As a means of reducing greenhouse gas emissions, this “cash for clunkers” deal is probably among the least cost-effective uses of federal dollars one could imagine. That doesn’t mean it won’t have benefits to the auto industry, but nobody should sell it as a particularly strategic GHG reducer.
‘Clunkers’ deal stirs questions about climate benefits
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.
Frankly, the biggest problem with the program from a GHG point of view is that you are paying large amounts of money for relatively small incremental gains. And that’s without even considering the fact that clunkers don’t tend to be driven as much as new cars — or, as the article notes, the environmental impact of building the new cars and trucks.
The rest of this piece is reprinted at the end of this post.
Cantor: Extremist Shimkus ‘Providing A Real Knowledge Base’ On Energy
Minority Whip Eric Cantor (R-VA) is organizing a “strike team” to oppose clean energy reform, likely led by extremist global warming denier Rep. John Shimkus (R-IL). Speaking to the global warming denying National Association of Manufacturers, Cantor said House Republican leaders will “target legislative efforts to cap U.S. greenhouse gas emissions”"¦
Duke Energy plans 400 ‘mini’ solar projects
Duke Energy announced that it is leaving the National Association of Manufacturers lobbying group (see below) because of differences over climate change legislation””NAM is vehemently against any legislation while Duke Energy spokesman Thomas Williams says, “The sooner we get the legislation passed, the better. We’d like it to happen this year if possible.” Additionally, Duke’s CEO Jim Rogers announced yesterday the utilities plans to invest $50 million in hundreds of “mini” PV power plants.
Is the South’s largest polluter changing its ways? I’m not fully convinced of the utility giant’s sincerity, but it’s nice to hear such a reversal in tone: “Solar and wind are both going to be keys parts of our strategy going forward,” Rogers stated. Note that North Carolina’s Renewable Electricity Standard””which only requires a measly 12.5% renewable energy by 2021″”is a playing a major role in motivating Duke Energy’s move towards clean energy.
Duke Energy Corp. aims to build up to 400 “mini” photovoltaic power plants at schools, homes, offices and other locations during the next two years.
The Charlotte, N.C.-based utility plans to invest $50 million in the rooftop and ground-mounted PV projects, which will generate about 8 megawatts collectively, CEO Jim Rogers told reporters yesterday, following Duke’s annual meeting.
“Solar and wind are both going to be key parts of our strategy going forward,” Rogers noted.
The North Carolina Utilities Commission on Wednesday gave Duke approval to move ahead with the solar plan. Duke had initially proposed building 850 PV projects — about 16 megawatts — but the utility halved the program after consumer advocates for the commission objected to the program’s $100 million price tag.
Duke aims to begin installing the PV projects in the fourth quarter — the utility’s first solar projects anywhere, said Dave Scanzoni, a company spokesman.
A state law requires Duke and the state’s two other investor-owned utilities to get 12.5 percent of their energy through renewable energy or energy efficiency measures by 2021. Solar power must be part of the mix beginning next year.
Duke plans to buy all of the electricity from a 16-megawatt PV array slated for Davidson County, between Charlotte and Greensboro. SunPower Corp. aims to break ground on the project this year, Scanzoni said.
Duke also plans to build “biopower” plants fueled by wood waste, buy methane-generated electricity from landfills, and build wind farms in the mountain West and elsewhere (Greenwire, April 1).
“Long-term, we see distributed generation as a key component of our business,” Scanzoni said.
The Tennessee Valley Authority — long dependent on a fleet of coal and nuclear plants that supply 90 percent of its power — is looking to bolster its renewable energy output in anticipation of federal greenhouse gas standards.
The company will look to modernize its dams and purchase up to 2,000 megawatts of wind power from the blustery Dakotas and other parts of the Midwest, said Joe Hoagland, TVA’s vice president of environmental science, technology and policy.
Industry leaders banking on wind, solar
… states and cities are betting heavily on the most established of wind and solar technologies to help them expand their renewable-power portfolios.
The stakes are high, the goals ambitious. California, for example, is aiming to draw 33 percent of its power from renewable sources by 2020, and Austin, Texas, plans to get 30 percent of its electricity from renewables in the same time.
“Utility-scale wind is the dominant technology to get us there in that time frame,” Jeff Renaud, director of General Electric Co.’s Ecomagination program, told a clean technology conference here this week. “Other technologies might surprise us. … But for the time being, it’s utility-scale wind.”
