Well why not? The government appears to have almost unlimited amounts of taxpayers’s money to throw around. We have seen a brief (and it may prove damaging, certainly distorting) stimulus given to the car industry which will shortly slide back into the despond from which it emerged just a month ago. Why not now stimulate another part of the manufacturing landscape in an equally illogical way? According to a Reuters article this week, beginning in the fall consumers will have access – through existing state-level energy efficiency incentive programs ” to $300 million in stimulus funds made available as rebates for energy efficient appliances.
The one good condition on the cash for clunkers program was that it actually required the scrapping of the old clunker to qualify for the handout. This new program does not require any trade in. So you tell me what is going to happen. Perhas middle class buyers are going to take the opportunity to upgrade their kitchen refrigerator and as the article suggests, move the old one down to the basement or wet room to store beer or overflow from the bulk shopping trip. The old, less efficient appliance will still be plugged into the grid. It will just have a new more efficient one plugged in next to it too! The new dishwasher will replace the old, but the old will appear on e-Bay for someone else to plug back into the grid.
The money would have been better spent funding a credit for every returned old appliance and/or expanding subsidized collection and safe disposal of old appliances. Transport is one of the biggest costs and barriers to greater recycling of household appliances. Otherwise we are left with the impression this is nothing more than a boost for appliance manufactures and reduction of energy use is a complete red herring. If that is the case, the money should just have been given directly to the appliance manufacturers and we could have avoided the cost of managing the program.