The Cash for Clunkers Conundrum

That Cash for Clunkers Program Was Not an Environmental Success Story
In 2009, the Car Allowance Rebates System (CARS), fondly known as the Cash for Clunkers program, was put into effect to take older, less efficient vehicles off the road and replace them with vehicles that get better gas mileage and release fewer tailpipe emissions. The program was mainly designed to provide a long-term economic boost to U.S car companies. But what was actually accomplished by the program? Unfortunately, CARS didn’t account for the total lifecycle of the scrapped vehicles, or the environmental cost of manufacturing the new vehicles that were sold. When the incentive was offered, automakers sold nearly 690,000 vehicles in cities with lots of used cars, only to see sales plummet again once the program expired.

According to the Automotive Recyclers Association (ARA), almost 100% of a vehicle can be recycled. Even the fluids can be reused, according to the ARA. Transmission and brake fluids, anti-freeze, oil, gasoline, diesel and Freon from air conditioners are harvested at scrap yards for use in other vehicles. However, still-functioning engines are the most valuable part of a scrapped car. The engine itself takes the most amount of energy and resources to manufacture, so car companies reap both an environmental and cost benefit from being able to recycle engine parts.

Many of the cars that were traded in during Cash for Clunkers were perfectly functioning cars in good condition, and excellent candidates to have their engines and other parts recycled. With the engine destroyed, many clunkers bypassed the recycling companies and went straight to junkyards to be crushed and shredded. The ARA issued a report when the CARS program was announced saying that a much more efficient program would have been to encourage recycled parts usage. The National Highway Traffic Safety Administration explained at the time that the engines must be destroyed to prevent the vehicles from being resold and taking the road again. For any dealer that did not follow that law, there was a hefty $15,000 fine per infraction against them.

CARS claims to have had a positive environmental impact by taking these old vehicles off the road, yet it required destroying the traded-in vehicle’s drive train and engine. The engines were destroyed with a sodium silicate solution, also known as liquid glass. The silicate causes the engine’s parts to freeze and ensures it never runs again. Once the engine was destroyed, the car dealer had two options. For newer models, dealers were more likely to sell them to a full-service professional parts dealer, where the vehicle would be instantly stripped of the most commonly reused parts, aside from the unsalvageable engine. For older models, they were likely sent to a self-service parts dealer, where individuals could pick a needed piece at random. Many of the clunkers ended up at auctions where parts dealers bid on them. By the time all reusable parts are salvaged, the material left is the car’s frame. CARS mandated that the clunkers be crushed or shredded within 180 days, regardless of whether all the usable parts were salvaged or not. In contrast, a non-clunker vehicle could stay at a professional parts dealer for up to 36 months.

Cars that are shredded are turned into small, palm-sized pieces of metal, which is then sold to manufacturers as raw material. The shredded material can be turned back into car parts, or heavy machinery, steel plates, railroad tracks among other products. For each ton of metal recovered by a shredding facility, roughly 500 pounds of shredder residue are produced, meaning about 3 to 4.5 million tons of shredder residue is sent to landfills every year. This shredder residue typically consists of a mix of materials including polyurethane foams, polymers, metal oxides, glass and dirt. A partnership between the American Chemistry Council, Argonne National Laboratory and USCAR has been working on a way of extracting more of this material, specifically the plastic. Argonne estimates that recycling just the plastic and metal would represent 24 million barrels of oil saved each year. Unfortunately, that did not happen with the 690,000 vehicles scrapped during the Cash for Clunkers program.

The Department of Transportation reported that Cash for Clunkers was an environmental success. The clunkers averaged 15.8 mpg, compared with the 25.4 mph for new vehicles being purchased, for an average fuel-economy increase of 61%. In general, drivers traded in inefficient SUVs and trucks for more efficient passenger cars. However, it’s quite easy to negate this small difference in gas mileage purely by the fact that people will be more likely to drive a vehicle that takes less money to fill up with gas. It’s an efficiency paradox: as we get more efficient at using energy, the overall cost of energy goes down, but we respond by using more of it. Auto emissions of carbon dioxide are directly proportional to gasoline consumed. With only 690,000 fuel-efficient vehicles purchased and over 250 million cars registered in the U.S., that is a negligible difference in overall greenhouse gas emissions.