Abating Greenhouse Gas Emissions through Cash-for-Clunker Programs
Abstract
Policy makers 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. Past and present programs are evaluated to show how regulatory elements in vehicle scrappage programs can be adjusted to maximize GHG savings. It is shown 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, a program framework is presented; at a minimum, it ensures that a cash-for-clunker program offsets GHG emissions attributable to vehicle manufacturing and end-of-life disposal with use-phase emission reductions.
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Article first published online: January 1, 2010
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