Abating Greenhouse Gas Emissions through Cash-for-Clunker Programs

Abstract

Policymakers use incentive-based vehicle scrappage or "Cash-for-Clunker" programs to pursue a range of social and economic goals such as decreasing vehicular emissions, preventing vehicle abandonment, lowering consumer spending on gasoline, and stimulating new vehicle sales. However, there are no programs aimed solely at greenhouse gas (GHG) reduction. This study discusses design considerations for such a program. We evaluate past and present programs to show how regulatory elements in vehicle scrappage programs can be adjusted to maximize GHG savings. We show how fuel-economy based eligibility requirements are preferable to age-based requirements and how financial incentives can be properly aligned to balance program cost and participation rate. Finally, we present a program framework that, at minimum, ensures a Cashfor-Clunkers program offsets GHG emissions attributable to vehicle manufacturing and end-oflife disposal with use-phase emissions reductions.

Miles per Gallon Illusions and Corporate Average Fuel Economy Distortions

“…At a minimum, future rules should be written to prevent mpg-based distortions. Surprisingly, the recent U.S. "Cash for Clunkers" program implemented in fall 2009 based incentives on mpg saved (30).…”

Reducing Greenhouse Gas Emissions from U.S. Light-Duty Transport in Line with the 2 °C Target

“…The base case vehicle lifespan is equal to Liao et al’s prediction, which models current and future lifespan probability mass functions for U.S. passenger cars, SUVs, and light trucks with respect to the year of production. The ICEV early retirement simulations are motivated by our LCAs (Section ), which show ICEVs have the highest life cycle (and use-phase) emissions of all the powertrains analyzed, and the precedent set by the 2009 U.S. “Cash-for-Clunkers” program . In the early retirement simulations, ICEV vehicles that have survived to 10 or 20 years old (depending on the simulation) are then scrapped.…”

“…In 2024, ICEVs 9 years older than the target retirement age are scrapped, and so on until all ICEV vehicles reaching the target retirement age are scrapped by 2033 and thereafter. The 10 and 20 year lifespans are selected because they roughly correspond to the range of minimum vehicle ages used to qualify for a subsidy in previous vehicle early retirement programs such as “Cash-for-Clunkers” …”

“…The ICEV early retirement simulations are motivated by our LCAs (Section 2.3), which show ICEVs have the highest life cycle (and use-phase) emissions of all the powertrains analyzed, and the precedent set by the 2009 U.S. "Cash-for-Clunkers" program. 72 In the early retirement simulations, ICEV vehicles that have survived to 10 or 20 years old (depending on the simulation) are then scrapped. The scrappage of the old ICEV vehicles is phased in over a 10 year period (2023−2033) to prevent a large and temporary spike in demand for new vehicles that could not be met by industry.…”

Qualifying for a government’s scrappage program to stimulate consumers’ trade-in transactions? Analysis of an automobile supply chain involving a manufacturer and a retailer

“…Some researchers examined the environmental impact of the scrappage programs from the empirical perspective. For instance, by measuring the e¢ ciency of the program in terms of the reduction in greenhouse gas emissions, Morrison et al (2010) and Zolnik (2012) examined the costs generated by the program. Ryan (2012) estimated the e¢ ciency of the scrappage program in pollution reduction.…”