The Free Market
War on Clunkers, The
The Free Market 14, no. 9 (September 1996)
If there's anything a government bureaucrat hates more than the unhampered market, it's the automobile. He'll do anything to take it away from people, though of course he'll couch his true intentions in euphemistic banalities about "cleaning up the air."
So-called "clunker" laws are a case in point. They have been sprouting up like fungi after a rain. They use tax dollars to finance the removal of cars built before the advent of modern computerized emissions controls. The theory is that these "clunkers" are the largest contributors to our smog problem.
In truth, clunker laws are not about improving the quality of the air. They are about giving huge government subsidies to big industrial polluters—coal-burning utility companies mostly—in the guise of a "free-market" solution to air pollution.
As usual, the problem originates in Washington. Federal mandates stemming from the ill-conceived 1990 amendments to the Clean Air Act require states to meet an arbitrarily set air quality standard. Otherwise, they face losing funding for highway construction and maintenance.
The portion of the Act that specifically threatens old automobiles is the provision mandating reductions in mobile sources. That's bureaucratic cant for car and truck emissions at levels to be set by the Environmental Protection Agency in "non-attainment areas." Non-attainment areas are parts of the country—cities mostly—which do not meet the standards set forth in the act.
Since old cars, derisively referred to as clunkers, are highly visible and easily portrayed as mobile bilge barges, they are an attractive target for state governments seeking to find ways to meet the federal government's requirements.
The schemes run the gamut, from programs that provide incentives for people to trade in their older cars to elaborate, transferable emissions credits. Under these, large industries avoid compliance with emissions requirements if they help get old cars off the road.
Granting emissions credits to smokestack industries as a market-oriented way to get clunkers off the road. But granting what amounts to a pollution subsidy to heavy industry is more akin to central planning a la Soviet Russia than anything Murray Rothbard might have come up with.
In actuality, these schemes merely shift the source of pollution around like some elaborate shell game, and thus do nothing to improve overall air quality. After all, does it matter if the source of smog is your neighbor's 1956 Plymouth—or the incinerator five miles down the road?
A bill recently introduced by GOP luminary Sen. Arlen Specter of Pennsylvania would have encouraged new car dealers to destroy pre-1980 model cars received as trade-ins. In return, the manufacturer would receive a credit towards its corporate average fuel economy (CAFE) requirements.
Other bills under consideration have pushed for the removal of pre-1980 model cars through similar "incentive" programs. None of these laws have yet been passed, but the worry is that it's only a matter of time.
It's funny to reflect that government types actually believe that substituting one bureaucratic boondoggle for another (say, CAFE credits for emissions credits) constitutes the unfettered marketplace doing its thing. These are the same people who have gotten into the habit of referring to captive citizens as "customers" on income-tax forms.
Present efforts to get old cars off the road are mostly voluntary, and only involve the usual waste of tax dollars. The fear among car collectors is they may soon become mandatory as states are faced with the loss of federal revenue and other strongarm tactics from the EPA.
Clunker programs in California, Virginia, and other states have met with vociferous opposition from older car owners. They rightly believe that politically powerful industries are avoiding having to comply with environmental and emissions standards themselves. In return, they sock it to the collector, the young person who cannot afford a newer car, and the family of modest means.
The emissions credit plan is especially galling. Say a large textile company buys up 100 pre-emissions controlled cars (1968 model year and earlier) and has them crushed. That company is then given an exemption or credit which permits it to spew its own pollution in an amount equal to the reduction achieved by the elimination of the 100 old cars.
Crushing older cars might be justifiable if, indeed, they were indeed poisoning the population with fumes. But they are not. A handful of older cars may emit higher levels of carbon dioxide, volatile organic compounds, and oxides of nitrogen, the principle components of smog. But when tuned properly, most have levels of exhaust emissions comparable to or exceeding that of post-1981, computer controlled, and fuel injected cars.
Further, the number of classic, antique, and other special interest pre-emissions cars in circulation is quite small. How many 1963 Cadillacs do you see? By their very nature, old cars don't rack up a lot of miles. It's unfair to single them out as significant contributors to the pollution problem.
Moreover, it's not true that a computer controlled car will always pollute less than a pre-emissions car. Modern cars rely on a vast array of extremely complex and interrelated systems, all governed by a computer. There are dozens of sensors and relays which must work perfectly for the car to be clean running.
Should a critical part fail—the oxygen sensor, for example—the resultant emissions could be significantly higher than a pre-emissions vehicle. Any mechanic worth his socket set knows this is true. But of course the people writing regulations never consult anyone who knows anything about the issue.
Another problem is the high maintenance cost of late model cars and trucks. In the real world, poor people coerced into trading in their old cars in favor of new ones would probably not be able to afford to keep them up properly. The end result is no net reduction in emissions.
The bottom line in this debate is not over clean air. It's another case of arrogant federal and state regulators with the wrong motive and incentive, spewing out misguided, expensive, and ultimately futile laws. We expect this from our government. But why do they insult our intelligence by claiming they're following the principles of the free market?
Cite This Article
Peters, Eric. "The War on Clunkers." The Free Market 14, no. 9 (September 1996).