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ENDNOTES

1. There is no adding up constraint, or cap, in attainment areas. Even if very source is in compliance with applicable rules, growth and the addition of sources could increase the number of standards violations (exceedance) and push a region into non-attainment. The air quality can even deteriorate further in non-attainment areas. New stationary sources must buy offsets exceeding their own emissions, but new mobile sources (just additional cars in many cases) don’t have to buy offsets.

2. Alberini et al (1994a, 1994b), Harrington et al (1994), Innes (1996), Dudek (1993), Plotkin (1992), Dudek et al (1992), Emerson and McCanlies (1992).

3. According to Dudek (1993) and UNOCAL (1991), some scrapped cars are not replaced, while others are replaced with a lag.

4. Some clunkers would not have survived the 2-3 year life of a MERC even if they had not been retired early. A guestimate of that natural attrition rate is used to shrink a MERC with the passage of time since the EMVR that created it.

5. According to Bishop et al (1993), selection bias - encouraging the retirement of the least valued (least driven) cars - is "the fatal flaw in conventional scrappage programs." Alberini et al (1994) found that while selection bias was a serious liability, EMVRPs could still produce emission reductions more cheaply than many existing and proposed policies.

6. Waivers were created to reduce the impact of emission control efforts on low income households.

7. The US EPA appears to have such a model, and they used it for their guidance document. However, predicted emissions vary only by model year. All cars of the same model year yield the same emissions. Since substantial variability exists, and has been documented by IEPA (1993), more detailed prediction capabilities would be necessary to permit the cessation of vehicle testing.

8. See Parry (1995) for documented discussion of "Pollution Taxes and Revenue Recycling" effects.

9. Emissions fees produce cost-effective results. The marginal control costs end up the same for each emitter. However, an emissions fee produces an efficient result only if the authorities keep the fee at the level where the marginal benefit of resulting emission reductions equals the marginal cost of those reductions. See Milliman and Prince (1989), Nelson (1987), and Welch (1983) for additional discussion of political (adoption), implementation, and dynamic properties of emission fees.

10. Glazer et al (1993) found substantial evidence of tampering, and that it was a big pollution source. A tampering factor was built into an IEPA (1993) EMVRP Pilot Project.

11. This policy option is not mentioned by Innes (1996). Innes’ scope is restricted to "policy regimes that do not require the direct monitoring of vehicle emissions (p 221)."

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