Administration OKs ‘Cash for Clunkers’ Plan : Environment: Industrial polluters could receive credits for buying and retiring old smog-spewing cars.

Taking its cue from a successful California project, the Bush Administration said Wednesday that it will allow businesses and industries to avoid expensive pollution-control measures by buying and junking perhaps millions of smog-spewing old cars.

The Environmental Protection Agency will issue guidelines within the next month encouraging states to adopt voluntary programs in which industrial polluters would receive credits for retiring old cars that emit the highest levels of pollution.

The companies could use the credits to meet their requirements to reduce emissions under the 1990 federal Clean Air Act.

The plan would enable businesses and industries to save millions of dollars by buying the “clunkers” rather than installing costly, high-tech equipment to abate emissions from their smokestacks.

Administration officials said the program will protect the environment while helping private enterprise. But environmentalists were skeptical.

Daniel Becker, director of the Sierra Club’s global warming and energy program, called the proposal “the ultimate junk bond,” claiming that although the cars are no longer polluting the air, the industries that removed them are.

EPA studies estimate that cars manufactured before 1980 are responsible for 86% of the carbon monoxide and organic compound pollution by automobiles. Six percent of the cars in use account for fully half of the hydrocarbons poured into the atmosphere from tailpipes, assistant EPA Administrator Richard D. Morgenstern said.

As part of the initiative rolled out at a White House briefing, the EPA will develop what amounts to a “blue book” of high-polluting cars. Each model manufactured before 1980 will be assigned a number of credits based on its emissions and its expected lifetime.

Industries buying such cars could deduct the expected pollution in the remaining life of the cars from the abatement requirements imposed on the companies by the Clean Air Act.

White House counsel C. Boyden Gray said the highly polluting cars could be removed from the road more quickly than complex new controls could be installed on industrial pollution sources.

The plan for removing heavily polluting cars from the road apparently was inspired by a 1991 program in which Unocal paid $700 each for several thousand pre-1971 clunkers as part of a $10-million environmental initiative.

The South Coast Air Quality Management District is considering the possibility of continuing a buyout program.

The EPA, like the California program, will require that the cars have been licensed and insured in the previous year to prevent vehicles already junked from being turned in for payment.

At the same time it unveiled the “cash for clunkers” program, sources said, the Administration had planned to soften federal fuel efficiency standards, reducing the average mileage requirement from 27.5 miles per gallon to 26.5 miles per gallon for cars using reformulated gasoline.

The step had been opposed by ranking officials at the EPA, the Transportation Department and the Department of Energy, the sources said.

Sen. Slade Gorton (R-Wash.), a member of the Commerce, Science and Transportation Committee, was said to have joined the opposition, protesting the plan in recent conversations with White House Chief of Staff Samuel K. Skinner.

Asked about the planned rollback, Gray told reporters that the long-awaited regulation “has been postponed due to a technical issue.”