"Previous studies significantly overstated the benefits of the programme, in part because they failed to include the additional emissions from producing new vehicles," Greg Keoleian of the University of Michigan told environmentalresearchweb. "We also showed how sensitive these results are to assumptions about the remaining lifetime of vehicles that were scrapped, to future regulatory changes related to vehicle fuel economy, and to other considerations."

Production and disposal typically provides about 10–20% of a vehicle's total lifecycle emissions.

Under the "Cash for Clunkers" programme, owners of cars or light trucks less than 25 years old with a fuel efficiency under 18 miles per gallon received a rebate of $3500 or $4500 providing they bought a new, more fuel-efficient vehicle and handed over their old vehicle for destruction. The Consumer Assistance to Recycle and Save (CARS) Act, to give it its more formal title, was passed in June 2009. The $3 bn of funding was exhausted in August, following the trade-in of nearly 700,000 vehicles.

Keoleian and colleagues Shoshannah Lenski and Kevin Bolon, also from the University of Michigan, used lifecycle analysis to show that CARS avoided 3.7 million metric tonnes of greenhouse emissions that would have been emitted by the relatively inefficient "clunkers" during their expected remaining lifetime. The programme saved a further 1.5 million metric tonnes because consumers bought more efficient new vehicles than they would have done otherwise. But 0.8 million tonnes of emissions were caused from the earlier manufacturing of new vehicles and premature disposal of old ones.

Overall the move prevented 4.4 million metric tons of greenhouse-gas emissions, about 0.4% of the annual total produced by light-duty vehicles in the US.

To come up with these figures, the team calculated the total greenhouse-gas emissions impact for an average car over its whole lifecycle, and then multiplied that by the 677,081 vehicles that were traded in. These decommissioned vehicles had an average fuel efficiency of 15.7 mpg and the average on the clock was 160,167 miles, while new vehicles had an average fuel efficiency of 24.2 mpg. A substantial number of participants traded light trucks for cars.

The US Department of Transportation, in contrast, estimated that the scheme saved just under 9.5 million metric tonnes of carbon dioxide-equivalent emissions, including those from gasoline consumption and upstream impacts from fuel extraction, processing and distribution.

"The differences [between the Keoleian team's and other studies] are driven in large part by our assumption that traded-in vehicles had about 22,000 miles remaining," write the researchers in Environmental Research Letters (ERL). "Most other studies assumed, without justification, substantially longer remaining lives – as much as 60,000 miles, for example… – though some acknowledged they used generous assumptions."

The researchers hope that their findings can be used to improve future programmes of this kind.

"Vehicle scrappage programmes like 'Cash for Clunkers' may have a role to play in greenhouse-gas emissions reduction, but policymakers should consider how to design the programs to increase the environmental benefit," said Keoleian. "For instance, we found that the timing of such a programme, in relation to other fuel economy regulations, is very important. Encouraging consumers to purchase new vehicles shortly before improved fuel economy standards take effect – such as the 2012 CAFE standards – could offset many of the projected environmental benefits of the scrappage programme."

According to a survey by the US Department of Transportation, 31% of participants in the CARS scheme had planned to keep their vehicles for at least another three years, so their replacement vehicles would have had to comply with CAFE standards. These are 5.8 mpg higher for cars than 2009 standards and 2.3 mpg higher for light trucks. Taking this into account, the CARS scheme prevents a total of only about 750,000 metric tons of carbon dioxide-equivalent emissions, say the researchers.

The team reckons that this is just one example of several considerations that policymakers should be integrating into their decision-making. "Coincidentally, while we were working on this, the US Government Accountability Office conducted an assessment of 'Cash for Clunkers' and contacted us to learn about how to apply life-cycle methodology to the programme – reinforcing, in our view, the importance of this perspective," said Keoleian.

The Clunkers programme is estimated to have created more than 38,000 direct jobs and contributed $4–8 bn to gross domestic product. "However, if we consider CARS simply for its greenhouse-gas emissions reductions, setting aside those economic stimulus benefits, it would appear to be an extremely expensive way to mitigate greenhouse gases," write the researchers. "The programme cost about $3 bn in taxpayer money, meaning the public cost for each metric tonne of avoided greenhouse gases was well over $600. This is particularly high when compared to the estimated $13 price tag for a metric tonne of carbon dioxide-equivalent emissions reduction under the proposed American Clean Energy and Security Act of 2009."

Now the team is studying the life-cycle impact of "Cash for Clunkers" on pollutant emissions, as well as the economic incentives consumers had to participate in the programme. "We hope that our work will provide some guidance for the rebate level in future programmes," said Keoleian. "For example, if the rebates were larger than necessary to attract participation, as has been speculated, maybe the programme could have gotten more 'bang for its buck' – environmentally and economically – with different rebate levels."

The scientists reported their work in Environmental Research Letters (ERL).