Thursday, August 27, 2009

Three Modest Proposals

Buildings and transportation are the sectors of the U.S. economy that generate the most greenhouse gases. Refitting our houses, public buildings, and neighborhoods to make them sustainable will take time. It will create new industries and jobs, but it is a long-term, not a short-term solution.

Transportation is both a long-term and a short-term problem. The Cash for Clunkers program, which recently concluded, was touted partly as a way to cut fuel use, and therefore greenhouse gases. Most reports showed that it effectively cleared auto dealers' inventory but did little for fuel use or the environment.

Cash for Clunkers was a camel—a horse designed by a committee—but it is not too late for other ideas that could, if implemented, have more impact on fuel use and greenhouse gas emissions.

Herewith, three such ideas. They are simple in principle and easy to understand. They would help lower fuel use and emissions. They are not, however, camels, and because they are not, they may never make it through Congress. I present them in the order of likelihood.

  • Delivering the Goods: Driving to a store and back uses fuel. Multiply this by tens of thousands of cars, and it uses a lot of fuel. If more stores offered free delivery service, more people could avoid driving to the store and back, which in turn would economize on fuel because one delivery truck on a well-planned route uses less fuel than hundreds of cars driving to the store and back. Free delivery would also allow small businesses to compete with big box stores, which generally do not deliver. To encourage delivery services, why not offer businesses below a certain size an up-front tax credit if they provide free delivery? This would be simple to do; it would be a tax cut for the sector that generates more new jobs than any other; and it would economize on fuel.
  • Cap and Reward: Why not create a voluntary fuel-saving program for households? Households which enrolled in the program would receive a fuel card based on their annual use of fossil fuels. They would present the card each time they paid for fuel, and it would be debited according to how much fuel they used. At the end of the year a household that used less fuel than the previous year would get a tax credit for economical fuel use. There would be no penalty for going over the previous year's usage—just a strong incentive to economize. The program would be voluntary, and hence not intrusive. It would be popular—who doesn't want a tax credit? And it would almost certainly save fuel and help to cut emissions.
  • Rides for Clunkers: The original Cash for Clunkers program was designed to move cars off dealers' lots. Rides for Clunkers would try to cut fuel usage and move people to public transit. A family which traded in a high-fuel-use car for one that was more economical would, instead of cash, receive a transit card worth, say, $3000 in free rides on public ground transit, including trains, buses, and light rail. Transit riders who commute often pay less than half of this amount in a year, so the card might provide as much as two years in free rides. Those who abandoned their cars entirely and sold them for scrap would receive $6,000 in free rides. This program would require some setup, and Congress doesn't really like public transit very much, so it has the least chance of being implemented. Still, it is worth presenting for discussion.
In the long run, cutting fuel usage and emissions will become so important that, if we don't find alternatives based on incentives and attractive voluntary programs, we will almost certainly have to resort to rationing in some form. Starting now, with programs that encourage economy without coercing it, is the best way to go in a free society. Whether Congress and state legislatures will see that is quite another matter. One can only hope.

Tuesday, August 11, 2009

Cash for Clunkers: Not Very Green

The City Fix has a good roundup of reporting on the environmental effects of the popular "Cash for Clunkers" program. The conclusion? That the program will have little or no effect on overall emissions.

The clearest presentation of the arguments is in a Washington Post article by Lee Schipper, founder of EMBARQ, and his colleagues.

On the evidence so far, the program is helping car dealerships a lot. The environment, not so much.