'Cash for clunkers' is a lemon
THE old warning about Detroit’s auto factories went like this: bad cars were built on Mondays and Fridays. The slackers on the assembly line didn’t show up for work and quality control was low.
So buyers beware: Monday and Friday’s cars were lemons. But the trouble was, buyers had no way of knowing which day their prospective model was manufactured.
During elections, policies keep on coming, like cars on a production line. And more often than not, it seems as though no one’s checking their quality. But unlike car buyers, voters are in luck – we can tell if the product’s a dud.
Labor’s ‘cash for clunkers’ scheme was launched on Saturday. I’m guessing it was manufactured on Friday. Let’s pop the bonnet, just to be sure.
From January 1, Labor will gift $2000 to owners of pre-1995 cars who buy a new car. It’ll spend $394 million dollars on the scheme, money hinged from three other climate change policies – the solar flagships program, the renewable energy bonus and carbon capture research.
To be eligible for the payout, old-car owners must purchase a new car that has a greenhouse rating of at least six out of ten on the government’s Green Vehicle Guide website. Labor’s policy fact sheet lists seven of the eligible cars, including the Ford Falcon EcoBoost and the Toyota Hybrid Camry.
EcoBoost-Hybrid – wow! That sounds green, right? But it neglected to mention those other – ahem – icons of fuel efficiency, the Toyota Prado 4WD, or the Hilux 4X4 ute, which are also eligible.
On closer inspection, over half of the 1800 new models sold in this country will qualify. Far from being an ambitious target, a greenhouse rating of six equates to the average performance of the entire Australian fleet, as it stands.
New vehicles here just aren’t very efficient. According to report released by Environment Victoria this year, new cars purchased in Australia are about 41 per cent more polluting than those bought in Europe.
When a similar ‘cash for clunkers’ scheme was wheeled out by the British motor industry last year, journalist George Monbiot described it as “the worst scam of all”. He analysed the cost of carbon reduction under the proposed scheme, and observed “you’d get almost as much value for money by reclassifying ten-pound notes as biomass and burning them in power stations”.
On Labor’s estimate, its policy will cost $394 per tonne of emissions abated. Environment Victoria claims that under a basic emissions trading scheme, it would cost just $20 to save a tonne of carbon dioxide emissions.
Monbiot identified other flaws that also apply to Gillard’s payout. Firstly, there’s the ‘rebound effect’. Typically, gains in efficiency are offset by increased consumption – when driving costs less, people tend to drive further. Any benefit is cancelled out, at least in part.
Secondly, many people who drive old models would have bought new ones anyway. Under cash for clunkers, they’ll get money for nothing.
Thirdly, some people who would otherwise have given up their car may decide to buy a new one instead. After all, $2000 is a hefty incentive to drive. In those cases, the policy will actually increase their personal emissions.
And it gets worse. There’s some research to suggest that scrappage schemes increase greenhouse gas emissions overall.
A Dutch study, published in the journal Transportation Research in 2000, concluded that “reducing the age of the current car fleet may result in an increase of life-cycle CO2 emissions”.*
The researchers argued that because about one-fifth of the energy consumed by a car over its lifetime is burnt in manufacturing, the optimal car lifetime is 19 years. They also found that the owners of new cars drove more than twice the distance each year than people with cars more than ten years old.
When our politicians set the course for our transport future, money spent on cars is money that hogs the road from the alternatives – public transport, bicycles and walking.
But if the Labor Party really wants to improve the efficiency of our car fleet, it should impose strict fuel efficiency regulations, not give away wads of cash to a select few for no demonstrable gain. Japan and the EU are phasing in standards that equate to almost half the fuel consumption of an average new Australian car.
As an advocate for action on climate change, Gillard does a perfect impression of a shonky used-car dealer. Sure, she’s put ‘cash for clunkers’ through a greenwash, but it’s a lemon. Don’t buy it.
* B. Van Wee, H. Moll, J. Dirks, 'Environmental impact of scrapping old cars', Transportation Research, Part D, 5 (2000), 137-143.