Fighting Air Pollution in Southern California by Scrapping Old Vehicles

This report analyzes the effects of an innovative and controversial program--voluntary accelerated vehicle retirement--that is part of California's plan for complying with federal clean-air standards by the required date of 2010. Under this program, whose implementation is in doubt, during each year from 2001 to 2010 as many as 75,000 light-duty vehicles (LDVs) that are at least 15 years old would be purchased in the greater Los Angeles area and then scrapped. The authors1 analysis of program effects accounts for LDV-market responses including increases in used-LDV prices and consequent migration of vehicles into the region where LDVs are scrapped. The analysis predicts that program-induced increases in used-LDV prices will be between $22 and $271 in 2010; the best point estimate is $66 per LDV. While predicted emission reductions are largest for 2005, the program would almost certainly reduce emissions by between 8 and 28 tons per day in 2010, with actual reductions probably closer to the upper end. The authors analyze program cost effectiveness, conclude that a vehicle-scrapping program should be implemented, and suggest ways the program might be improved.