(Source: AP via NPR)

President Barack Obama signed into law a $2 billion extension for the popular “cash for clunkers” program Friday morning.

The Senate voted to refill the popular car incentive program Thursday, tripling the $1 billion fund that has led to big crowds at once deserted auto showrooms. President Obama signed the bill Friday, extending the program into Labor Day and preventing the 2-week-old incentives from running out.

Car shoppers caught up in the frenzy of the program will have more time now and a $2 billion reason to trade in their old gas guzzlers.

The program gives new-car buyers up to $4,500 toward their purchase if they trade in a less fuel-efficient car or truck. So far, 8 in 10 of the vehicles traded in have been trucks. The three Detroit automakers’ nameplates have accounted for 45 percent of the new-car sales.

Auto industry analyst Aaron Bragman of IHS Global Insight said it was unlikely that demand will remain as high as it is now. Many people who qualified have already bought cars and while the rebates are expected to boost total vehicle sales in 2009, Bragman predicted lower sales next year because many customers have already taken advantage of the incentives.

“You are not going to see a continuation of the frenzied sales pace,” Bragman said. “I don’t think they will use up that money any time soon.”

Click here to read the entire article.

(Source: NPR)

Pedal to the metal, Congress sent President Barack Obama legislation Thursday night with an additional $2 billion for “cash for clunkers,” the economy-boosting rebate program that caught the fancy of car buyers and instantly increased sales for an auto industry long mired in recession.

The Senate approved the money on a 60-37 vote after administration officials said an initial $1 billion had run out in only 10 days. The House voted last week to keep alive the program, which gives consumers up to $4,500 in federal subsidies if they trade in their cars for new, more energy-efficient models.

Without action, lawmakers risked a wave of voter discontent as they left the Capitol for a monthlong vacation.

Supporters of the program hailed its effect on the auto industry — which had its best month in nearly a year in July — as well as its claimed environmental benefits.

“The reality is this is a program that has been working. Consumers believe it’s working. Small-business people believe it’s working. People who make steel and aluminum and advertisers … and everyone who’s involved in the larger economic impact of the auto industry believe it is working,” said Sen. Debbie Stabenow (D-MI).

The legislation had its share of critics, though, most of them Republicans.

“What we’re doing is creating debt. … The bill to pay for those cars is going to come due on our children and grandchildren,” said Sen. Judd Gregg (R-NH).

Officials said the program’s initial $1 billion probably already has been spent, but a paperwork backlog prevented an accurate accounting. The additional $2 billion is enough to help consumers purchase a half-million more new cars, they added.

There was no suspense about the outcome in the Senate, where supporters of the legislation focused their energies on defeating all attempts at amending the measure. Passage of any changes would effectively scuttle “cash for clunkers,” they said, since the House has already begun a summer vacation and is not in session to vote on revisions.

An attempt by Sen. Tom Harkin (D-IA) to limit the program to lower and middle-income consumers was jettisoned on a vote of 65-32. Gregg’s call for Congress to offset the $2 billion with spending cuts elsewhere also failed, 51-46.

The Senate’s debate capped an unusually swift response by lawmakers, who were informed scarcely a week ago that the program was quickly running short of money.

Click here to read the entire article.

(Source: Fortune Magazine via CNN Money)

When lunch break comes at the construction site between Shanghai and Suzhou in eastern China, Xi Tong-li and his fellow laborers bolt for some nearby trees and the merciful slivers of shade they provide.

It’s 95 degrees and humid — a typically oppressive summer day in southeastern China — but it’s not just mad dogs and Englishmen who go out in the midday sun.

Xi is among a vast army of workers in China — according to Beijing’s Railroad Ministry, 110,000 were laboring on a single line, the Beijing-Shanghai route, at the beginning of 2009 — who are building one of the largest infrastructure projects in history: a nationwide high-speed passenger rail network that, once completed, will be the largest, fastest, and most technologically sophisticated in the world.

