AskPablo: Keep the beater?

Is it environmentally better to keep my 1986 Mercedes-Benz W126 or buy a new hybrid?
This is a question I have gotten a lot, and one that I have wondered about myself. You see a modern-day tie-dye aficionado puttering along the highway in his VW van with black smoke spewing out the back, and you have to wonder if we wouldn’t all be better off if he traded it in for a Prius. The consensus among some environmentalists — perhaps ones who drive late-’60s Mustangs — seems to be that driving your old car creates significantly less pollution than the manufacture of a new car. I wish it were that easy.
The Argonne National Lab, a U.S. Department of Energy research center, has analyzed the material intensity and energy consumption of manufacturing vehicles and vehicle fuels. Their work is packaged in GREET models (for greenhouse gases, regulated emissions and energy use in transportation). According to the models, the average conventional internal combustion engine vehicle is made up of 61.7 percent steel, 11.1 percent iron, 6.9 percent aluminum, 1.9 percent copper/brass, 2.9 percent glass, and around 13.6 percent plastic/rubber. This information helps determine the energy required to produce a vehicle.
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