It's now fairly widely understood that Cash for Clunkers has worked great as a stimulus program but is negligible as an emissions-reduction program. That's fine -- it did what it was supposed to do. Now that we know how well people respond to cash incentives, though, it's time to do some deeper thinking about how to drive a large-scale shift to more fuel efficient vehicles.
Conservatives are always complaining about CAFE standards that they force automakers to make more fuel efficient cars, but don't give consumers any incentive to buy them. That's a valid complaint. The usual response is to propose raising the gas tax, which, as I've mentioned before, drives me crazy. This is the solution people come up with when they are besotted with economics and utterly ignorant of politics. Let's put voters -- particularly low-income voters -- in financial pain, thereby forcing them to buy different kinds of cars, whenever they can afford to do that, which could be a long time, particularly with their budgets being destroyed by high gas prices. A political policy that yields pure pain, for every single voter that drives. Lemme see a politician sell that.
A much, much better idea is an oldie but goodie: feebates. Under this program, consumers who buy vehicles that exceed CAFE standards are given a lump-sum subsidy. Yes: cash in pocket! The dealer puts it right in your hot little hands. These subsidies are paid for by a fee on consumers who purchase vehicles that fall short of CAFE standards.
Purely as policy, it has some shortcomings. It doesn't penalize driving -- we'd prefer someone buy an SUV and park it most of the time than buy a hatchback and drive it every day. But that shortcoming can easily be remedied by pairing feebates with higher gas taxes. As a political matter, though, lead with the policy that's easier to understand and offers tangible benefits!
All of which is prelude to noting the excellent news that Sens. Jeff Bingaman (D-NM), Olympia Snowe (R-ME), Richard Lugar (R-IN), and John Kerry (D-MA) have introduced a bipartisan feebate bill: the Efficient Vehicle Leadership Act of 2009 (S.1620).
The Efficient Vehicle Leadership Act creates a program that rewards consumers who buy cars and trucks that get better gas mileage than the average overall fuel economy required for its class. Motorists who buy models which exceed that CAFE standard will receive a “fuel performance rebate” (claimed on their tax return or paid instantly by the dealer, whichever the buyer prefers), an amount tied to the fuel savings over and above the relevant CAFE standard. The savings can range from several hundred to several thousand dollars, depending on the vehicle’s fuel economy relative to other models of the same size. Conversely, for inefficient, gas-gulping vehicles, manufacturers will be assessed a fuel performance fee to pay for the program.
If we've learned anything from Cash for Clunkers, it's that direct, tangible incentives like this drive behavior -- much more and faster than what economic projections indicate.
We've used those incentives for economic stimulus. Now we should put them to work increasing the fuel efficiency of the whole fleet.
Follow David Roberts on Twitter: www.twitter.com/drgrist
BTW, the gas tax isn't intended simply to make people buy more efficient cars; it's to make them drive less. (Car pools can make a big difference.) It may drive David Roberts crazy, but it's still necessary.
Otherwise,... it's just another case where I get to subsidize everybody else that previously made bad decisions as regards auto fuel efficiency.
http://www.AutoStimulusPlan.org
Also,
You didn't address some of the issues and solutions, such as these described in an article by Meteor Blades:
(1) longer-term incentives: a 2-, 3-, or 5-year program, instead of this short-term unsustainable stimulus;
(2) reduce the person-to-car ratio;
(3) a plan to reshape living space and working space into one place;
(4) a sliding-scale subsidy based on how much fuel the new vehicle consumes, starting with a floor of at least 30 mpg;
(5) money for CARS program not being taken from renewable energy project money;
(6) not destroying clunkers that can be used as substitutes for even worse gas-guzzling clunkers for lower-income citizens.
70 percent of errands run in france are made in transportation other than automobiles in the United States 20percent.
The average mpg in Europe is 31mpg in the us 18mpg we burn 367 million gallons a day.
The Clunker program saves 0.000597215483 percent in fuel per year.
Which program works the best to save fuel consumption?
Face Facts America needs a new way of doing business, running an economy on fuel produced outside of our borders leaves us vulnerable.
We have to wean Americans away from their beloved auto reorganize our society away from a motoring society that must drive to do our errands we must radically rethink living close and using public transportation. It is fun social, green and will cut emissions dramatically. With this mind shift of course will also be a shift toward a more sustainable economic model away from the 70% consumer drivne economy and back to a manufacturing base.
Happily however, the continued decline in the economy accompanied by high unemployment may present a solution I'm seeing more frequently, i.e. the obese leaving the trucks at the house in favor of the motorcycle.
it is unsustainable. folks cannot walk or bike let alone take public transit anywhere.
The landscape and the built environment do not support a healthy lifestyle or a sustainable transportation society.
Feebates are the stupidest program ever well clunkers tops the list. Economic solutions conceived by mental midgets.