Creating a rail system in a country of 1.3 billion people guarantees that the scale will be gargantuan. Almost 16,000 miles of new track will have been laid when the build-out is done in 2020. China will consume about 117 million tons of concrete just to construct the buttresses on which the tracks will be carried. The total amount of rolled steel on the Beijing-to-Shanghai line alone would be enough to construct 120 copies of the “Bird’s Nest” — the iconic Olympic stadium in Beijing.

The top speed on trains that will run from Beijing to Shanghai will approach 220 miles an hour. Last year passengers in China made 1.4 billion rail journeys, and Chinese railroad officials expect that in a nation whose major cities are already choked with traffic, the figure could easily double over the next decade.

Construction on the vast multibillion-dollar project commenced in 2005 and will run through 2020. This year China will invest $50 billion in its new high-speed passenger rail system, more than double the amount spent in 2008. By the time the project is completed, Beijing will have pumped $300 billion into it.

This effort is of more than passing historical interest. It can be seen properly as part and parcel of China’s economic rise as a developing nation modernizing at warp speed, catching up with the rich world and in some instances — like high-speed rail — leapfrogging it entirely.

Last November, as the developed world imploded — taking China’s massive export growth and the jobs it had created with it — Beijing announced a two-year, $585 billion stimulus package — about 13% of 2008 GDP.

Infrastructure spending was at its core. Beijing would pour even more money into bridges, ports, and railways in the hope that it could stimulate growth and — critically — absorb the excess labor that exporters, particularly in the Pearl River Delta, were shedding as their foreign sales shrank more than 20%.

At a moment when the developed world — the U.S., Europe, and Japan — is still stuck in the deepest recession since the early 1980s, China’s rebound is startling. And the news comes just as Washington is embroiled in its own debate about whether the U.S. requires — and can afford — another round of stimulus, since the first one, earlier this year, has thus far done little to halt the downturn. Tax cuts made up about one-third of the $787 billion package, and only $60 billion of the remaining $500 billion has been spent so far.

Proponents of more stimulus are likely to cite China’s example of what a properly designed stimulus program can accomplish. Maybe so. But a closer look at China’s high-speed rail program also reveals some risks that should factor into the “Why can’t we do that?” debate that’s surely coming in Washington.

Last year China Railway Construction Co., the nation’s largest railroad builder, hired 14,000 new university graduates — civil and electrical engineers mostly — from the class of 2008. This year, says Liang Yi, the vice CEO of the CRCC subsidiary working on the Beijing-to-Shanghai high-speed line, the company may hire up to 20,000 new university grads to cope with the company’s intensifying workload. But with the private sector cutting way back on hiring — and university students desperate for work — taking on that many new engineers and managers hasn’t been too difficult.

Consider that the Northeast Corridor, between Boston and Washington, D.C., is served by Amtrak’s Acela train, which clips along at a stately average speed of 79 miles an hour. There’s a lot of talk now, as part of President Obama’s stimulus plan, about upgrading the system and building new, faster lines all across the nation. In his stimulus bill Obama has allocated $8 billion over three years for high-speed rail, and 40 states are now bidding for the funds, with results to be released in September. Among the possibilities, California wants to link San Francisco with L.A. via a high-speed link. Senate Majority Leader Harry Reid (D-Nev.) wants the private sector to get into the act, proposing a high-speed spur to connect Las Vegas with L.A.

Click here to read the entire article.

(Source: Fortune)

President Obama may call a nationwide high-speed passenger rail network a priority, but it’s going to take a lot more than $8 billion to make it happen.

Though Thomas the Tank Engine earned a loyal following of American children in the 1980s and 1990s through his popular PBS television show, real trains have long been out of favor with the American public. Even Thomas was a British import.

Indeed, the fact that an early 20th-century steam locomotive — and not a sleek, high-speed model — so captured the modern young American imagination is an apt commentary on the state of train travel in the United States: The country lags years behind some of its peers.

