Scrap programs for old vehicles

Scrap, scrappage, or vehicle early retirement programs provide incentives to consumers to trade in old cars or light duty trucks with low fuel efficiency and high emissions and buy new vehicles with higher fuel efficiency and reduced emissions. Such programs are typically run by government entities, public agents, or private companies. Programs generally include rebates, tax credits, or vouchers to purchase new vehicles; in some cases, programs have offered incentives for active modes of travel or public transit such as transit passes, rebates on bicycles, or membership to a car sharing cooperative (TRB-Lachappelle 2013).

Expected Beneficial Outcomes (Rated)

  • Reduced emissions

  • Improved air quality

  • Improved vehicle fuel economy

Evidence of Effectiveness

Scrap programs for old vehicles are a suggested strategy to reduce emissions, improve vehicle fuel economy, and improve air quality (RAND-Dixon 2001, Sivak 2009, Tyrrell 2011*, Dill 2004*). Modeling and life cycle analysis suggests that these programs moderately reduce emissions (Antweiler 2011, TRB-Morrison 2010, Zolnik 2012*, Lin 2008a*, Lenski 2010, Lenski 2013*), especially in densely populated areas (Van Wee 2011*). However, these model estimations are very sensitive to economic factors, assumptions, and program design. Additional evidence is needed to confirm effects.

Available evidence suggests vehicle retirement and replacement programs with income eligibility requirements, such as California’s Replace Your Ride (RYR) program, can encourage purchases of plug-in and hybrid electric vehicles among drivers with low incomes (Sheldon 2019). Income eligible vehicle retirement programs can also be combined with incentives for purchasing electric vehicles (DeShazo 2016*) or with incentives for alternative modes of transportation such as ride share memberships, public transit passes, or bicycle purchases to achieve greater emissions reductions (Antweiler 2015*, Lachapelle 2015*).

Costs for scrap programs are often high; however, programs can be cost effective in some cases (TRB-Morrison 2010, RAND-Dixon 2001). Scrap programs with income eligibility requirements, targets for specific types of vehicles, and which focus on areas with poor local air quality can increase benefits and improve cost-effectiveness and efficiency (Sheldon 2018*, DeShazo 2016*, Van Wee 2011*, Lenski 2013*) more than broad, income independent programs (Sheldon 2018*), especially as fewer old vehicles with high emissions remain on the road (Sandler 2012*). Efforts to determine the cost effectiveness of scrap programs should consider variation in consumer willingness to replace vehicles and account for consumers who would have replaced without the program, otherwise the program’s net benefits will be overestimated (Zaman 2020*). Additional evidence is needed to determine effects of scrap programs on the second-hand car market and car use (Van Wee 2011*).

Case study reports from around the world suggest scrap programs are most effective when implemented along with other emission reduction policies such as new vehicle emissions standards, fuel sulfur reduction strategies, and well-designed inspection and maintenance (I/M) programs. Successful scrap programs achieve the greatest environmental benefits when replacement vehicles are as clean as possible and significantly cleaner than scrapped vehicles; program operation ensures that scrapped vehicles do not remain operational; financial incentives are customized for the local community; program design considers the roles of national, regional, and local policymakers; and programs are implemented along with non-fiscal policies such as low emission zones, mandatory age limits for vehicles, or operation restrictions that encourage program participation (Posada 2015).

Impact on Disparities

No impact on disparities likely

Implementation Examples

Some states, such as California (Cal ARB-VAVR), have their own vehicle scrap programs. California has also adopted Clean Cars 4 All, a program that provides incentives to drivers with low incomes to scrap older, high emissions vehicles and replace them with zero or near zero emissions vehicles (Cal ARB-CC4A). Regions and municipalities have implemented vehicle scrap programs, for example Denver, CO; Baltimore, MD; and several counties and regions in California (TRB-Dill 2007). Air Quality Management Districts or Air Pollution Control Districts in several regions of the country run voluntary scrap programs, such as California’s South Coast (CA South Coast-AQMD), Bay Area, County of San Luis Obispo, Antelope Valley and Mojave Desert (Old car buy back).

At the federal level, the Car Allowance Rebate System (CARS) also known as “Cash for Clunkers,” implemented as part of a 2009 economic stimulus package, resulted in the replacement of approximately 680,000 vehicles at a cost of $2.85 billion (US DOT-Project overview cars).

Citations - Evidence

* Journal subscription may be required for access.

RAND-Dixon 2001 - Dixon L, Garber S. Fighting air pollution in Southern California by scrapping old vehicles. Santa Monica: RAND Corporation; 2001.

