Government's Cash for Clunkers

I posted an idea I had for helping to jump start the auto industry and help the environment last November. I sent a copy off to my congressmen and one to the President where I'm sure they all said,

"Oh...here's a note from Al. We must stop what we're doing and consider it."

Or it got filed in the crackpot folder. Or possibly just deleted. I was OK with that as I knew it was a little radical. I was just trying to think outside the box a little. My idea: I suggested the government buy up all the old cars over a ten year period. Pay better than Blue Book with the condition that the money was used to buy a newer, greener car.

So, yesterday I see this article about the Car Allowance Rebate. Under this plan consumers can get a rebate off the cost of a new car if they trade in their old gas guzzler for a more gas efficient vehicle. The official website for the Car Allowance Rebate System says the dealers must scrap the cars that are traded in. Not quite as radical as my idea, but still a good start.

So, today in my little fantasy land I refer to as "Al World", I am thinking that some aide to some government aide glanced at my email and at some pre-meeting brainstorming it got shuffled onto a long list of ideas that eventually ended up on the long list of stimulus ideas. So, if this saves the auto industry, I will be taking credit at all family gatherings from now on. A big bronze medal would have been nice, but I'll be happy with a cleaner environment. And saving the planet.

I'm humble that way!

[Image captured from

Car Efficiency and an Old Man's Buggy Memories

In 1978 I had a 1970 VW Beetle with 1972 engine. It was abysmally cold in the winter. It shook like a washing machine on spin cycle whenever I hit speeds of 70mph or higher. It really wasn't too great if I had more than one passenger as the back seat was pretty uncomfortable. It moved like a snail up steep roads.

I miss that car. It got twenty five to thirty miles to the gallon. When it broke down, I was able to fix it using a simple how-to manual and a small set of tools. It handled great in the snow and during some of the worst snow storms in Colorado, I was able to get out on snowy roads along with the jeeps and other four wheel drives to gather needed hot cocoa and other supplies. I haven't had a car that economical since I sold it in the mid-eighties.

I was thinking about that VW this morning as I got stuck in a snow bank in my Chevy truck which I've had about 9 years now. It has never done well in the snow regardless of how much sand I throw in the back. Twenty miles to the gallon is doing really, really good. I'm thinking of getting a new car (or a new used car) early next year. So, this article on the 10 Most Fuel Efficient Cars got my attention. They are according to the article:

10. Toyota Yaris
9. Three way tie between Ford Escape, Mercury Mariner and Mazda Tribute
8. Mini Cooper
7. Toyota Camry Hybrid
6. Nissan Altima Hybrid
5. Smart ForTwo
4. Honda Civic Hybrid
3. Toyota Prius
2. Honda FCX Clarity (hydrogen-electric)
1. Telsa Roadster

I have a friend who is lusting after a Telsa Roadster. But at $100,000 a pop, I'd have to drive it a whole lot of miles, even at 135 miles per gallon, to make it pay for itself. Personally, I am attracted to the Aptera. It isn't going to be available here in Colorado for a while. Maybe I could make due with a Yaris until then?

[Image: Grabbed this picture from a story posted on Car Lust called Our Cars---1969 Volkswagon Beetle. Go there to read another man's story about his bug. Mine had more rust of the fenders.]

American Chop Shop: A plan for making America's fleet of vehicles green

I came up with this idea last summer but after writing it out decided it would cost too much to be sellable to the general public or congress. Then the economy went south, the voters went for a President promising change and we passed the biggest bailout package in the countries history. This idea seems almost cheap now.

My citations are from early summer and some of the money figures are based on gas in the $2.50/gallon range. But I want to get the idea out for discussion. If there is any interest, smarter folks than I could cite the financial costs and feasibility of the project.

What I like about this idea is that it works to get inefficient vehicles off the road now and also give people the opportunity and impetus to buy a greener vehicle. It could also be a boost to the economy from the demand side of the equation instead of the supply side (ie; sending money to the automakers).

Let me know what you think?

American Chop Shop
A plan for making America’s fleet of vehicles green.

Overview

The Federal government could build a series of automobile recycling facilities around the country with the express purpose of speeding up the process of replacing our current fleet of vehicles with more fuel efficient cars and trucks. The program would also act as an economic boost to our economy giving consumers the ability to purchase newer vehicles and divert more of their spending money away from transportation (fuel, price of new car, loss of trade in value) towards other areas.


Problem:

US has a fleet of vehicles that get poor gas mileage. Few electric or other alternative energy cars on the road. Statistically, the turnover of vehicles is about 10% every year. So, even if every car that was purchased was green it would take 10 years to get our current crop of gas guzzling, low mileage, planet beating cars off the road. (6)

One result of the rising gas prices is that folks who want to trade in their old gas guzzlers are getting poor trade-in value as dealers are having a hard time moving these vehicles. While this is a justifiable and understandable process of the market. Our communities and environment could use a little help here. This might be the place for big government to step in and help out.

Solution:

1. Set up regional centers to buy, dismantle and recycle old automobiles and trucks. These dismantling-factories(5) could be placed near areas with high unemployment. Some of the parts could be recycled out for parts but the majority of the materials could be broken into their basic components and sold as such.