America has 457 miles of high-speed track from Boston to Washington, D.C. In Japan, by comparison, trains netting speeds up to 188 miles-per-hour cross 1,360 miles of track; France features 1,180 miles of rail to support trains that can travel up to 199 miles-per-hour; and, as Bill Powell’s article, “China’s Amazing New Bullet Train,” shows in the latest issue of Fortune, China aspires to dart even farther ahead with its $300 billion high-speed rail project.

But President Barack Obama hopes to bridge this gap, emphasizing the importance of developing a nationwide high-speed rail network in several of his speeches. Just a month into his tenure, the President successfully urged Congress to dedicate $8 billion of February’s stimulus funds towards the system’s development.

“What we need … is a smart transportation system equal to the needs of the 21st century,” Obama said in a speech in April, the same month the Federal Railroad Administration released its prospectus for the high-speed program, “Vision for High-Speed Rail in America.” “[We need] a system that reduces travel times and increases mobility, a system that reduces congestion and boosts productivity, a system that reduces destructive emissions and creates jobs,” Obama continued in phraseology typical of his rhetoric. But it remains to be seen whether the U.S. government can translate “talk” into “walk” when it comes to high-speed rail.

Last month, 40 states — both individually and in groups — submitted 278 pre-applications for various stimulus-funded high-speed passenger rail projects, amounting to $102.5 billion in requests. Final applications are due August 24, and the FRA will begin distributing funds in September.

Click here to read the entire article. (Hat tip: WTSLosangeles@Twitter)

(Source: BBC)

For five days, millions of people in the Indian city of Calcutta have endured long queues in the stifling heat at bus and taxi stands, metro railway counters and on auto-rickshaw routes.

They are braving both the humidity and the rain in the hope that what has been termed the city’s “great transport mess” will finally be cleared up.

While the difficulties of getting from A to B may be greater now than at any time over the last two decades, the air of the city is much cleaner than before 1 August.

That was when police started seizing all pollution-emitting pre-1993 vehicles to ensure they are kept off the roads in keeping with a Calcutta High Court order.  The decks were cleared for the government to seize the buses, mini buses, taxis and auto rickshaws after the Supreme Court Friday refused to stay the high court order banning commercial vehicles built before 1993.

Police and Rapid Action Force personnel were deployed in large number to prevent disturbances, as security personnel moved alongside motor vehicles department officials to identify the banned vehicles on the city streets.

Nearly 4,000 private buses, 6,800 taxis and more than 95 percent of the total fleet of 65,000 auto-rickshaws have been barred from the Kolkata Metropolitan Area following the court order.

Meanwhile, following main opposition Trinamool Congress chief and Railways Minister Mamata Banerjee’s accusation that government departments like the police as also the Kolkata Municipal Corporation were running vehicles over 15 years old, Police Commissioner Goutam Mohan Chakraborty said the city police have decided not to deploy such vehicles.

A survey done by the Calcutta-based Saviour and Friend of Environment (Safe) says that around the city’s four most polluted intersections – the Dunlop crossing, the Shyambazar five-point crossing, Park Circus and the Rashbehari Avenue-SP Mukherjee Road crossing – hydrocarbon levels more than halved.

Auto-rickshaw drivers have tried to keep public transport off the roads

That is important because high hydrocarbon levels have been blamed for an increase in liver and kidney illnesses as well as higher level of cancer.

With less traffic on the roads, the oxygen count shot up by around 15 to 20%, leading to a drop in the percentages of carbon dioxide and carbon monoxide.

Suspended particulate matter, the main cause of bronchial diseases that makes Calcutta the asthma capital of India, dropped by 50%.

“Calcutta is back to low pollution levels it enjoyed until about 20 years ago,” said Safe’s convenor, Sudipto Bhattacharya.

