I just read a story this morning suggesting that the “Cash for Clunkers” program is expected to reduce carbon dioxide emissions by only a trivial amount:
While the focus of the story is that this won’t do much for climate change, this is the piece that attracted my interest:
America will be using nearly 72 million fewer gallons of gasoline a year because of the program, based on the first quarter-million vehicles replaced. U.S. drivers go through that amount of gas every 4 1/2 hours, according to the Department of Energy.
In the context of the amount of gasoline we use – 140 billion or so gallons per year (a bit less now because of the recession) – this amounts to only 0.05% of our annual gas usage. Experts have suggested that making sure tires are properly inflated could save 3% on gas usage, or 60 times the amount saved by “Cash for Clunkers” if the majority of people are driving around on under-inflated tires.
So, for $1 billion invested in the program, a savings of 72 million gallons means we taxpayers paid $13.89 for each gallon of gasoline/yr saved. Readers know that I am a big fan of much higher fuel efficiency, but $13.89 to save a gallon of gasoline per year? While this benefit will be spread over several years of gasoline savings, surely we can do better than this.
Even if – as one reader suggested – those cars would have been on the road for another 10 years, you are still paying over a buck a gallon for the savings. No doubt that stimulus funds can stimulate in the short term, but what happens when the tax bill comes due? Will we look back on that as a wise use of those funds?