2. Start with the older cars with the worst gas mileage first and offer to buy them at blue-book value (or slightly higher). Each year the program could expand to pull more modern cars off the roads.

Replacing one 17mpg car with a hybrid that gets 45mpg halves the vehicles environmental impact and saves the consumer roughly $2100 in fuel costs. If an electric vehicle was chosen, the driver would save over $3500 per year and the environmental impact would be decreased even more. (7)

3. Put a lid on the project with an end goal in mind such as 90% of vehicles on our roads will meet certain standards of efficiency. Towards the end of the project, the dismantling plants might be phased into a general recycling type facility or closed completely. The first five years will probably see the biggest number of vehicles being recycled. After that the program will start to diminish each year as the supply of older vehicles diminish.

Gas prices will also start to fall as demand starts to fall. Steps need to be taken to ensure we don’t fall off the conservation wagon like we did after our efforts after the last gas crisis in the 70s. Incentives need to be there for consumers to buy greener cars and industry to make them. For national security, we need to reduce our dependence on foreign oil once and for all. (8)

4. Offer a tax rebate to folks who buy a green car. This along with the money a person could get from selling their car to a recycler would make green cars more affordable for the next five years and give an economic stimulus to car manufacturers to actually make and supply green cars.

Rather than a tax rebate, a voucher could also be issued instead for the value of the car plus an extra 25% that could be used as a trade in for a more fuel efficient car. This alternative would ensure that monies gained from the sale of an old gas guzzler go towards the purchase of a green car.

5. This does not have to be a money making program. It’s purpose first and foremost is to get the gas guzzlers off the road. Even if it ends up costing the government money, we’d be paying that anyway for other technologies or solutions. We pay to maintain the road infrastructure of this country. It’s time to put a little money into the vehicles on that infrastructure. Isn’t this more economically stimulating than sending every tax payer $600 and possibly a little cheaper in the long run? Or sending Detroit 25 billion?

Benefits

1. We could turn over 90% of the fleet of American cars and trucks in less than ten years.
2. Reduce auto emissions drastically over the next ten years (3) which would help our over all environment as automobiles are responsible for over 50% of CO2 emissions. (4)
3. Create jobs in America for Americans. Dismantling plants would be located in America and would create a variety of support positions and related industries.
   
4. Create demand and innovation in the automobile industry.
5. Reduce our reliance on foreign oil (1)

Conclusion
The planet is in trouble. Our economy is being hurt by high gas prices. We have to do something and waiting for the market (supply and demand) to bring about a green automobile revolution is too slow. This plan could be one part of the solution and has the following benefits:

• It is a visible and tangible response to the problem. Everyone would see the change as the number of efficient vehicles become more visible on the road. The government could post the amount of gas saved, the reduction in emissions on a web site with every vehicle they purchase.
• Every person who has an older vehicle or who wants to buy a new one could take advantage of the program regardless of their income level.
• The economy would be stimulated from a variety of directions.

1. Replacement of older cars with more efficient models would infuse consumers and economy with cash (2)
2. Stimulus to automobile industry as demand rises for fuel efficient cars
3. Jobs created by the dismantling plants, the network created to buy and transport older vehicles and the re-direction of consumers money from transportation costs to other goods and services.

In closing, this may not be a perfect solution or even the best but I expect my government to step in when there is a crisis and I think we are in the midst of three of those now. Our dependence on foreign oil, a deteriorating environment and an economy slipping into deep, recession.


Citations

1. More than half of the gasoline we put in our cars comes from oil imported from other countries. [http://www.fueleconomy.gov/feg/why.shtml]
(2) Petroleum imports cost us over $5.2 billion a week—that’s money that could be used to fuel our own economy. [http://www.fueleconomy.gov/feg/why.shtml]
(3) Highway vehicles are a major contributor to air pollution in the U.S., producing 26-62% of key chemicals that cause smog and health problems. [http://www.fueleconomy.gov/feg/airpoll.shtml]
(4) See chart on this page: http://www.fueleconomy.gov/feg/climate.shtml
(5) Article: “Working overtime: America's auto shredder capacity grows to feed a hungry global market” http://findarticles.com/p/articles/mi_m0KWH/is_10_42/ai_n6276840
(6) The life expectancy of a car in the U.S. is about 10 years, during which it will pass through an average of three owners. http://www.pbs.org/cringely/pulpit/2008/pulpit_20080606_005036.html (This stat is bandied about in several places, but I can’t find the original source?)
(7) (This is based on driving 15000 miles with gas prices at $4 and electric costs based on $.04 a mile.) I expect gas prices to be a little higher and/or the government to step in and artificially lower the costs.
(8) Following the oil crisis of the early 1970s, however, smaller vehicles, often imported from Japan, became more and more popular with the American public as these vehicles featured better fuel economy ratings. In the late 1970s, the US government passed minimum fuel economy standards and in the 1980s American automobile manufacturers drastically downsized their cars, http://en.wikipedia.org/wiki/Passenger_vehicles_in_the_United_States#Age_of_vehicles_in_operation