“The vigil has to continue and none of the 15-year-old vehicles or those older should be allowed to go back on to the streets.”

Mr Bhattacharya said that Safe’s findings vindicated the green activists’ stand against older vehicles.

Many other fresh air fans agree with him.

“The sharp drop in the hydrocarbon level proves that older vehicles are the major culprits,” said green activist Subhas Datta, who lobbied the city’s high court to seek the withdrawal of all vehicles older than 15 years.

“They emit unburnt fuel into the air that pushes up the hydrocarbon level to dangerous levels. Let us hope that Calcutta will breathe freely from now on.”

Back in February Calcutta Tramways announced that it would running the buses it operates on a B20 biodiesel blend — a move which, while motivated by financial reasons, is expected to cut pollution from the buses by 35%

Click here to read the entire article.

(Source: NY Times & BBC)

Violent, fiery clashes between the police and workers at a South Korean auto factory ended on Thursday after the company agreed to keep half the workers at the plant rather than lay them all off in a restructuring, union and company officials said.

After the concession by Ssangyong Motor Company, South Korea’s fifth-largest automaker, the workers agreed to end their 77-day occupation of the plant, which had virtually become war zone. The confrontation was closely monitored by foreign investors as a test of will both for South Korean unions, known for their militant activism, and for President Lee Myung-bak’s government, which has vowed to ensure more “flexibility” for companies to shed workers at times of economic distress.

Picking his way past the ranks of riot police and the barricaded factory gates, it was Ssangyong’s chief financial officer who came out to break the news to the waiting journalists.

“The 77-day strike is over,” he said.

“Are you relieved?” asked the a reporter.

“It may have come a bit late,” he replied, “but we’re glad it has ended peacefully.”

“We are relieved that we have avoided the worst-case scenario,” said Lee Yoo-il, a court-appointed top manager of Ssangyong. “We hope this is the beginning of reviving our company.”

In a series of raids this week on the plant, about 40 miles south of Seoul, police commandos rappelled from helicopters as workers hurled firebombs. Hundreds were injured. By Wednesday, the police had overrun most of the facility and cornered 500 workers in a paint shop filled with flammable liquids.

Outside the plant, sporadic clashes continued even after the deal was signed. Non-union workers and burly men hired by management for security beat at least one journalist and a few union sympathizers while police officers looked on. One man, with blood flowing from his face, was carried away in an ambulance. Some in the crowd cursed the police, saying they were slow to intervene.

It is the smallest of South Korea’s car makers, and it specialises in making gas-guzzling sports-utility vehicles, including a car often cruelly championed by reviewers for its ugliness, the Rodius. Its niche did not make it best-placed to ride out the global recession.  Ssangyong filed for bankruptcy protection in January as sales fell and debt mounted. Some 2,000 workers have since left the company voluntarily. The company announced a restructuring and cost-cutting program in April that called for the layoffs of 36 percent of the company’s remaining work force, including all 970 workers at the plant here. The workers began occupying the plant on May 22.

Earlier this year Ssangyong’s Chinese backer, the Shanghai Automotive Industry Corp, gave up management control and it went into receivership.  The court-appointed managers insisted that for the company to survive they needed to lay off more than 2,500 staff, a third of the total workforce. And that is when the real trouble began.

Many workers did choose temporary redundancy, but 600 of those earmarked for the sack took to the barricades.   “It is bad management and their bad decisions that have caused the problems, but only the workers who are facing the consequences,” said one worker.

The management had attempted to reach a compromise, promising to guarantee 40% of the strikers’ jobs in return for their surrender, but the union stuck to its demand for all jobs to be saved. In the end, the deal they are reported to have accepted does not look all that different to the one on offer earlier.

The compromise between the union and management, which will retain 48 percent of the jobs at the factory, diffused further violence. As the news of the deal spread, workers’ family members and supporters gathered at the factory gates. The workers began to leave the factory on police buses. They were greeted by supporters holding placards and banners and singing labor songs as they stepped off the buses in downtown Pyeongtaek, and workers hugged their tearful wives and children.

