On June 24th, President Obama signed into law the Supplemental Appropriations Act of 2009. A part of this appropriations act is the “Consumer Assistance to Recycle and Save Act of 2009″ or Cash for Clunkers as it is better known.
Prior to the passage of the act, I gave brief interview with Fox News on behalf of the New Jersey Environmental Lobby (I am their governmental affairs agent). The piece aired after the passage of bill and can be seen here. In a portion of the interview that did not air, I indicated that the House version of the bill was not an environmental bill and was not going to do much for the environment. The clip of me from the piece was in reference to the Senate version of the bill sponsored by Sen. Feinstein and Collins.
The Cash for Clunkers law defines a clunker as any car that gets 18 mpg and under. This definition is ok and not the problem. The real problem lies in the Act’s definition of fuel efficient vehicles. The act defines a fuel efficient car as almost any car that gets at least 22 mpg. This is 3 miles per gallon less than the actual average mpg of our fleet and 5.5 mpg less than what current regulations require. There are two tiers of vouchers. A person can get a $3,500 voucher is their new fuel efficient car is at least 4 mpg greater than what they trade-in (as long as it is at least 22 mpg.) A person can receive a $4,500 voucher if their new fuel efficient car is at least 10 mpg greater than the trade-in. Therefore, a person can trade in their 18 mpg gallon car for a 22 mpg call and get a $3,500 voucher. Also someone could trade in their 12 mpg car for a 22 mile per gallon car and get a $4,500 voucher. In contrast the Senate bill would provide vouchers for vehicles that got at least 25% than the current CAFE standard required.
I have a very hard time calling a car that gets less than the current fleet wide average and even less than what the law requires fuel efficient. I also have a very hard time justifying paying a voucher for such a program on environmental grounds. It would appear that the sponsors of the Senate version agree. While it may or may not be good for the economy and the auto industry, the Cash for Clunkers will not make any major improvements in the environment. As an environmental law, Cash for Clunkers is a clunker.