San Francisco Approves Major Solar Project
California continues to stride ahead of the rest of the country in renewable energy production, as San Francisco announces plans for a 5-megawatt solar PV plant to be built inside city limits.
San Francisco’s Board of Supervisors has approved a plan to build what would be one of the largest solar photovoltaic arrays in California. With five megawatts of capability spread over 25,000 panels, it will, if completed, also be among the largest municipal solar projects in the United States.
San Francisco’s proposed system “” which would produce roughly the amount of energy used by 1,000 households, the developers said “” would bring the city’s total solar capacity to seven megawatts. It will be used to power municipal properties like schools and government offices.
Under the deal, Recurrent Energy, a local solar company, will assume the initial financial responsibility for the panels, as well as pay for continuing operating and maintenance costs. In return, the city incurs no upfront expenses, but is obliged to purchase energy directly from Recurrent Energy at a cost of 23.5 cents per kilowatt-hour, plus 3 percent per year.
China Outpaces U.S. in Cleaner Coal-Fired Plants
China’s frenetic construction of coal-fired power plants has raised worries around the world about the effect on climate change. China now uses more coal than the United States, Europe and Japan combined, making it the world’s largest emitter of gases that are warming the planet.
But largely missing in the hand-wringing is this: China has emerged in the past two years as the world’s leading builder of more efficient, less polluting coal power plants, mastering the technology and driving down the cost.”
Venture capital is … returning to one of its traditional strengths: applying information technology to improve the efficiency of energy consumption.
About half of the dollars invested in clean technology last year went to alternative energy companies. In the first quarter of 2009, though, only one-third of venture dollars invested in clean tech went to these companies, the National Venture Capital Association said.
Industry Looks to LED Bulbs for the Home
While the current crop of compact fluorescents could do the job, the industry is rallying around LED lamps for many applications. They say LEDs last longer than current bulbs and compact fluorescent ones and their energy consumption could eventually be less than fluorescent lights’. They can also be made in many shapes and sizes, which was evident at the trade show. Unlike compact fluorescents bulbs, they contain no mercury and they work well in cold weather. They provide a more pleasing light than fluorescents.
UK plans smart meter revolution to cut energy cost
Every household in Britain should by 2020 be able to cut its energy bills and carbon footprint using “smart meters” and handheld devices to control energy use closely, the government said on Monday.
Britain plans to replace all existing electricity and gas meters — often clunky objects hidden away amid domestic clutter in dark understairs cupboards — with easily viewed devices that show consumers exactly how much energy they are using, including by individual appliances.
When Chevron Hires Ex-Reporter to Investigate Pollution, Chevron Looks Good
What did Chevron do when it learned that “60 Minutes” was preparing a potentially damaging report about oil company contamination of the Amazon rain forest in Ecuador? It hired a former journalist to produce a mirror image of the report, from the corporation’s point of view.
As a demonstration of just how far companies will go to counteract negative publicity, the Chevron case is extraordinary. Gene Randall, a former CNN correspondent, spent about five months on the project, which was posted on the Internet in April, three weeks before the “60 Minutes” report was shown on May 3.
Drought, Politics Trouble Farmers In California
California is in its third year of drought, and many farmers in the state’s crop-rich Central Valley are looking at dusty fields, or worse, are cutting down their orchards before the trees die.
Hardest hit is Westlands, the biggest irrigated region in the country, where much of the nation’s fruit, nuts and produce come from. This year, farmers have been told they are getting only a small fraction of the water they need.
Here is the rest of the cash for clunkers piece from Greenwire (subs. req’d):
“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.”
Mpg illusion
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.”
I agree with ACEEE. Not much bang for the buck here.
Compiled by Max Luken and Carlin Rosengarten
Previous in TP Climate Progress
Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
I’m actually starting an initiative that suggests that people pledge to keep their cars until a low-cost electric alternative becomes available. Here’s a brief project description:
I pledged to myself some time ago that my 91 Nissan Pickup would be my last internal combustion engine. And right now, I think that if every single person in America who wants an electric car effectively communicates that they are holding on to their dollars until they get one, then there is no political or economic reason not to create the kind of electric infrastructure that Shai Agassi and Better Place proposes.
Do you want electric cars, which emit nothing and are as carbon-neutral as we can make the grid? Do you want them to cost less per mile than gas-powered combustion engines and travel effectively over long distances? We have the technology, political will and economic reality to actually make this happen. All that’s missing is a clear message from me and you.