Click here or here to read the entire article.

(Source: Government Accountability Office)

Why GAO Did This Study

The New Starts program is an important source of new capital investment in mass transportation. To be eligible for federal funding, a project must advance through the different project development phases of the New Starts program, including alternatives analysis, preliminary engineering, and final design. The Federal Transit Administration (FTA) evaluates projects as a condition for advancement into each project development phase of the program. FTA has acted recently to streamline the process. This report discusses:

1. The time it has generally taken for projects to move through the New Starts process and what Congress and FTA have done to expedite the process and
2. Options that exist to expedite the process.

In response to a legislative mandate, GAO reviewed statutes, FTA guidance and regulations, and project data. GAO also interviewed Department of Transportation (DOT) officials, projects sponsors, and industry stakeholders.

What GAO Recommends

GAO recommends that DOT consider options to expedite project development and continue to improve its data collection efforts. DOT agreed with the first recommendation but not the second, which GAO revised to better reflect FTA’s efforts to date and the ongoing need for complete and reliable data to help strengthen the program.

What GAO Found

Insufficient data are available to describe the time it has taken for all projects to move through the New Starts process. Nevertheless, 9 of 40 projects that have received full funding grant agreements since 1997, and had complete data available, had milestone dates that ranged from about 4 to 14 years to complete the project development phases. However, the data from these 9 projects are not generalizeable to the 40 New Starts projects.

FTA has not historically retained all milestone data for every project, such as the dates that project sponsors apply to enter preliminary engineering and FTA’s subsequent approval. Although not required by its records retention policy, FTA has retained milestone data from some projects longer than 2 years. However, GAO was unable to obtain complete and reliable project milestone data from FTA.

FTA officials acknowledged that, while not historically perfect, the agency has retained sufficient milestone data to help manage the New Starts program. Nevertheless, recognizing the importance of having complete milestone data, FTA has taken several steps in recent years to more consistently collect and retain such data. In addition, GAO found that project sponsors do not consistently retain milestone data for projects that have completed the New Starts process.

Congress and FTA have taken action to expedite projects through the New Starts process. For example, legislative action created the Public-Private Partnership Pilot Program (Penta-P) to study the benefits of using public-private partnerships for certain new fixed-guideway capital projects, such as accelerating project delivery. In addition, FTA has implemented administrative changes to expedite the New Starts process. For example, FTA has developed and offered training workshops for project sponsors and has introduced project delivery tools. These tools include checklists for project sponsors to improve their understanding of the requirements of each phase of the New Starts process.

Project sponsors and industry stakeholders GAO interviewed identified options to help expedite project development within the New Starts program. These options include tailoring the New Starts evaluation process to risks posed by the projects, using letters of intent more frequently, and applying policy and guidance changes only to future projects. Each option has advantages and disadvantages to consider.

In addition, FTA must also strike the appropriate balance between expediting project delivery and maintaining the accountability of the program. For example, by signaling early federal support of projects, letters of intent could help project sponsors use potentially less costly and time-consuming alternative project delivery methods, such as design-build. However, such early support poses some risk.

It is possible that with more frequent use of letters of intent, FTA’s commitment authority could be depleted earlier than expected, which could affect the anticipated funding stream for future projects. Furthermore, some options, like combining one or more statutorily required project development phases, would require legislative action.

Click here to download/read the entire report (in PDF).

(Source: Flight Global & eweek.com)

Promising the fastest Wi-Fi in the sky, Row 44’s satellite-based airline broadband service wins operating approval from the Federal Communications Commission.

In a move that could usher in a new era for airborne communications the US Federal Communications Commission (FCC) has green-lighted Row 44’s application to operate an aeronautical mobile-satellite service (AMSS) in the conventional Ku-band segment.

