Apparently Uncle Sam wants to sell you a car. Given auto sales are at crisis levels, Washington is working on ideas to get Americans buying cars again.

The proposal receiving the most interest would give rebates to Americans with old cars to help them buy new ones, in other words “cash for clunkers.”

Under a bill introduced by Sen. Dianne Feinstein, D.-Calif., owners of older cars would get vouchers worth thousands of dollars toward the purchase of newer, more fuel-efficient vehicle. For the costumer to get that cash, the car dealer would have to certify that the trade-in was getting scrapped and not resold. The car’s vehicle identification number (VIN) would be tracked to make sure it never shows up on a vehicle registration again.

Crushing the old car has two benefits. First, it ensures that the consumer’s purchase of a more efficient vehicle actually has a net environmental benefit. Second, it prevents a glut of used cars on the market, which would reduce trade-in values for new car buyers, which would cut into the sales incentive effect.

Many like Tyler Hamilton find the “Cash for Clunkers” program is a good, sensible idea.  However it’s not new and several States have been offering cash for clunkers.

This approach was running in BC as far back as 1996.

The first Canadian vehicle scrappage program aimed at retiring old, “live” (licensed, insured, and in running condition) vehicles was the Scrap-It program, launched in lower mainland British Columbia in 1996. Since then, other initiatives run by not-for-profit organizations have been introduced across Canada.

An example of the current program from Kelowna, Canada is the Scrap It Program

The Scrap-It Program is working to reduce greenhouse gas emissions and improve air quality by getting older vehicles off the road.  The Program offers qualifying vehicle owners incentives to scrap their older vehicle. The incentive values are based on the greenhouse gas reduction that occurs when an old vehicle is scrapped and an incentive is used as a replacement.  Incentives offered at $2000 or more are offered for the incentives with the highest greenhouse benefit. These incentives include very low emission vehicles, transit passes, or the transit pass / bicycle combination.

The BC initiative has several prominent provincial sponsors.

If you know of earlier Cash For Clunkers programs, why not mention them in the Comments.

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Post from: Senior Money Memos

Cash For Clunkers From Uncle Sam

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Barak Obama can be an inspiration to us all at many levels.  That applies even if our main concerns may be economic.  If anyone has major economic concerns at the moment, then that man is clearly Barak Obama.

It is therefore great to see that the Obama Inauguration Will Highlight Dramatic ‘Green Energy’ Agenda

President-Elect Barack Obama will take office January 20th with the strongest commitment to renewable energy of any President in history. Obama’s widely anticipated inauguration speech is expected to highlight bold new national policies to speed America’s transition to a renewable energy economy.

Three major planks here are:

• Construction of a high-voltage “interstate highway” system
• A national policy mandating America’s electric utilities to buy a percentage of their electricity from renewable sources
• Aggressive near-term targets to reduce America’s dependence upon imported oil

Wind and solar energy companies, with a year of record growth in 2008, will gain new momentum through the first 100 days as the new Obama administration implements its green agenda.

Barak Obama has assembled a strong Green team according to Daily Planet Media as it mentioned on the 8th January:

The Obama green team is headed by Professor Steven Chu, the Nobel Prize-winning physicist who is the new Energy Secretary and a strong advocate for America urgently moving towards carbon-free energy. Physicist Professor John Holdren at Harvard University will be President Obama’s top scientific advisor while professor Jane Lubchenco – a leading expert on the effects of global warming on oceans – will be the first woman administrator of the National Oceanic and Atmospheric Administration.

Carole Browner who headed the Environmental Protection Agency under President Clinton, and known for her more radical views, will lead a White House energy and climate unit. The newly appointed Labor Secretary congresswoman Hilda Solis, a strong advocate for green employment, will be a key person for planning and implementing a clean energy economy.

However despite the hopes there are skeptics:

Some analysts questioned Obama’s ability to boost spending on higher-cost renewable fuels during a recession.

“It will be more difficult to meet the alternative fuel goals if oil prices keep falling and we are in a recession,” said Phil Flynn, oil analyst with Alaron Trading in Chicago.

It will take political finesse to implement the plan, said Tim Evans, an energy analyst at Citigroup in New York.

“All of the details of whatever policy he wants will be heavily negotiated in the legislative arena,” Evans said.

Although there can be knee-jerk reactions when one hears the word green, that attitude can hopefully change.  Sometimes the green solution can be a positive boost to the economy. That is as true at the national level where Barak Obama must decide as it can be at the domestic level where each of us should step lightly on the earth.

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To Boldly Go … Green

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