Clunkers: That which is unseen.

Gwen Ottinger of the Chemical Heritage Foundation’s Center for Contemporary History and Policy in Philadelphia — and boy is that a mouthful — appears to be one of those rare environmentally conscience persons who also happen to have common sense. “Keep your clunker,” says Gwen, it’s better for the economy and the environment:

First, even when new cars and appliances are more efficient than the ones they replace, the act of replacing them entails environmental costs not accounted for in the stimulus programs. Building a new car, washing machine or refrigerator takes energy and resources: The manufacture of steel, aluminum and plastics are energy-intensive processes, and some of the materials used in durable goods, especially plastics, use non-renewable fossil fuels as feedstocks as well as energy sources. Disposing of old products, a step required by most incentive and rebate programs, also has environmental costs: It takes additional energy to shred and recycle metals; plastic components often cannot be recycled and end up as landfill cover; and the engine fluids, refrigerants and other chemicals essential to operating products end up as hazardous wastes.

Policies that encourage purchases of energy-efficient products may also increase, rather than decrease, energy use by confusing efficiency with consumption. For example, Energy Star refrigerators, which now qualify for rebates in many states, are certified to be 10 to 20 percent more efficient than “standard” models. Yet the Energy Star rating is awarded overwhelmingly to refrigerators far larger than would have been the norm two decades ago, and smaller models of refrigerator, which use less energy simply because they have a smaller volume of air to cool, were not even included in the Energy Star program until 2002. Consumers who wish to benefit from environmentally friendly stimulus money, then, are pushed toward purchasing “efficient” but relatively large models rather than being encouraged to opt for the smallest refrigerator, with the smallest energy demands, that meets their needs.

Beyond these concrete environmental drawbacks, product-replacement policies also send a message that old things are dirty and inefficient, while new ones are necessarily green and efficient. Under the Cash for Clunkers program, for example, old cars must be traded in for new ones. Yet plenty of used cars exceed the required 22 mpg: The Toyota Prius hybrid, on the market since 2001, gets upward of 40 mpg, and even a 15-year-old Honda Civic gets 28. By assuming that only new products can be environmentally friendly, these policies lead us to discount the environmental gains that could be made through well-established and low-tech means, such as smaller refrigerators. They also reinforce the idea that all products, even “durable goods,” quickly become obsolete — a notion that leads to overwhelming amounts of environment-despoiling waste.

All good points, and reminiscent of the 19th century’s “Broken Window” policy, which Frédéric Bastiat debunked in That Which Is Seen and That Which Is Unseen — the boy who breaks the shopkeeper’s window, went the fallacy, is actually helping the economy because the shopkeeper must replace the window, helping out the vendors for that, who in turn spend that profit on other needs, etc.

Bastiat:

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

And so, it is not seen that the now proposed $3 billion dollar program takes from the taxpaying population $3 billion they might have spent on other things. The folly of Keynesian economics continues…