A Modest Proposal: Eco-Friendly Stimulus
[2008-7-28]
Tag : motor cleaner
Cash for Clunkers is a generic name for a variety of programs underwhich the government buys up some of the oldest, most pollutingvehicles and scraps them. If done successfully, it holds thepromise of performing a remarkable public policy trifecta —stimulating the economy, improving the environment and reducingincome inequality all at the same time. Here’s how.
A CLEANER ENVIRONMENT The oldest cars, especially those in poorcondition, pollute far more per mile driven than newer cars withbetter emission controls. A California study estimated that cars 13years old and older accounted for 25 percent of the miles drivenbut 75 percent of all pollution from cars. So we can reducepollution by pulling some of these wrecks off the road. Severalpilot programs have found that doing so is a cost-effective way toreduce emissions.
MORE EQUAL INCOME DISTRIBUTION It won’t surprise you to learnthat the well-to-do own relatively few clunkers. Most are owned,instead, by low-income people. So if the government bought some ofthese vehicles at above-market prices, it would transfer a littlepurchasing power to the poor.
AN EFFECTIVE ECONOMIC STIMULUS With almost all the income taxrebates paid out, and the economy weakening, Cash for Clunkerswould be a timely stimulus in 2009. As was made clear during theCongressional debate last winter, prompt spending is critical to aneffective stimulus program. And the quickest, surest way to getmore consumer spending is to put more cash into the hands of peoplewho live hand-to-mouth.
Here’s an example of how a Cash for Clunkers program mightwork. The government would post buying prices, perhaps set at a 20percent premium over something like Kelley Blue Book prices, forcars and trucks above a certain age (say, 15 years) and below acertain maximum value (perhaps $5,000). A special premium mighteven be offered for the worst gas guzzlers and the worst polluters.An income ceiling for sellers might also be imposed — say,family income below $60,000 a year — to make sure the moneygoes to lower-income households.
Cash for Clunkers is a generic name for a variety of programs underwhich the government buys up some of the oldest, most pollutingvehicles and scraps them. If done successfully, it holds thepromise of performing a remarkable public policy trifecta —stimulating the economy, improving the environment and reducingincome inequality all at the same time. Here’s how.
A CLEANER ENVIRONMENT The oldest cars, especially those in poorcondition, pollute far more per mile driven than newer cars withbetter emission controls. A California study estimated that cars 13years old and older accounted for 25 percent of the miles drivenbut 75 percent of all pollution from cars. So we can reducepollution by pulling some of these wrecks off the road. Severalpilot programs have found that doing so is a cost-effective way toreduce emissions.
MORE EQUAL INCOME DISTRIBUTION It won’t surprise you to learnthat the well-to-do own relatively few clunkers. Most are owned,instead, by low-income people. So if the government bought some ofthese vehicles at above-market prices, it would transfer a littlepurchasing power to the poor.
AN EFFECTIVE ECONOMIC STIMULUS With almost all the income taxrebates paid out, and the economy weakening, Cash for Clunkerswould be a timely stimulus in 2009. As was made clear during theCongressional debate last winter, prompt spending is critical to aneffective stimulus program. And the quickest, surest way to getmore consumer spending is to put more cash into the hands of peoplewho live hand-to-mouth.
Here’s an example of how a Cash for Clunkers program mightwork. The government would post buying prices, perhaps set at a 20percent premium over something like Kelley Blue Book prices, forcars and trucks above a certain age (say, 15 years) and below acertain maximum value (perhaps $5,000). A special premium mighteven be offered for the worst gas guzzlers and the worst polluters.An income ceiling for sellers might also be imposed — say,family income below $60,000 a year — to make sure the moneygoes to lower-income households.
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