ABSTRACT
This chapter examines government subsidies directed at individuals, and focuses on rebates for durable products, namely home appliances and cars. It focuses on programs in the US and Japan, where subsidies for durable products were major aspects of the green stimulus packages introduced by governments in the wake of the global financial crisis (GFC). The chapter discusses that free riding appears to be a difficult problem to avoid with product subsidies and it arises as an issue. Under the Eco-Car program, consumers had the option of replacing an old car with a new car that met Japan's 2010 fuel-efficiency standards. S. Nakano and Washizu discovered that energy-saving electrical appliances became more widespread after the introduction of the Eco-Points program. When the Cash for Clunkers program was in full swing in July 2009, US Energy Secretary, Steven Chu, announced what became popularly known as the "Cash for Appliances" scheme. The aim of the Cash for Appliances was to stimulate economic recovery.