The first thing you can do is sign Better Place’s petition. You can also do more. And it will be fun. Over the coming weeks, 21st Century Plowshare will be rolling out a comprehensive campaign in which your personal pledge not to buy a car until you can buy a low-cost electric car will be broadcast to the people who need to know: everyone from the major auto companies to your congresspeople to the President himself, because there is simply no reason not to.
It is true that something must be done to get the millions of gas-guzzlers Detroit manufactured over the past 15 years off the roads, but it doesn’t seem like this proposal will do that. The only way this program will do any good is that, for every gas-guzzler turned in, the auto industry is bound by law to make one less *new* gas-guzzler — not just this year, but never again. If they can keep making new gas-guzzlers, then pulling an old one of the streets does nothing and the program is just another subsidy to buy a new car.
And, of course, the provisions of the plan have to make sense. At first, it should only be applied to cars which get less than 15 mpg. Once those really horrible gaz-guzzlers are a thing of the past, then you could let it apply to cars which get 20 mpg or less. And there must be tracking provisions to insure that the new car which is bought to replace the gas-guzzler is at least 30% more efficient than the old vehicle was. Again, anything else is just a subsidy to buy a new car and will do nothing to reduce CO2 emissions in any meaningful way.
Oops… typo… the new vehicle bought should have to be at least 50% more efficient than the old vehicle to qualify for the subsidy.
Why do we need this provision at all? Should the “cap” part of cap-and-trade make this irrelevant?
Sorry, my comment should read “Shouldn’t the cap part of cap-and-trade make this irrelevant?”
GPM not MPG
http://www.mpgillusion.com/2009/05/cash-fo-clunkers-and-1-gpm-rule.html
I agree that the car exchange program is an inefficient use of resources to reduce carbon emissions. I wonder if the older car will be the primary vehicle in a household, or a secondary vehicle. The exchange vehicle should be at a higher efficiency threshold, perhaps fleet average of 35 mpg (is that the ‘new’ number?)
Regarding the pledge to stop buying internal combustion engine vehicles, I wonder if the incentive to install home PV to charge the electric cars would give more benefit than the exchange program. My current electrical consumption of about 8 kwh per hay is too low to justify photovoltaic on my home, but I wonder if that would change if I had an electric car, or at least a plug-in hybrid.
Regarding the ‘clean coal’ power plants in China, the headline seems more optimistic than the full article. Efficiency is (I am estimating here) about 20 % greater than the older US power plants, but sulfur dioxide, NOx emissions are not necessarily well controlled. I do not believe that mercury emissions are mentioned in the article (I may have missed this). Thus, the ‘clean coal’ in the Chinese power plants seems something of a misnomer. Perhaps a link to the blog here challenging the concept of ‘clean coal’ is in order? (I could not find the post, but I thought Joe discussed this previously.)
Success of the cash for clunkers program will have a detrimental impact on the environment. The cheaper it is for people to drive, the more they are going to drive and the United States will continue to develop in its heinously inefficient manner.
On the other hand, if everybody kept their clunkers, gas prices will go up the cost of driving will sky rocket as gas prices increase, people will decided driving isn’t the best thing to do, and the United States will stop digging itself into the deep hole of inefficient development.
Any solution to the environment that still has everybody in cars equals no solution.
Deborah, that is brilliant. I will make the pledge.
If you look at GHG emissions under average US driving over a 10-year period, some 20% of the GHG emissions occur during manufacturing, etc. before the driver gets in the vehicle.
It’s great to see this analysis coming from Duke, and to hear about the 21st Century Plowshare plan. There’s one more missing piece: instead of crushing clunkers, many gas-guzzlers can be converted to run partially on electricity instead. We at CalCars.org (who did the first conversion of Prius to a plug-in hybrid) have been talking about this for some time, and finally getting some attention to the idea. It helped when we did a study showing that scrappage pays back only if the replacement car has 2x the MPG of the clunker; that it takes 40,000 miles of driving to be even with the energy costs embedded in a car, but only 8,000 miles to catch up if the vehicle is converted.
Plus the point no one has yet recognized: unless we convert existing cars, the rate new plug-in vehicles arrive will be too slow to have an impact in the time we need (the next 10-15 years). See the White Paper we wrote on all this at the top of the CalCars home page (click on my namefor that URL) or at http://www.calcars.org/ice-conversions.html
– Felix Kramer, Founder, The California Cars Initiative