Cash for clunkers

The US Senate recently passed a ‘Cash for Clunkers’ program, allowing owners of old, emission-heavy vehicles, to receive up to USD$4500 when they trade them in for new, fuel efficient vehicles.
Environmental website TreeHugger, in an article entitled Cash for Clunkers Passes – Auto Industry Saved? Blue Skies Ahead? explores the issue both from the perspective of how much it will save in terms of emissions, but also in terms of the implications for the flagging US automotive industry, prior to the bill being made into law.

Since coming into effect, the Cash for Clunkers program has proved wildly successful; running out of funds in just over a week. In a follow up article, Cash for Clunkers Controversy Continues: Some Senators Won’t Approve Unless It’s Made GreenerTreeHugger looks at how the criteria for securing a grant are considered by many as too lenient, and unlikely to make any significant effect on overall automotive emissions.

It should be noted that such programs have been around in Europe for the last 10 years.

PCI’s foreign correspondent, on a trip to Italy in July, noted that there were hardly any old vehicles on the road – most being new, small models. Indeed, in Italy there is a high take up of the incentives being offered to scrap old and polluting cars. The incentives are issued by the government to drivers wishing to scrap their vehicles (classified as Euro 0, 1 or 2 – based on their CO2 emissions) and purchase a vehicle classified Euro 4 or 5 (with maximum emissions of 140gr CO2/km for petrol and 130gr CO2/km for diesel engines). The amount of the incentive for 2009 is of €1,500 (around $A2,500). Higher benefits accrue for the purchase of low emission commercial vehicles. In addition, car manufacturers offer special discounts and, in certain cases, an exemption from the annual registration charge for up to three years. Similar incentives exist in Spain, France and Germany.

So – is the US actually trying to improve the environment from the evils of its polluting automotive range? Or is it just trying to improve the financial health of its automotive industry given the dire performance over the past 12 months…? Well, we think that an initiative that may contribute to both is well worth it!

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