Carbon Contest

For the past several years the Toyota Prius has held the title as the car of choice for the environmentally concerned driver, but is it really the best option? In the following paper, I’ll present a quick look at the top ten most fuel efficient cars (rated by the EPA) and show why it MIGHT be a better idea to buy a different car in order to reduce one’s carbon footprint.

Here are the top ten cars from the EPA’s Fuel Economy Guide with expected fuel expenses and carbon emissions.

As you can see, the Toyota Prius is at the top with the best fuel economy and the lowest expenses and emissions. Now, if we assume that we are buying a new car this year and financing it, the table is rearranged like this. Remember, our goal here get the greatest amount of emission reduction per dollar spent.

After taking in to account the cost of the car and the monthly loan payments, the smart fourtwo coupe is the least expensive followed by the Honda Insight Hybrid and then the Toyota Prius.

With the fourtwo, there is nearly $200 in monthly savings compared to purchasing the Prius, but we also have 150 MORE lbs of CO2 emissions to deal with. Since our goal is to reduce our overall carbon footprint, we need to reduce it in other areas.

Taking that extra savings from our loan payments we can put it towards a few different options.

My first choice: Home Performance! Putting the money in to your home will not only lower your carbon footprint, it will put even more money in your pocket. There are so many projects that will give returns greater than 10% (which is the assumed APR above) that you are better off in putting your money there than paying off the loan faster. Things like low-flow showerheads and CFLs can provide returns of 500% or more and so should be in your first wave of upgrades. For a more complete list of projects and their paybacks look at some of these articles and try our cost-saving calculators.

Option Two: Use the extra money to install a renewable energy system at your house. With the over-production of solar wafers in the past few years, the price of a PV system has come down dramatically and with the 30% tax credit, the systems’ will provide an even quicker payback.

Option Three: Although it’s the most passive option and won’t bring further financial benefit to you, purchasing carbon offsets will help the global goal of reducing emissions if purchased from a reputable source. The company, Terrapass will offset 2,000 lbs of emissions for $12. This is slightly more than the 1800 lbs that the fourtwo will produce OVER the Toyota Prius and that money will go to help producing more power from renewable sources like solar and dairy farm biogas.

So, if your ultimate goal is to reduce your total carbon footprint AND you need to buy a new car this year AND a vehicle with just two seats works for your daily needs, get the smart fourtwo. The monthly savings in financing costs will be able to reduce your footprint in other ways saving you even more money in the process.

My personal choice for a new car this year (if you happen to live in one of five lucky markets like Seattle…) is the Nissan LEAF. It’s an all-electric car that can go 90 mph and 100 miles on a single charge. Since I regularly travel with 2 other big guys and a big dog or two, having the full backseat is a must. Also, I am a big proponent of electric vehicles and using them during the day as an aid during peak electrical consumption. Although I will be spending more each month, this car better fits my needs for size, ability to drive on the highway, and reduces my operating costs and emissions.  You can see a review and view a video of my test drive of the LEAF here.

In our next article we will break down each category, two-seater, sedan, small truck and SUV so that you will be even better equipped when you go to buy that new car.

Note: I did not include the LEAF or the Tesla Roadster (my dream green car) because as of this writing they are not listed in the EPA’s fuel economy guide, the LEAF is not yet commercially available and the $109,000 sticker price for the Roadster would take it out of the running for the comparative exercise in this paper.

Assumptions and Sources:

Fuel Economy Data: US EPA

Carbon Dioxide Emissions: Gasoline 19.56 lbs/gal, Diesel 22.38 lbs/gal, US EIA

Financing: zero down, 10% APR for five years
Auto MSRPs: Company’s website