The Case Against Forced Vehicle Phase-out Energy Policy Presentation December 6, 2007 Grant Offord

Effectiveness Oil Imports Emissions Unocal SCRAP (1990) 12.5 MPG EPA MOBILE (2005) 20.3 MPG; 12,000 MPY Reductions 591 gallons/(car*yr) 20 million vehicles 11.8 billion gallons/yr 8.4% gas use 13% oil imports Emissions EPA Projection (1992) 1.64 tons CO2/(car*yr) 32.7 million tons/yr My Calculation 11.8 billion gallons/yr 97.0 million tons/yr Reductions 6,010 million tons/yr 0.5 - 1.6% less CO2 Oil Imports: The Unocal SCRAP program in LA, which was the first kind of program to retire cars in an attempt to reduce smog (1990) Cars retired, according to Unocal, averaged 12.5 MPG. The EPA, in its MOBILE report in 2005, claims the fleet average for all vehicles is 20.3 MPG and that the average number of miles driven is 12,000. Based on a number of reports concerning old vehicle phase-out, it seems that the replacement cars are driven more than the old cars. For the purposes of the following calculation… We can assume conservatively that the new cars are driven the same amount as the presumed fleet vehicle being driven. We can also assume conservatively that the new cars have a fleet average of 25 MPG. This results in a savings of 591 gallons of gasoline saved per vehicle, per year; If we assume a ridiculous 20 million vehicles at this use level are replaced, we can save 11.8 billion gallons of gas per year. This amounts to only 8.4% of all gas use, which corresponds to 13% of the oil we import. Emissions: An EPA projection for the SCRAP program estimated 1.64 tons CO2 per car per year could be removed over two million cars. I conservatively estimated that the savings could be applied to up to 20 million cars on the road, saving 32.7 million tons CO2 per year. This seemed low, so I did my own calculation based on gas savings from the previous section. I calculated that 97 million tons per year could be saved. The US emits 6,010 million tons per year, so this at most saves us 0.5 to 1.6% of the CO2 we emit in total.

A self-solving problem? We’re reaching for diminishing returns with this problem with respect to CO2. It’s possible for an old car to emit orders of magnitude more SOx, NOx, or particulates than newer cars. It is not possible for an old car to emit CO2 in that way – the tail end is small and can be ignored.

Projected Costs - Buyback Assumptions 20 million vehicles $2,000 per vehicle Down payment Cost $40 billion Logistics Actual Use Current Owners Determined Buyers Poor Owners Questions? So, this slide features some of the more economic aspects of this plan. Most plans proposed or enacted to get rid of old cars offer $1,000-$3,000 in the form of a down payment on a new(ish) car. If we assume that the same 20 million vehicles are replaced as on the previous slide, that would cost $40B, pre-overhead. This is a costly program, which runs about 0.3% of GDP. There are better ways to use that resource. The logistics of the program are difficult to work out, too. Ideally, we’d want to replace frequently used old cars with new cars. We have no way to determine the actual use of the vehicle, it may be sitting idle. (Family’s old van.) The program would also simply amount to a windfall for anyone who was going to buy a car anyway. This is meant to incentivize behavior, and they needed no incentive. Also, the poor predominantly own older vehicles. They probably can’t afford to upgrade, meaning they are completely inaccessible in this plan.