Sunday, September 14, 2008

What is the best car for the environment?

A friend recently said she plans to spend $15,000 on a used hybrid car, because she cares about the environment. But wait, I said, don't the high manufacturing costs of hybrids make an old Toyota Corolla or Honda Civic more environmentally friendly -- not to mention much cheaper?

Brendon Koerner recently addressed this very question in Slate. His conclusion: the Prius has a far smaller carbon footprint than nearly any other car, including the energy used in manufacture. I agree with his overall conclusion.

But I don't agree that this is the end of the story. My calculations* suggest that, after accounting for gas savings, the extra cost of getting a used Prius at 80k miles is about $2,600 greater than the same cost for a Corolla.

Why should this matter to a buyer who is most worried about reducing energy consumption? Isn't $2,600 just the cost of being environmentally friendly? Maybe, but before jumping to that conclusion, consider the opportunity cost: With $2,600 to blow on saving energy in other ways besides buying an expensive car, could you end up saving even more energy?

For example, you could turn down the heat extremely low in winter and compensate with $500 of comfy winter clothes and blankets. You could upgrade your most energy inefficient appliance for another $500. You could get a nice bike for $500 and reduce your city driving. That leaves $1,100 for you to donate to your favorite educational or political organization to mobilize more people to take up the simple life.

If you already do all these things, or if you are uncomfortable with your image and want to look more green to impress your friends, then, by all means, buy a hybrid.

*According to Kelly Blue Book, a 2004 Toyota Corolla LE with 80k miles in good condition goes for about $9,000 (private party dealer), whereas a comparable Toyota Prius costs over $15,000. The difference is $6,000. Suppose the price of gas stays around $4/gallon. Suppose the Prius averages 50mpg and the Corolla averages 35mpg. Then the Prius saves just $0.034 per mile, and the prius would need to continue running to 255k to pay itself off. Realistically, the cars might die at about 180k, putting the "environmentalism primium" (the true financial cost of choosing the Prius over the Corolla) at about $6,000 - $3,400 = $2,600.

2 Comments:

Anonymous happypappy said...

I appreciate the garden calculations. Keep up the good work.

4:50 PM  
Blogger current typist said...

And don't forget the trash yard: Driving an old beater is simply a good conservation tactic, often in spite of greater fuel consumption.

5:42 PM  

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