Australia learns a lesson from USAs Cash for Clunkers
A “cash for clunkers”, a program that is being contemplated by the Gillard government to implement in Australia has been reported. The cash for the said program is going to come from the funds for the solar power. People have been watching on the USA for the results of the said program which aims to reduce carbon emission. In the end, the results indicated that it was not the desired outcome.
Known as the Car Allowance Rebate System in America (CARS) or the “Cash for Clunkers”, the US government has provided $3 billion for the said program to be bale to provide incentives to its citizens to buy a new, more fuel-efficient vehicle as they trade in a less fuel-efficient vehicle. The said program was designed to hit two birds in one stone, so to speak, by acting as an economic stimulus and to reduce carbon emission as well.
Prime Minister Julia Gillard announced in July that Australia is also to have its own “cash for clunkers” program which will be known as Cleaner Car Rebate in the event that Labor is to return to power. The funds for the new program will come from the reductions that will be made from the existing schemes which are also aimed at carbon emission reductions. Some of these programs include the Solar Flagship and the Renewable Energy Bonus scheme which get $370 million.
The CARS of USA gained popularity as it was launched in July 1, 2009 and when it ended on August 24, analysis of the incentives scheme showed that the said program was not as successful as it was expected to be.
As stated by Atif R. Mian of the University of Berkely and Amir Sufi of the University of Chicago in a study that they conducted, the said program was able to generate the purchase of an additional 360,000 cars in the months of July and August of last year. However, almost all of the additional purchases as a result of the said program were sales that were seen to occur in the coming years. They further stated that the effect of the incentive on auto purchases was almost completely reversed in the first seven months after the program has ended due to the major drop in car sales that followed the scheme.
Nineteen major Australian energy companies called for a price on carbon to be introduced in the nearest time possible last Friday. The Clean Energy Council was stated to release an open letter addressed to major political parties who were backed by many of the nation’s top energy companies.
