Vehicle Scrappage Policies for Transportation Decarbonization

The U.S. aims to reduce economy-wide greenhouse gas emissions by 50% (from 2005 levels) by 2030, and to net zero by 2050, in line with international climate agreements. Decarbonizing transportation—the highest emitting sector in the U.S. economy—is essential to meeting these goals. 

Electric vehicles have significantly lower emissions than gasoline vehicles and are crucial to decarbonizing transportation. However, the current rate of fleet turnover is not fast enough to meet climate goals. Furthermore, without thoughtful policy and planning, the transition to electric vehicles could increase inequities in transportation accessibility. 

Vehicle scrappage programs, like Cash for Clunkers, provide a monetary incentive to retire an old vehicle and replace it with a more sustainable alternative. If designed appropriately, a vehicle scrappage program could accelerate fleet turnover and speed up emissions reductions, while supporting transportation justice. 

Link to the full article in Environmental Research: Energy.

Key findings

To achieve a significant reduction in greenhouse gas emissions, a scrappage program should carefully balance the following priorities: 

• Avoid replacing vehicles that are already near retirement 
  Establish an age limit or mileage cap for scrapped vehicles 
• Maximize the change in emissions per vehicle 
  Retire older, larger, gas vehicles with high emissions and replace with clean electric vehicles 
  Include non-vehicle replacement options, like E-bikes or transit passes 
• Optimize program participation within a given budget 
  Allow subsidies to be applied at the time of purchase, not as a tax credit  
  Make subsidies large enough to incentivize vehicle retirement, but no larger
• Support transportation justice 
  Scale the subsidy level with income and allow used EVs as replacement vehicles 
  Reduce administrative barriers and engage with underserved communities