Study: Clunkers Programs Should Use Fuel Economy, Not Age for GHG Reductions
By Scott Doggett September 22, 2009
From the isn't-it-obvious file: A university study has concluded that a cash-for-clunkers program ought to use fuel economy rather than vehicle age in determining a car or truck's eligibility for the scrappage program if its goal is reduced greenhouse-gas emissions.
Well, duh. Your Green Car Advisor has said that on a number of occasions, including a posting way back in June.
But the study conducted by the University of California at Davis, which is home to a highly respected electric-vehicle research program, contains findings that will surprise many well-informed people.
For instance, the study concluded that because the greenhouse-gas emissions associated with vehicle manufacturing, materials production, and scrapping equal roughly 10 to 15 percent of a vehicle's lifecycle emissions, any program that seeks to reduce GHG emissions through scrappage should seek to save more GHG emissions than this amount.
The study also found that the majority of cash-for-clunkers programs -- there have been many worldwide over the past 30 years -- last on the order of months rather than years, attempting to quickly and efficiently remove a set of target vehicles. For example, the recently ended U.S. program was originally scheduled to end after four months or after $1 billion funding was spent, whichever came first.
The short timeline prompted vehicle owners to act so quickly that the funding was spent after four days. However, the study's authors concluded, a long-term scrappage program may be more suitable to GHG reductions because with such a program policymakers could "send a clear, long-term signal" to automakers to produce more fuel-efficient vehicles.
The study recommends that policymakers, when proposing a clunkers program, consider 4- to 6-year vehicle product planning, design and introduction cycles where major retooling of
automobile plants is needed.
"Such longer-term programs could actually induce technology changes," the study found.
The study also determined that the incentive in a scrappage program with a GHG mitigation objective should be directly linked to the expected amount of carbon-dioxide equivalent mitigated.
The recent U.S. clunkers program failed to properly align its incentive because it rewarded participants for their increase in miles-per-gallon, not total gallons saved, the study found.
A simple calculation illustrates this point. For a constant 10,000 miles per year traveled, a participant in the U.S. program could have upgraded from a 13-MPG passenger car to a 22- MPG passenger car and save 315 gallons of gasoline per year, whereas another participant could upgrade from a 18-MPG vehicle to a 28-MPG vehicle but only save 198 gallons.
Even though the first participant saves almost 60 percent more gasoline per year than the second, he or she received a smaller rebate ($3,500 instead of $4,500) because the fuel economy improvement was less than 10 MPG, the study showed.
Furthermore, the study concluded that ideally an incentive will only be offered if a vehicle has a certain number of years or miles remaining. The study's authors found that when vehicle owners make this estimate, they tend to overestimate the remaining years useful life.
A mechanic could provide a more accurate assessment, the authors said. They noted that California's South Coast Air Quality District's vehicle scrappage program uses pre-
certified mechanics to ensure its 3-year life remaining requirement is met. Since 1997, the
program has an 18 percent rejection rate of vehicles based on not meeting the 3-year requirement.
Of course, this additional step of using a mechanic to determine the number of miles a vehicle has remaining before maintaining the vehicle becomes unreasonable adds to the total program cost.
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