University of California Transportation Center

The increasing cost of additional air pollution control has stimulated a search for less expensive market-based regulatory approaches. One market-based approach widely embraced by regulators and politicians is the accelerated retirement and scrappage of old automobiles. Businesses are granted emissions reductions credits by air quality regulators in exchange for removing old and presumably high-polluting automobiles from the road. In reviewing the data from recent programs and exploring assumptions made in evaluations of such programs, it was found that the air quality benefits are uncertain and may be small and that the costs may be higher than those for many other emission control strategies. In some regions and under some conditions, accelerated retirement programs may be much more effective than in other regions and under other conditions.