A deal reached by House lawmakers this week on a "cash for clunkers" provision for a proposed energy and climate bill was initially hailed as a win-win for often-competing interests of the auto industry and environmentalists.
But not everyone believes the compromise gives environmental concerns equal weight with industry needs.
The clunkers provision would pay Americans who scrap their older cars and trucks for newer, more fuel-efficient vehicles. Its supporters say it would spur car sales to help the battered U.S. auto industry while reducing the use of transportation fuel.
At first glance, the plan looks "green." By increasing the overall fuel economy of U.S. vehicles, the program cuts fuel use and greenhouse gas emissions that accompany it. But environmentalists and some academics are warning that looking only at fuel economy fails to paint a full picture of automotive emissions.
The program, they say, fails to have a net environmental benefit unless the fuel-saving gains are greater than the environmental cost of building the new cars and trucks in the first place.
"When you build a car, you have to get the ore out of the ground, you have to refine it, you have to manufacture the car, you have to ship it, and that all requires energy and releases CO2," said Bill Chameides, dean of Duke University's Nicholas School of the Environment. "Just because you go out and buy a new car and it has a higher fuel economy, it doesn't mean you're actually saving C02."
The compromise, which was brokered by President Obama, crashes head-first into this problem, according to Chameides and Richard Larrick, an associate professor at Duke's Fuqua School of Business.
The two point to some of the minimum fuel-economy thresholds of the deal: the 1-mile-per-gallon improvement for large, light-duty trucks and a 2 mpg jump for smaller trucks, both of which would earn a $3,500 credit.
"Those are the ones I'm particularly worried about," Larrick said. "It's not clear that at the minimum levels of improvement there is an actual environmental gain."
Chameides said the carbon footprint of a new car or truck varies, but he estimates that the amount of carbon dioxide released during the production of a single vehicle is about 6.7 tons on average and can climb as high as 12 tons.
Using U.S. EPA estimates that roughly 20 pounds of CO2 is produced for every gallon of gas consumed, the average new car or truck would need to save roughly 700 gallons of gas before it begins to produce a net reduction in carbon emissions.
Under the worst-case scenario, in which the driver scraps a car with the highest fuel economy allowed under the proposal and buys one with the lowest, the payback period is about five years for a car, 10 years for a small truck and about 14 years for the large pickups, according to Chameides. He said the current median lifetime of a car or truck falls between eight and 10 years, meaning many trucks purchased through the program might never produce a net environmental benefit.
"The other levels of qualifications, the $4,500 credits for larger improvements, make a lot more sense. But the lower levels are really close to not having any benefit, at least from an environmental view," Chameides said. "It may be Congress is saying this isn't for the environment, it's for Detroit. But if you want this to be great for the environment, they really need to make the requirements stronger."
The proposal makes recouping the energy costs of production for passenger car and smaller trucks easier, especially for trade-ins that earn the larger of the two credits.
Americans who scrap a passenger car that achieves less than 18 miles per gallon can get a $3,500 credit toward the purchase of a car with a 4 mpg gain, or a $4,500 credit for a 10 mpg improvement. For small, light-duty trucks, a 2 mpg jump is worth the $3,500 credit, while a 5 mpg increase secures the larger credit.
But even those numbers are also skewed, Larrick said, because they do not reward all environmental gains equally. He said the lawmakers who authored the bill fell victim to a common misconception that assumes large jumps in a car's mpg rating will equate to complementary hefty increases in fuel savings. But if mpg figures are instead translated to gallons consumed per mile, the fuel consumption becomes clearer, according to Larrick.
"The way they have it, the 10 mpg jump from 12 to 22 is treated the same as the jump from 18 to 28; both get the larger credit, but the two don't produce the same fuel savings," he said.
For example, replacing a large vehicle that gets 10 mpg with one that gets 20 mpg reduces gas consumption over 100 miles from 10 gallons to 5 gallons. But replacing a small vehicle that gets 25 mpg with one that gets 50 mpg reduces gas consumption over the same distance from 4 gallons to 2, a savings of 2 gallons for every 100 miles driven for the small, fuel-efficient car, compared to savings of 5 gallons for the truck.
Compared to the 25 mpg increase for the car, the 10 mpg jump for the truck "looks small from a mpg point of view, but when you turn the numbers over, you're talking about huge gas-saving gains," Larrick said.
In an ideal situation, he said, lawmakers would create many more tiers in the trade-in system that would increase along with improvements in gallons consumer per mile, or gpm, instead of the traditional mpg rating.
"You could have vouchers that keep increasing in value in terms of gpm," he said. "Currently, they have two leaps, from $3,500 to $4,500, but you could have many more."
The small mpg thresholds in the compromise program would affect not just the environmental gains but also the car buyer's wallet, Larrick said. He said that moving from a 14 mpg car to a 20 mpg car would be worth roughly $9,000 over six years, including the voucher rebate and gas savings, assuming the price of a gallon of fuel is $2.50. But increasing from 14 mpg to 15 mpg would be worth only about $4,500 over the same time frame.
"I'd love for the bill writers -- and later, the car dealerships -- to focus on the dual sources of personal benefit from the trade-in: both the voucher and the gas savings," he said.
The professors were not the only ones who were unhappy with the outcome. The American Council for an Energy-Efficient Economy, a nonprofit research organization, urged lawmakers in both the House and Senate to revise the bill to make it more environmentally conscious.
"We would welcome incentives to retire gas guzzlers and encourage the purchase of efficient vehicles," said Therese Langer, ACEEE transportation director, "but the proposal just isn't there yet."