Automobile makers and dealers apparently want the federal government to pay people $3,500 if they give up an old car and get a new one. What industry wouldn’t want that? I am sure Sony would like the government to give $1,000 grants to anyone buying a new laptop, just like Apple would appreciate $200 grants for those replacing music players. The only justification for such a public subsidy is that the environmental damage done by the new cars will be lessened to an extent worth more than $3,500 to society at large.
Here are two ideas I think would be better:
- Offer anybody $500 in exchange for recycling any car, regardless of whether they get a new one or not. This would both lead to a reduction in the total number of vehicles out there (especially those in a very poor state of repair) and set a floor price on used-car sales. After all, nobody would sell a car for less than $500 if the government would give them that much to scrap it.
- Offer grants if people recycle and old car and buy a zero-emission vehicle, with the amount increasing along with the efficiency of the vehicle per passenger-kilometre. For instance, trading in a car might get you a $500 credit towards a bicycle, a smaller credit towards an electric scooter, and an even smaller credit towards an electric car.
Of course, the supporters of either of these approaches are a lot less politically influential than car companies and car dealers, making it unlikely that any government would embrace these approaches. Still, I hope this doesn’t emerge as yet another policy designed to extend the lifespan of yesterday’s carbon-intensive transport, production, and consumption. What we need are policies to help drive the economy towards modes of energy production and use that are sustainable and compatible with a stable climate.