The award, being heralded by Row 44 as “a major victory”, comes one month after Alaska Airlines and Southwest Airlines urged the FCC to finally approve the California-based firm’s application, which had come under persistent fire from would-be rival ViaSat.

Alaska and Southwest are trialing Row 44’s high-speed broadband system on a total five Boeing 737s. Their ability to expand the service fleet-wide hinged upon the approval of Row 44’s application.

As recently as 29 July, ViaSat asked the FCC to refrain from granting authority to Row 44. But Row 44 persevered, learning this week that it had received the crucial operating license from the FCC.

The license, together with the license already granted to Row 44 in Canada and a ‘right to operate’ agreement in Mexico, allows Row 44 to provide uninterrupted airborne Internet service throughout the North American continent, and brings it ever closer to providing near global coverage.

The FCC ruling states :

With this Order, we grant blanket authority to Row 44, Inc. (Row 44) for domestic operation of up to 1,000 technically identical transmit/receive aircraft earth stations in the Aeronautical Mobile Satellite Service (AMSS). The aircraft earth stations will operate in the conventional Ku-band, transmitting in 14.05-14.47 GHz and receiving in 11.7-12.2 GHz. We also grant Row 44 a waiver of the U.S. Table of Frequency Allocations (Table of Allocations) to permit its operations in the 11.7-12.2 GHz band. These earth stations will be used to communicate via leased transponders on three geostationary satellites: Horizon 1 at 127º W.L., operated by Intelsat LLC; and AMC-2 at 101º W.L. and AMC-9 at 83º W.L., operated by SES Americom, Inc. Today’s grant will allow Row 44 to provide two-way, in-flight broadband services to passengers and flight crews aboard commercial airliners and private aircraft. We believe that implementation of Row 44’s AMSS system, pursuant to this authorization, will enhance competition in an important sector of the mobile telecommunications market in the United States.

Row 44 holds the distinction of being the first Ku-band-based connectivity service provider to operate in the commercial sector following the late 2006 demise of Connexion by Boeing.

The Row 44 system provides downlink data rates averaging 30M bps and 620K bps maximum in the uplink direction. Along with providing broadband for passengers, Row 44’s technology also provides airlines a broadband link for operational data. The system weighs less than 150 pounds.

Aircell, Row 44’s competitor in providing airline Wi-Fi, uses ground-to-airplane technology. American Airlines, Delta Air Lines and Virgin America are using Aircell technology on selected flights and AirTrans plans to deploy broadband Internet access using Aircell on every flight across its entire fleet of Boeing 737 and 717 aircraft.

Row 44’s major system components include a low-profile antenna mounted to the top of the fuselage. Four compact line-replaceable units are installed above the cabin headlining just below the antenna: a server management unit, a high power amplifier, an antenna control unit and a modem data unit. To distribute a Wi-Fi signal, one or more wireless access units are placed in the airplane cabin.

Row 44 claims its satellite-based system provides the fastest Wi-Fi in the air. The system is supported by the global infrastructure of Hughes Network Systems. “No longer will an airline be forced to accept an unattractive compromise between the performance it can offer and the service price it must charge,” Row 44’s CEO John Guidon said.

While North American regulators do not currently permit in-flight mobile phone calls or SMS text messaging, the Row 44 system will support these services, notes Row 44. It says it intends to offer these services to airline customers throughout the world, wherever such activities are permitted and requested by airlines.

Click here to read the entire article.

(Source: The Infrastructurist)

The author make a convincing case for upping transit investments and transit-oriented development to make our systems efficient and suggests some drastic measures, which are considered often “basic” in the pro-transit world.  The summary goes like tihs: “The move toward a world where we need more alternatives to single-person auto travel is going to happen regardless of  US politicians. It would be better if we tried to get ahead of that curve. Lazrus is probably right to be gloomy about that–but wrong to be gloomy about the long-term prospects of transit and rail.”  If you are a transit nut, this is definitely worth a read.  Enjoy!

