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Regional Policies for Gross Emitting Vehicles


John Merrifield
Division of Economics and Finance
University of Texas - San Antonio
San Antonia, TX 78249-0633



Even without the recent revision of air quality standards, many regions would have continued to suffer from their inability to keep their emissions below the National Ambient Air Quality Standards. Unless reversed by Congress, the recent revision will greatly increase the number of non-attainment areas.

The easy emission reductions available from new cars and stationary sources are largely tapped out. Current and potential new non-attainment areas must achieve the lion’s share of the additional reductions necessary to bring air quality to acceptable levels from the existing fleet of cars, especially the relatively few gross emitters responsible for a disproportionate share of total vehicle emissions. Many emission reduction efforts, especially vehicle use, maintenance, and early retirement incentives must be tailored to local conditions.

The federal government has issued guidelines for vehicle retirement programs, and three states have programs in place. Key features of each are discussed. Economic theory and legal, technology, and political concerns are the basis of an informal analysis and comparison of policy options. The article concludes with policy recommendations.



The Clean Air Act Amendments (CAAA) of 1970 and 1977 produced major air quality gains by subjecting new cars and large stationary sources to strict controls. The 1990 CAAA further tightened the screws on new cars, but the easy-to-achieve gains and the technofix strategies were already largely tapped out. The existing fleet (especially the 10% responsible for the lion’s share of auto emissions [Peterson and Stedman 1992; Bishop et al 1993]; 45% of volatile organic compound emissions and 90% of carbon monoxide emissions come from cars [Innes 1996]) must be the source of most air quality and cost-effectiveness gains. That means some mix of retrofits, improved maintenance, faster fleet turnover, reduced congestion, and better driving habits. The latter could perhaps include efforts to keep gross emitters away from congested areas, and air quality monitors, especially on days when atmospheric conditions are most conducive to the concentration of pollutants. Preliminary data (UNOCAL 1991, BAR 1994, and Alberini et al 1995) support the hypothesis that such approaches will produce cost-effective emission reductions. The requirements of the 1990 CAAA and associated rules do not create enough of the necessary incentives, and are often in the way. According to CAAA expert Alan Krupnick (1997), the Environmental Protection Agency (EPA) is "severely limited by the CAAA in its ability to implement new ideas."

Despite major emission reductions, there are still many non-attainment areas and the 1990 CAAA created tougher, ostensibly mandatory sanctions (Anderson and Howitt 1995). In recent Congressional testimony, Krupnick (1997) said the new standards would be "incredibly expensive" to implement. However, even without tougher standards, growth threatened to push additional regions into non-attainment (1) status. Non-attainment means the ambient air quality standard for one of the criteria pollutants (most frequently ozone) was exceeded on four different dates in a three-year period. An exceedance occurs when any monitoring station registers a pollutant level, averaged over one hour, above the standard. Unless Congress blocks implementation of the new standards, maintaining or achieving attainment will be even more difficult, though the adoption of a proposed increase in the number of hours over which air quality measurements are averaged to determine whether air quality standards have been exceeded would provide some relief. The current, rather curious, one station, one-hour definition of an exceedance (Lis and Chilton 1994) puts an especially high premium on cutting spatially concentrated, peak emissions during times of adverse weather conditions (hot, still). That puts a premium on incentives-based policies tailored to local conditions. Failure to properly tailor policies could unnecessarily inflate pollution abatement costs, and or cause failure to achieve and maintain official attainment status (and associated economic burdens) even with some significant, but not sufficiently targeted, emission reductions. The new eight-hour, 85 parts per billion (ppb) standard now being phased in will slightly reduce the importance of hourly peaks. However, since the one-hour standard was at 125 ppb, the new standard will increase the importance of much lower daily peaks.

The time-of-day and seasonal use patterns of the oldest, disproportionately dirtiest, cars are not documented anywhere. However, disproportionate use during peak travel times with old-car-friendly driving conditions (summer rush hours) seems reasonable; the times when an exceedance is most likely. The gross emitter problem--where and when they are driven, as well as their presence within the existing fleet--is the focus of this article. The earliest efforts to address the gross emitter problem were limited to the elimination of gross emitters through purchase and retirement. Environmentally-motivated vehicle retirement (EMVR: crushing, shredding, even disassembly and resale of parts) pilot projects by General Motors, the Office of Technology Assessment, the Environmental Defense Fund (EDF), and Resources for the Future (2) identified key issues. They include the best design of EMVR programs, whether they should be continuous or sporadic, and whether they are a second best or temporary component of a region’s vehicle emissions policy. Part of the last issue are maintenance incentives, and factors that might influence when and where gross emitters are driven. Most of those issues have not been directly addressed before. Addressing them is the aim of this article. The next section describes the current regulatory environment for vehicle emissions, and the resulting incentives, social benefits, and costs, including some previously overlooked. Section 3 identifies the general policy options, and puts them in perspective. Several that have not been suggested previously, even in Innes' (1996) extensive examination of auto emission reduction strategies, are included. Section 4 recommends a general policy that can be tailored to local conditions. Section 5 is a summary and concluding remarks.

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