Retire the clunker?

Jan. 16, 2009
By Elisa Wood January 15, 2009 What would it take to convince you to get rid of your gas-guzzling old clunker? Would $5,500 do? Some members of Congress think this is the magic figure. Under a bill introduced in the House and Senate today, Uncle Sam would give you a credit of up to $5,500 […]

By Elisa Wood

January 15, 2009

What would it take to convince you to get rid of your gas-guzzling old clunker? Would $5,500 do?

Some members of Congress think this is the magic figure. Under a bill introduced in the House and Senate today, Uncle Sam would give you a credit of up to $5,500 to scrap your old car. You could spend the credit on a new, fuel efficient vehicle or mass transportation.

The proposal makes a lot of sense and has won support from the American Council for an Energy-Efficient Economy.

Why the incentive? Because the rush for hybrids and other fuel-efficient autos is largely an upper- income trend. Nearly half of the nation’s $100,000/year-plus earners own cars that are less than four years old. But only about a quarter of the $40,000-$45,000 set have such young vehicles, says an ACEEE whitepaper. http://aceee.org/transportation/Crusher%20white%20paper%20fin.pdf.

The credit would bring middle-income families into the market to buy new and cleaner cars. Greater sales of these cars should reduce the cost of their advanced technologies.

Equally important, the credit helps fill a hole in the Corporate Average Fuel Economy standard passed in 2007. The CAFÉ standard requires a 40% improvement in fuel economy for new vehicles by 2020. Nice idea, but not enough people buy new cars for the standard to significantly lower our oil use. In fact, about 70% of today’s auto purchases involve used vehicles.

Called the Accelerated Retirement of Inefficient Vehicles Retirement Act of 2009 (ARIVA), the bill would apply to used cars that get less than 18 miles/gallon and would be in effect from 2009 to 2012. ACEEE estimates consumers would retire 575,000 vehicles annually and save 46,000 barrels per day of oil by 2013.

I think I’d take the deal. But will Congress and the Obama administration? Stay tuned.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

Twitter: @ElisaWood

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