash For Clunkers because a bunch of perfectly usable cars and even some cool rare cars had been scrapped. So even if $ 454 billion already sounds like a lot of money for an EV transition period, keep in mind that the real cost will be higher when you contribute to increased used car prices for people who can't afford EVs or have lifestyles that EVs do not want. t fit.
Finally, I would argue that this is a program designed more to look environmentally friendly than being environmentally friendly. In addition to the aforementioned well-known environmental costs of scrapping schemes, you must acknowledge that these programs focus entirely on the sale of new cars, and justify that by saying that the transportation sector accounts for 1/3 of US carbon emissions.
Reducing it is important, but this strikes me as another example of promoting consumer-level incentives over large-scale pollution control. 29 percent of greenhouse gas emissions produced by the "transport sector" not only cover new cars, but that is always the target. It covers cars, trucks, boats and flights.
And it seems intentional that almost nowhere will break out the number of cars compared to the rest, since freight and transport are notoriously dirty. Globally, we know that flights account for 2.5 per cent of emissions, while the transport sector emits 15 per cent of all carbon, but EPA does not appear to offer broken figures.
It makes it easier to push policies that focus primarily on the consumer side, as they can be blamed for action and do not have strong, connected advocates such as lobbyists for the shipping or aviation industries. Sure, the auto industry has lobbyists too, but that's probably why Schumer's plan encourages new car sales and includes incentives for car companies to develop new cars.
To summarize, rather than regulate, these programs tax consumers and use the money to pay manufacturers to develop cars they were already developing, while incentivizing people to destroy perfectly good cars.