First, even when new cars and appliances are more efficient than the ones they replace, the act of replacing them entails environmental costs not accounted for in the stimulus programs. Building a new car, washing machine or refrigerator takes energy and resources: The manufacture of steel, aluminum and plastics are energy-intensive processes, and some of the materials used in durable goods, especially plastics, use non-renewable fossil fuels as feedstocks as well as energy sources. Disposing of old products, a step required by most incentive and rebate programs, also has environmental costs: It takes additional energy to shred and recycle metals; plastic components often cannot be recycled and end up as landfill cover; and the engine fluids, refrigerants and other chemicals essential to operating products end up as hazardous wastes.

Policies that encourage purchases of energy-efficient products may also increase, rather than decrease, energy use by confusing efficiency with consumption. For example, Energy Star refrigerators, which now qualify for rebates in many states, are certified to be 10 to 20 percent more efficient than “standard” models. Yet the Energy Star rating is awarded overwhelmingly to refrigerators far larger than would have been the norm two decades ago, and smaller models of refrigerator, which use less energy simply because they have a smaller volume of air to cool, were not even included in the Energy Star program until 2002.