Push-for-Plug-Ins

The widely popular “cash-for-clunkers” program received a much-needed budget measure today—thus setting the stage for round 2 of the U.S. Government’s attempt to reinvigorate its struggling auto industry.

Despite the program’s apparent success, it’s been heavily criticized for being too expensive and, perhaps more importantly, for promoting short-term sales rather that long-term economic stimulus.

But the critics haven’t seen nothing yet. The cash-for-clunkers program may, in fact, be destined for several more rounds—adding billions upon billions of dollars to the funds already allotted.

Enter the Climate Change Agenda

The primary aim of the cash-for-clunkers program has been to sell cars and spur domestic production. So far, improved fuel economy and reduced emissions have been considered side benefits. But this is likely to change.

The Obama Administration has pledged to cut U.S. greenhouse gas emissions by 80 percent by 2050—a pledge that is in-line with the magnitude of reductions advocated by the scientific establishment.

Transport-related emissions would have been tangential in this scenario, if not for its importance to consumer perceptions. Driving a more fuel-efficient vehicle is perhaps the most significant Climate Change-fighting action available to consumers today. It’s therefore an immensely powerful vehicle with which to spur the type of market transformation required by an 80-percent emissions cut.

Sixty Million Plug-In Hybrids

According to updated projections, the cash-for-clunkers program may generate as much as 500,000 new vehicle sales. This is a sizable number—roughly equivalent to 8 percent the entire U.S. vehicle fleet.

But it’s going to take much more than that if we want to decrease U.S. vehicle emissions by 80 percent by 2050. We would, in fact, need to increase average fuel economy by several hundred percent.

Plug-in hybrids are the only (proven) technology capable of delivering such a drastic increase in such a short period of time. But the technology has yet to become widely available, with the first vehicles destined for the U.S. market sometime 2010. And even then they will command a price tag hefty enough to discourage prospective car buyers for years to come.

Given the fact that present-day vehicles remain on the road for an average of 15 years, it’s hard to imagine a rollout of more than 60 million plug-in hybrids without some form of government intervention. Whether it’ll be in the form of a gas tax, a regulatory measure, or a cash-for-clunkers-like program remains to be seen. But one thing is for certain: the success of cash-for-clunkers will not go unnoticed. And who knows, perhaps a “push-for-plug-ins” is just what our climate needs.