Sivak 2009 - Sivak M, Schoettle B. The effect of the “Cash for Clunkers” program on the overall fuel economy of purchased new vehicles. Ann Arbor: University of Michigan, Transportation Research Institute (UMTRI); 2009.

Tyrrell 2011* - Tyrrell M, Dernbach JC. The “Cash for Clunkers” program: A sustainability evaluation. University of Toledo Law Review. 2011;42:467–92.

Dill 2004* - Dill J. Estimating emissions reductions from accelerated vehicle retirement programs. Transportation Research Part D: Transport and Environment. 2004;9(2):87–106.

Antweiler 2011 - Antweiler W, Gulati S. An analysis of British Columbia’s SCRAP-IT program: Emissions savings, participation, and transportation choice. Rome, IT: European Association of Environmental and Resource Economists 18th Annual Conference; 2011.

TRB-Morrison 2010 - Morrison GM, Allan A, Carpenter R. Abating greenhouse gas emissions through Cash-for-Clunker programs. Transportation Research Record: Journal of the Transportation Research Board. 2010;2191:111–18.

Zolnik 2012* - Zolnik EJ. Estimates of statewide and nationwide carbon dioxide emission reductions and their costs from Cash for Clunkers. Journal of Transport Geography. 2012;24:271–81.

Lin 2008a* - Lin J, Chen C, Niemeier DA. An analysis on long term emission benefits of a government vehicle fleet replacement plan in northern Illinois. Transportation. 2008;35(2):219–35.

Lenski 2010 - Lenski SM, Keoleian GA, Bolon KM. The impact of “Cash for Clunkers” on greenhouse gas emissions: A life cycle perspective. Environmental Research Letters. 2010;5(4):1–8.

Lenski 2013* - Lenski SM, Keoleian GA, Moore MR. An assessment of two environmental and economic benefits of “Cash for Clunkers.” Ecological Economics. 2013;96:173-180.

Van Wee 2011* - Van Wee B, De Jong G, Nijland H. Accelerating car scrappage: A review of research into the environmental impacts. Transport Reviews. 2011;31(5):549–69.

Sheldon 2019 - Sheldon TL, Dua R. Assessing the effectiveness of California’s “Replace Your Ride.” Energy Policy. 2019;132:318-323.

DeShazo 2016* - DeShazo JR. Improving incentives for clean vehicle purchases in the United States: Challenges and opportunities. Review of Environmental Economics and Policy. 2016;10(1):149-165.

Antweiler 2015* - Antweiler W, Gulati S. Scrapping for clean air: Emissions savings from the BC SCRAP-IT program. Journal of Environmental Economics and Management. 2015;71:198-214.

Lachapelle 2015* - Lachapelle U. Using an accelerated vehicle retirement program (AVRP) to support a mode shift: Car purchase and modal intentions following program participation. Journal of Transport and Land Use. 2015;8(2):107-123.

Sheldon 2018* - Sheldon T, Dua R. Vehicle retirement and replacement policy: Assessing impact and cost-effectiveness. Riyadh, Saudi Arabia; 2018.

Sandler 2012* - Sandler R. Clunkers or junkers? Adverse selection in a vehicle retirement program. American Economic Journal: Economic Policy. 2012;4(4):253–81.

Zaman 2020* - Zaman H, Zaccour G. Vehicle scrappage incentives to accelerate the replacement decision of heterogeneous consumers. Omega. 2020;91.

Posada 2015 - Posada F, Wagner DV, Bansal G, Fernandez R. Survey of best practices in reducing emissions through vehicle replacement programs. The International Council of Clean Transportation; 2015.

Citations - Implementation Examples

* Journal subscription may be required for access.

Cal ARB-VAVR - California Air Resources Board (Cal ARB). Voluntary Accelerated Vehicle Retirement Program (VAVR). Sacramento: California Environmental Protection Agency; 2011.

Cal ARB-CC4A - California Air Resources Board (Cal ARB). Clean Cars 4 All (CC4A). Sacramento: California Environmental Protection Agency.

TRB-Dill 2007 - Dill J. Design and administration of accelerated vehicle retirement programs in North America and abroad. Transportation Research Record: Journal of the Transportation Research Board. 2007;1750(1):32–9.

CA South Coast-AQMD - South Coast Air Quality Management District (AQMD). Old-vehicle scrapping program.

Old car buy back - Old Car Buy Back and Scrap Program. Environmental Engineering Studies, Inc.

US DOT-Project overview cars - US Department of Transportation (US DOT). Projects overview. Washington, DC: US Department of Transportation (US DOT); 2013.

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