Accelerated vehicle retirement, or mandatory scrappage, programs encourage vehicle owners to voluntarily retire their vehicles sooner than they would have otherwise. These programs are usually voluntary, and vehicle owners decide whether or not the compensation is sufficient to induce them to turn in their vehicles.
1. Actual experiences
2. Emissions reduction potential
Analysis indicates that early retirement programs for older vehicles can exhibit a wide range of outcomes, depending on both the structure of the programs and the values of a number of key variables that are very uncertain.
However, it is quite likely that a carefully designed early retirement program, targeted at areas that exceed air quality standards can achieve environmental benefits at costs equal to or lower than those of other emissions-reduction options that are already in use or scheduled to be used. These programs can also achieve significant gasoline savings. These programs are also likely to have a positive impact on fleet safety because of the improved design of newer cars and the likelihood that brakes and other safety systems on the replacement vehicles will be in better condition than the ones replaced.
An important side effect of a very large early retirement program will be to increase the demand for, and raise the prices of, the remaining cars in the fleet, because many of the former owners of the retired vehicles will seek to purchase replacement vehicles. This will adversely affect lower income vehicle buyers just entering the car market. On the other hand, the money used to purchase the vehicles will go directly to former owners of retired vehicles, many of whom may be expected to be of lower income.
The actual benefits of a scrappage program depend critically on assumptions. For example, one cannot be sure what types of vehicles will be attracted to a large-scale scrappage program, particularly their emissions levels and the extent to which they would have been ready for retirement anyway, or else would have been kept operative but used much less than average vehicles. If the assumed values for the emissions and remaining lifetimes of the vehicles in the program are too high (or too low), then the benefits have been overstated (or understated).
Estimated net benefits also depend on assumptions about the nature of replacement vehicles for those that are scrapped, and the nature of resulting changes in the existing fleet in the area affected by the scrappage program. It is unclear whether the "vehicle miles lost" by scrapping cars before their normal retirement dates will be made up by increased driving of the remaining fleet or whether these miles will be made up in large part by increased sales and use of new vehicles. Another uncertainty; In a scrappage program confined to limited areas, will the owners of the scrapped cars replace them primarily with cars of more recent vintage, with better fuel economy and lower emissions, or will they "import" older cars from outside the program area, sharply reducing emission benefits and fuel savings?
Past emissions testing programs have demonstrated wide variations in emissions performance among older vehicles of the same model type and vintage, probably because of different maintenance regimes as well as the random nature of failures of emission control systems. Policymakers concerned about obtaining a better cost/benefit ratio from a scrappage program might wish to examine options that tie participation in such a program to emissions performance.
3. Suggestions
Scrappage bonuses might be offered only to vehicles that failed scheduled emissions tests in a State I/M program, or that were identified as high polluters by remote sensing. Although some vehicle owners might deliberately sabotage their vehicles to cause them to fail an emissions test, the effectiveness of a "selective" program in the face of such tampering would be no worse than that obtained by a program offering scrappage bonuses to all willing participants, and most likely would be considerably better. If a vehicle retirement program can selectively retire vehicles with average emissions double the national average for their age group, program benefits would greatly exceed likely costs.
Another option for removing polluting vehicles from the fleet that policymakers might consider is to insist that vehicles failing State IM emission tests be removed from service if they cannot be repaired. More effective I/M programs will reduce the incremental emissions benefits of a vehicle retirement program by removing the highest emission (and highest net benefit) vehicles from the fleet.
Still another option would be to vary the size of the bonus (or the magnitude of the corporate incentive, e.g., emission credit) according to some measure of the potential emissions benefits. The measure could be based on previous emissions experience with different engine classes, data on average remaining lifetime and average emissions of different vintages, etc. Given an accurate basis for estimating emissions and lifetimes, this approach would yield an improvement in the cost-effectiveness of the program. However, there may be important concerns here about the availability of adequate data, especially about remaining lifetime.
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