A bill introduced in Congress today would pay people to scrap their fuel-inefficient vehicles and trade up to more green transportation. While it sounds good in theory, the actual environmental benefits may not be worth the $3 billion annual cost.

I heard about this bill via email from the American Council for an Energy Efficient Economy (ACEEE), which states: The ARIVA bill, sponsored by Senators Feinstein, Collins, and Schumer and Representatives Inslee and Israel, among others, offers vouchers of up to $5,500 for consumers to retire vehicles rated at under 18 miles per gallon for fuel economy purposes (roughly 14-15 miles per gallon in on-road driving).

So great, the most noxious gas guzzlers will be turned into scrap metal. And in the process, people will have a real cash incentive to buy green, as the vouchers can only be used to purchase vehicles that exceed federal fuel economy standards by at least 25 percent.

This should also be music to Detroit's ears, as the voucher should have people line up at dealerships to buy the smaller, more fuel efficient gas, hybrid and electric cars that we hope they'll manufacture. It could quickly help to turn around the American auto industry's funk.

Here's a press release quote from the ACEEE Transportation Program Director Therese Langer:

"Unlike tailpipe pollution rates, which have been declining steadily, vehicle fuel economy has been stagnant for decades. This program correctly targets highly inefficient vehicles of any vintage."

However, on closer inspection the price tag ain't small. The ACEEE projects that up to 575,000 consumers could take advantage of the voucher each year, at a cost to taxpayers of $3 billion. It's only money, right?

But think about the cars that will be scrapped. Many of them probably are still in service, so premature retirement means wasting the remaining portion of the carbon footprint used to build them. It takes a lot of energy and petroleum to build a car, and the savings at the pump going from 16 to 30 mpg will take a long while to offset what was put into the now dead vehicle.

And also consider the vehicles that fit the description required by the bill: they must get less than 18 mpg. That smells like SUVs and high performance cars to me. For example, vehicles EPA ratings from a decade ago show that higher priced vehicles such as the Chevy Tahoe, Chrysler Town and Country, and Mercedes Benz SL600 could be turned into vouchers, but cars that average consumers buy (that aren't great on gas by today's standards) such as Chevy Malibu, Jeep Cherokee, and Chrysler Sebring would not.

So aren't we paying people who can afford new cars on their own to trade up at the cost of us all?

I hope there is a provision limiting the vehicles to those in working order to prevent a run on junkers that can be turned into $5,500 in greenbacks for car buyers.

This should be an interesting debate in Congress.

Update: my pal over at Edmunds' Green Car Advisor, John O'Dell, recently wrote about an earlier version of this bill; check out his informative insight.