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Cash for Clunkers: The Bus Version

Posted By Nicolas Loris On October 16, 2009 @ 4:12 pm In Economics | Comments Disabled

TIGGER: It’s not just a character from Winnie the Pooh. It also stands for the Department of Transportation’s Transit Investments for Greenhouse Gas and Energy Reduction or in other words: cash for buses. The DOT [1] “has spent nearly half its $100 million grant budget to replace diesel buses with cleaner and more efficient hybrid-electric and fully electric models. Like Cash for Clunkers, these grants are intended to be dual-purposed: stimulate the economy and clean the environment.”

And like cash for clunkers, it will most likely do neither. Although Secretary of Transportation Ray LaHood believes “investing in green transportation not only helps the planet, but creates jobs and strengthens our economy”, one should take a look at how the cash for clunkers program fared. Yes, consumers took advantage of the taxpayer-funded handout to buy a new car while completely destroying their old one, but after the subsidy program ended so too did car sales. Sales in September for Chrysler, Ford and GM plummeted [2].

Many questioned the environmental benefits of cash for clunkers when considering new cars and cars with better fuel efficiency are driven more not to mention the environmental costs of destroying the car. The program failed to create jobs [3]and did not increase sales of cars but instead affected the timing of those sales.

We’re hearing much of the same with the TIGGER program, which is part of the larger stimulus package signed into law in March [1]:

“Yet job creation isn’t necessarily attributable to the TIGGER program alone. Eight of the participating transit agencies were planning to buy buses of some kind anyway — the grant money just enabled them to upgrade to clean-tech models. Of the agencies that made new orders with the grant money, many of them said they were simply expediting existing multiyear plans to replace older diesel buses with cleaner technology.”

Cost-effective [1]?

“”They do improve emissions somewhat,” said Michael Sanders, transit administrator for ConnDOT’s Bureau of Public Transportation. But he suggested that the agency wouldn’t have invested in the pricier hybrids without the federal money. “They’re not dollar-for-dollar cost-effective in hard cash,” he added. “The difference is public relations, emissions reductions.”

Henry Jacoby, co-director of the Joint Program on the Science and Policy of Global Change at MIT, was an outspoken critic of the Clunkers program. He calculated that each ton of carbon reduced cost the government more than $160 — an expensive way to reduce emissions. “Cash for Clunkers was… being sold as a program to cut greenhouse gas emissions, but that’s not what it was for,” he added. “It was a program to help the auto industry.” He was similarly skeptical of bus replacement as a cost-effective way to reduce emissions.”

It’d be much better if TIGGER were just a character on Winnie the Pooh and not a taxpayer handout for bus companies.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/10/16/cash-for-clunkers-the-bus-version/

URLs in this post:

[1] DOT: http://energytopic.nationaljournal.com/2009/10/cash-for-clunkers.php

[2] plummeted: http://www.foundry.org/2009/10/02/cash-for-clunkers-comes-crashing-down/

[3] failed to create jobs : http://www.foundry.org/2009/09/04/cash-for-clunkers-failed-to-create-auto-jobs/

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