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WHITE HOUSE OUTLINES `CASH FOR CLUNKERS' POLLUTION PLAN

Bush administration officials this week outlined their "cash-for-clunkers" plan to permit certain polluting industries to buy pre-1980 cars, junk them and use the emissions savings to offset their own pollution.

President Bush said in a statement the program will mean "a cleaner, healthier environment and a more competitive economy."But some of the 14 officials at a White House briefing on regulatory reform conceded the effect on the environment is a tradeoff.

Here's how the program will work:

In the next 30 days, the Environmental Protection Agency will set program application rules for states and localities in areas that don't meet federal clean-air standards. Cities such as Los Angeles, San Francisco and Sacramento already have said they will apply. Some cities could have programs under way by the end of the year, according to EPA policy director Dick Morgenstern.

Once a permit is granted, a factory, refinery or other industry that emits the same pollution as cars do, such as hydrocarbons, nitrogen oxides, particulates or carbon monoxide, will be able to participate.

The factory, power plant or refinery will advertise it will buy pre-1980 cars at more than market value. An experiment with 8,000 cars run by Unocal in California pegged pre-1971 cars at $700 each, but the average price would be different - and probably lower - in other regions of the country.

To qualify, the cars have to be driven to the pickup site and be licensed and insured for the previous year. The idea is to get cars off the road, not provide windfalls for people with non-working cars on cinder blocks in their back yards.

Department of Motor Vehicle employees will be in charge of compliance at the sites where the cars are junked. Morgenstern said there will be "plenty of rules" to avoid corruption.

The company will then be able to offset ton for ton its pollution against the expected pollution of the cars it junked, based on an EPA formula for how long the car would have been driven. For example, it estimates pre-197l cars have a life of three more years.

The 25 million pre-1980 cars registered in the United States cause as much as 85 percent of the auto pollution but represent only 38 percent of the cars on the road. Put another way, the dirtiest 6 percent of cars emit 50 percent of hydrocarbons.

The advantage to the company in buying clunkers is money saved. The cost of buying the cars might be as little as one-third of the investment the company otherwise would have to make to meet federal standards if it had to buy new equipment such as scrubbers for smokestacks, Morgenstern said.

He added that he would expect that there could be stiff competition among factories in some areas that could increase costs of buying cars.