Adam Smith would love it. Say a factory must reduce its nitrogen oxide (NO,) emissions by 130,000 pounds a year. And say it will cost $1 million to do that by installing scrubbers on its smokestacks. If the factory buys 1,000 old cars for an average $700 each, and if each car spews out 130 pounds of NOx a year, the company will have met its clean-air mandate and saved $300,000 in the bargain. People who sold their old clunkers could buy a cleaner, later-model car. That’s how it worked in 1990 in California, when Unocal bought 8,376 pre-1971 cars for $700 a piece.“We were swamped” with would be sellers, says Mike Riehle, who ran the pilot program. The junked cars accounted for nearly 13 million pounds of emissions per year as much as the hydrocarbons from 250,000 new cars, one large oil refinery, or all the barbecue lighter fluid used in the Los Angeles basin. In the federal program, the price of an old car would be determined by market conditions. The dirtier the car, the more it would be worth to a polluter.
Such “green economics” has become as trendy as recycling newspaper. Next year southern California will allow factories to meet clean-air standards by buying pollution credits from companies that exceed their mandated emissions cuts. Still, although using market forces to clean up the planet has found support in Congress, the administration and even among environmental groups cash-for-clunkers has its detractors. Dan Becker of the Sierra Club calls it “the Cheshire Cat approach. Pollution from the car will continue after the [car] has disappeared”-because the car’s “quota” is now coming from the smokestack of the buyer, who can avoid cleaning up his own act. But there is no debate that old cars make a tempting target. The 37.6 million cars that predate 1980 are responsible for 86 percent of the smog-making gases from autos, but represent only 38 percent of the fleet; the 5.9 million dirtiest cars cause a whopping 50 percent of all hydrocarbons. Next up for the green marketeers: giving companies pollution credits if they switch to alternative-fuel fleets. Capitalism may turn out be an environmentalist’s friend after all