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Yesterday’s dispatch from LA Times business writer David Lazarus has a great lede: “It’s hard to appreciate how truly pitiful our public transportation system is until you spend some time with a system that works.” Many of us know that feeling.

Then he gushes about the consistently reliable, affordable and convenient transit systems in Japan. “I rode just about every form of public transit imaginable — bullet trains, express trains, commuter trains, subways, street cars, monorails and buses.” All fabulous, of course.

Then there’s that age old question of replicating it here in this place we call America. Lazarus argues that even if you build great transit and high speed rail networks people won’t use them in sufficient numbers unless you also strongly penalize car travel. Carrot and stick. But how to discourage auto use? Like this:

• Make driving more expensive with higher gas taxes and road fees
• Make parking much pricier and less convenient all over the country
• Redevelop our cities and suburbs to make them denser and more conducive to transit and rail travel

Pretty basic stuff, though Lazarus chooses to characterize this broader process as “making our cities less comfortable” and says he “simply can’t imagine political leaders at the local, state or federal level telling voters that they support a big increase in gas taxes, sky-high parking fees and high-density neighborhoods.”

That fact essentially seals the fate of transit and passenger rail, he argues.

Let’s assume for the sake of argument he’s right that politicians will never act to make driving meaningfully more expensive. Should we abandon hope for transit and passenger rail that doesn’t suck?

No. Potentially for two reasons, in fact.

Click here to read the entire article.

(Source: Economic Policy Institute)

Not even the most optimisitic American could have envisioned this soaring  popularity of “Car Allowance Rebate System” (CARS) — better known as “cash for clunkers.” CARS has proven to be very popular, and the $1 billion originally slated for credits appears to have been all but exhausted less than a week after the program went into effect. and is now awaiting another $2B lifeline, which is expected to come through after the Senate vote.

The program has already prompted thousands of Americans to upgrade older, less fuel efficient cars and is generating much-needed sales for troubled automobile manufacturers and related industries while decreasing gasoline consumption and improving environmental outcomes. But has there been an attempt to quantify these  impacts on fuel efficiency and environment? Yes.  The Economic Policy Insititute analyzes the fuel efficiency improvements & emissions reductions and made it easy for us to understand.  Here is a quick peek at the study & the awesome graphic that explains the cost savings in fueling a clunker vs. a new car.  The study methodology involves the following elements:

• Study authors assumed that the average credit is $4,000 and that all of the $1 billion is spent on credits, thus producing 250,000 trade-ins.
• The average miles driven per year — 14,450 — is the per vehicle estimate from the US Department of Transportation for 2006, the latest available data.
• Used forecasted annual gas price of $2.36/gallon from the Department of Energy.
• Derive CO2 emissions from the EPA and the Intergovernmental Panel on Climate Change, who assume that 1 gallon of automobile gasoline is equivalent to 19.4 pounds of CO2.
• 58% of all crude oil is from foreign sources and that 44% of all crude oil goes to gasoline production (both estimates from the Department of Energy for 2008).

Based on these assumptions, the study team has determined that the fuel economy improvements will save an estimated $821 per traded vehicle annually (see chart above).  How? Reduced gas consumption means less dependence on foreign oil, and more money in the pockets of consumers that could be used for domestic consumption. According to the Department of Transportation, the average fuel efficiency of old cars traded in via the program is 15.8 miles per gallon, while new cars had an average MPG of 25.4.

On average, total gas consumption will drop by 87 million gallons per year, and American consumers will use 22.2 million fewer barrels of foreign crude oil. The environmental impact of reduced gas consumption is considerable as well. We estimate that the program will result in about 850,000 fewer tons of CO2 emissions per year (3.4 tons per vehicle annually). This reduction equals more than two-thirds of the annual CO2 emissions linked to household electricity, heating, and waste.

Click here to read the entire article. (Hat tip @NPR)