Why Feebates Would Work Better Than Cash for Clunkers

My first car was not a "clunker." That would be too dignified a description.

It was a 1957 Volkswagen bug. I hated that car.

There was the incident when its accelerator cable broke in the middle of the Mojave Desert. I had to rig up a string from the rear-mounted engine and pull it through the driver's window in order to operate the throttle. Not fun on a brittle high desert night. Did I mention that the car lacked a heater?

Then, there was the time I flipped the switch to turn off the headlights. The headlights stayed on. I disconnected the wiring connecting the switch to the headlights. The headlights stayed on. And drained the battery. Which was under the rear seat, leaked acid, and cut an L-shaped hole in the floorboard.

If I turned in that car in the "cash for clunkers" deal, I would return the $4,500 payoff to the dealer in gratitude for taking the deathtrap off my hands.

Thankfully, the '57 bug is long gone. Back to the present. Is "cash for clunkers" a good deal for the environment? The impact seems marginal. It's good to see people turning in gas hogs and replacing them with gas sippers. Likely, however, they would have bought new cars anyway once the economy improves and credit loosens up. The incentive brought forward the transactions.

Another problem is that destroying vehicles that are reservoirs of usable parts is wasteful. Lots of poor folks drive fixer-upper cars that depend on boneyard parts for repairs. And those parts contain embedded energy that's wasted if they're junked while they still have some life in them.

A better idea is contained in a bipartisan bill called the Efficient Vehicle Leadership Act, sponsored by Senators Bingaman, Lugar, Snowe, and Kerry. It would establish "feebates" that would reward consumers for buying cars that beat CAFE fleet efficiency standards and charge them a fee for buying cars that fall short of CAFE.

The more a car beats CAFE, the bigger the refundable tax credit (or reduction from the purchase price, if the buyer chooses that option). The more a car falls short of CAFE, the bigger the fee.

There are several advantages to this approach. One is that it sends a market signal about the environmental and geopolitical costs of petroleum dependence.

Another is that the government wouldn't anoint technology winners, but would let competing technologies duke it out in the marketplace.

Third, it would minimize the bureaucratic hustle that bogged down "cash for clunkers" and its crashing web site.

Fourth, if the bill works as intended, it would be more or less revenue-neutral. The fees would pay for the rebates. Those who buy gas hogs would, in effect, write checks to their neighbors who buy more fuel-efficient vehicles.

Freedom to choose would be left with consumers. Motorists who want a gas guzzler could have a gas guzzler. They would have to take responsibility for making that choice, however, by paying for the privilege of disposing of large quantities of CO2 into the atmosphere and of enriching petro-funded crooks and crazies.

To wax philosophical for a bit, the premise of feebate is conservative in the traditional sense of the word. Talk radio yobs who have appointed themselves the arbiters of conservatism often sneer at fuel efficiency, as they conflate freedom with materialistic self-indulgence. If it feels good, do it, baby.

But traditional conservatism doesn't conceive of freedom as a libertine thrill ride that is free of consequences. Freedom has an inseparable sibling – responsibility.

Taking responsibility for our energy choices is the first step to making better ones.