In a classic tale illustrating the “law of unintended consequences,” a new report concludes that President Barack Obama’s $3 billion “Cash for Clunkers” taxpayer-funded boondoggle artificially drove car prices up, not down, and unleashed an “environmental nightmare” through shredding, not recycling, many of the 690,000 cars people traded in for an up to $4,500 car credit.
In 2009, Mr. Obama proudly declared that his Cash for Clunkers program, officially known as the Car Allowance Rebate System (CARS), was a stunning success. “There were skeptics who weren’t sure that this ‘Cash for Clunkers’ program would work,” said Mr. Obama. “But I’m happy to report that it has succeeded well beyond our expectations and all expectations, and we’re already seeing a dramatic increase in showroom traffic at local car dealers… So I’m very pleased with the progress that’s been made in the House today on the “Cash for Clunkers” program.”
But as Yahoo News notes, the program’s decision to shred, not recycle, many of the trade-in vehicles unleashed an “environmental nightmare”:
Shredding vehicles results in its own environmental nightmare. For each ton of metal produced by a shredding facility, roughly 500 pounds of “shredding residue” is also produced, which includes polyurethane foams, metal oxides, glass and dirt. All totaled, about 4.5 million tons of that residue is already produced on average every year. Where does it go? Right into a landfill.
E Magazine states recycling just the plastic and metal alone from the CARS scraps would have saved 24 million barrels of oil. While some of the “Clunkers” were truly old, many of the almost 700,000 cars were still in perfectly good condition. In fact, many that qualified for the program were relatively “young,” with fuel efficiencies that rivaled newer cars.
A study conducted by Resources for the Future further underscored the program’s failure economically and environmentally:
Approximately 45 percent of the spending went to consumers who would have purchased a new vehicle anyway. Our results suggest no gain in sales beyond 2009 and hence no meaningful stimulus to the economy. In addition, the program will reduce CO2 emissions by only 9 to 28.4 million tons, implying a cost per ton ranging from $91 to $288 even after accounting for reduced criteria pollutants.
And E – The Environmental Magazine says the Department of Transportation’s declaration that Cash for Clunkers was a success is simply a case of smoke and mirrors:
The Department of Transportation reported that Cash for Clunkers was an environmental success… In general, drivers traded in inefficient SUVs and trucks for more efficient passenger cars. However, it’s quite easy to negate this small difference in gas mileage purely by the fact that people will be more likely to drive a vehicle that takes less money to fill up with gas. It’s an efficiency paradox: as we get more efficient at using energy, the overall cost of energy goes down, but we respond by using more of it. Auto emissions of carbon dioxide are directly proportional to gasoline consumed. With only 690,000 fuel-efficient vehicles purchased and over 250 million cars registered in the U.S., that is a negligible difference in overall greenhouse gas emissions.
As the Washington Post even conceded, Mr. Obama’s Cash for Clunkers scheme was an economic and environmental failure: “So were the naysayers right?” asked the Post. “It seems so.”