Incentivizing Alternative Fuel Vehicle Transactions: Analysis of Cash-for-Clunkers Transactions for New Alternative Fuel Vehicles

Monetary incentives to accelerate the transition of private vehicle fleets to zero emissions promote sustainability in the transportation sector. Clean Cars for America to incentivize transactions for new battery power vehicles is a program in furtherance of sustainable transportation goals in the United States. Unfortunately, data on transactions for new alternative fuel vehicles (AFVs) are scarce so empirical research to explore the costs and/or the benefits of such programs is also scarce. Analysis of transactions for new AFVs from a past, national vehicle retirement program known as Cash for Clunkers provides a rare glimpse into the economic costs and into the environmental benefits of monetary incentives. Analysis of transactions for new AFVs also provides an empirical context for a future, national retirement program such as Clean Cars for America. To that end, the analysis estimates Greenhouse Gas (GHG) emission reduction from a subsample of Cash-for-Clunkers transactions for new AFVs. Overall, incentivizing AFV transactions effectively decreases GHG emissions though regional differences may necessitate dynamic, rather than static, voucher amounts so as to harmonize such differences.