Project at a Glance

Title: Indirect economic impacts of low-emission vehicle standards for heavy-duty vehicles.

Principal Investigator / Author(s): Kornfield, Thomas

Contractor: Jack Faucett Associates

Contract Number: 92-928

Research Program Area: Economic Analysis, Emissions Monitoring & Control

Topic Areas: Impacts, Mobile Sources & Fuels


This study analyzes the indirect economic impacts that could result from the implementation of potential low-emission standards for California-based heavy-duty vehicles (HDVs): It only addresses issues that could arise if the California Air Resources Board (ARB) adopts California-only emission standards that are more stringent than national emission standards. The implementation of such regulations could result in motor carrier operators registering new HDVs outside of California, causing a potential negative impact on California's economy and frustrating efforts to reduce emissions. In addition, firms could decide to delay their purchases of new HDVs and instead refurbish their existing fleet or purchase used HDVs. Effective state regulation of emissions from HDVs is compounded by the flexible provisions of the International Registration Plan, a registration agreement between the states which allows interstate operators to base HDVs in the state of their choice provided that they have an established place of business and accrue a portion of their fleet mileage in that state.

This report not only analyzes the potential economic impacts of possible regulations, but also develops potential economic incentive concepts to reduce the likelihood that HDV operators will move their base operations outside of California if new regulations are adopted. A focus group and case studies were conducted, along with a survey of HDV operators, in order to achieve these objectives. In addition, this report includes an analysis of legal issues at the federal, state, and local level that could prevent the CARB from adopting economic incentives that may mitigate the impacts of the regulations.

Among the different economic incentive concepts considered, four were chosen for inclusion in a simulation model that analyzed potential economic impacts of the regulations: rebates, tax incentives, an emission-based registration fee system and an emission credit trading system. In the absence of more stringent national standards for on-road HDVs, the results of this study support the adoption of an emission-based registration fee system under which HDV operators would be charged fees based on the emission contributions of their HDVs. Such a system could be applied to both in-state and out-of-state vehicles, thereby eliminating the incentive for operators to relocate outside of California while encouraging the purchase and use of low-emission HDVs.

For questions regarding this research project, including available data and progress status, contact: Research Division staff at (916) 445-0753

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