The 'Cash for Clunkers' Program: A Sustainability Evaluation

Abstract

This article describes and evaluates the effectiveness of the Consumer Assistance to Recycle and Save Act of 2009, also known as the “Cash for Clunkers” legislation. Under this law, Congress authorized persons trading in older and less fuel-efficient motor vehicles for newer and more fuel-efficient vehicles to receive a voucher worth up to $4,500 toward the purchase of the new vehicle. The article reviews various studies assessing the effectiveness of this legislation based on economic, social, and environmental criteria. It then identifies five key lessons from this legislation: (1) the use of environmental protection to achieve economic development; (2) the importance of reliable sustainability indicators; (3) the potential for citizen engagement to drive improvements in energy efficiency and greenhouse gas reductions; (4) the possibility of rapid change toward sustainability; and (5) the key role of financial sustainability.

Keywords: energy efficiency, energy conservation, climate change, sustainable development, sustainability, energy consumption, greenhouse gas emissions, Consumer Assistance to Recycle and Save Act, “cash for clunkers,” clunkers, fuel efficiency, motor vehicles

JEL Classification: K10, K20, K29, K32, K33, Q20, Q21, Q28, Q30, Q31, Q38, Q40, Q41, Q43, Q48, Q54, Q58, Q01