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From CGI Idea to Headline: Cash for Clunkers

By Tom Watson on September 23, 2009No Comment

Last year, social entrepreneur/technologist Jack Hidary made a proposal at the Clinton Global Initiative: why not incentivize car buyers to trade in older vehicles with lousy mileage for newer ones with great mileage?

The problem was obvious: the United States burns through 83 million barrels of oil a day, most of it imported – 25 percent of the world's total usage – and half of that goes for motor fuel. The idea was to attack U.S. dependency on foreign oil at the core of its usage, while also reaping the benefits of cleaner skies and a smaller carbon output.

Getting the "worst offenders off the road" was how Hidary put it at a news conference at CGI today. And so last year at CGI, the kernel for the "Cash for Clunkers" program was planted.

Hidary and Bracken Hendricks, a fellow at the Center for American Progress and a Clinton track chair who also advised the Obama transition on energy issues, broke down the process from idea to highly successful legislation – and one of the keys was the attendance at last year's CGI. Several automakers' CEOs were in attendance last year and "we were able to engage on the spot."

The program eventually leveraged $3 billion in taxpayer funds leading to $23 billion in consumer spending – a win for the automakers and for the recession-riddled consumer sector – but more importantly, said Hidary, it sent a fleet of cars averaging 15 miles per gallon into the crusher in favor of cars average 25 MPG. "It was win-win-win," he said.

Hendricks said the Cash for Clunkers commitment was a case study for how CGI works best – and useful in answering President Clinton's charge at this years CGI to "focus on the how and look a mechanisms we use for change." In this case, the early involvement of the auto industry – even before it was enveloped in crisis last year – was key to a winning policy.

Both Hendricks and Hidary emphasized that creating green jobs isn't just about new high-tech technology – it's also about replacing what doesn't work with what does (another Cash for Clunkers lesson). New York City, suggested Hidary, is the Saudi Arabia of potential energy savings and reduced emissions – a huge metropolis just beginning to replace old, wasteful technologies … like the overhead lights in the Sheraton conference room.

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