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7 Evaluating Inspection and Maintenance For Costs and Other Criteria Full evaluation of inspection and maintenance (LM) programs requires a broader assessment thanjust an estimation of emissions reductions. Costs and cost-effectiveness are critically important criteria for determining whether social resources are being well spent and for making decisions about improving I/M program design. The distribution of costs among motorists can also affect public acceptance of I/M and can be a key factor affecting behavior and, ultimately, emissions reduction. Other factors that influence emissions reduc- tions are compliance end enforcementlevels end public acceptance. Finally, new technologies will profoundly affect the design and evaluation of I/M pro- grams in the future. These issues are discussed in this chapter. EVALUATING COST AND COST-EFFECTIVENESS OF I/M Evaluation of an I/M program must consider the costs of the program. Costs are important for a number of reasons. The level of program costs can change the behavior ofthose affected. We discussed in Chapter 6 the impact of high repair costs on motorists' decisions to scrap vehicles earlier than they otherwise would. High repair or compliance costs can also cause motorists or technicians to avoid an I/M program by driving their vehicles without legal registration or by tampering with the pollution-controT equipment. In general, if an I/M program evaluation reveals that an existing program is expensive 169
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~ 70 Evaluating Vehicle Emissions I/M Programs relative to alternative policies to reduce emissions, modifications might need to be made to make it more cost-effective, or it might be dropped and replaced by more cost-effective alternatives. The first section discusses the concept of cost in the context of I/M and its measurement. Following is a review of the different components of I/M costs and how each is measured. Existing evidence about the magnitude of costs from earlier studies is also reviewed. We then move on to combining costs and emissions reductions in a discussion ofthe cost-effectiveness of I/M. A set of findings that includes discussion of costs and cost-effectiveness is contained at the close of this chapter. Measuring Costs There are a number of different ways to measure the costs of I/M. Table 7- l summarizes the cost components discussed in this and the following sec- tions. On the one hand, there are motorists' costs, which are the relevant costs for determining behavioral responses to I/M and for determining which socioeconomic groups are most affected by I/M costs. However, for evaluat- ing the overall costs or "social costs" of I/M, one must look at the full resource costs that are paid by all parties affected by the program. These two mea- sures of cost can be different if, for example, some repairs to the emissions systems are done under warranty. Repairs done under warranty are not paid by motorists but still represent real costs, in this case, to vehicle manufacturers. However, many programs exempt newer vehicles from I/M programs until well past the emissions warranty period for many emissions-control compo- nents. Another difference can arise if I/M program costs, such as the cost of the emissions test, are partially subsidized by the state implementing them. Taxpayers in general might be paying for a portion of these programs. How- ever, this cost to taxpayers represents a real cost ofthe program, even if those costs are not being paid directly by motorists in test fees. The full social cost of an I/M program is the measure of costs that should be used to examine cost-effective improvements in I/M and to compare I/M with alternative pro- grams. It is important to note that activities in primarily one cost category vehicle repair actively achieve emissions reductions.] The other categories, including Other costs that achieve emissions reductions include the additional cost of selling or scrapping one vehicle and buying another.
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Evaluatir~gI/Mfor Costs and Other Criteria TABLE 7-1 Evaluating I/M Costs 171 Cost Category Components of Cost Comments Cost of finding Test or inspection cost Differs by test type (e.g., centralized failing vehicles (e.g., in I/M lane, by remote vs. decentralized; remote sensing) sensor, or on-board diagnostic readout) Motorist costs including Alternative possible assumptions travel time and queuing time about the value of time (for lane inspection) Vehicle repair Resource cost of repair (if Information about the costs and and associated done at repair shop) effectiveness of repairis incomplete fuel economy Expenditures on parts and improvements value of time (for self-repair) Cost of reinspection Fuel economy savings Some vehicles difficult to repair, requiring many trips to repair shops, increasing total cost of repair Average fuel economy effects of emissions repair appear to be small Program Costs of administering These costs are a small share of the administration program (aside from direct program; important to avoid double and oversight cost of testing) counting costs Enforcement costs Evaluation costs Enforcement efforts important to achieve emissions reductions; enforcement likely to affect compli- ance, but no research has been done on the magnitude of this link Thorough evaluation can be expensive; public-goods aspect of evaluation (evaluation in one state can provide evidence for other programs) the cost ofthe emissions testplus motorists' out-of-pocket and time costs, are simply transection costs under the design ofthe currentI/M program. Alterna- tive program designs, such as the use of remote sensing or on-board diagnos-
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~ 72 Evaluating Vehicle Emissions I/M Programs tics (OBD) for identifying high-emitting vehicles, have the potential to lower overall costs by reducing the costs of finding the high emitters.2 Costs of Finding Failing Vehicles Testing Costs The reported price of an emissions test under traditional lane tests canbe used as an indicator ofthe cost of administering the test. However, this price might not always accurately capture the full resource costs of the testing process. Test price and true costs can diverge for several reasons. The states that have adopted centralized enhanced I/M have contracted out the emissions-testing services. The agreed-upon price oftesting is an outcome of bargaining between the state and the contractor. Because the contractor has the status of a regulated monopoly, it is possible that the price could be higher than the approximate marginal cost ofthe service. However, evidence to date suggests that competitive bidding procedures in most states lead to prices that are at or even below cost.3 Also, states might subsidize the costs of the test, and the price might underestimate the true cost. Another pitfall of counting test costs is that administrative costs to the state might be included in the test price. (Adrn~n~strative costs typically are lumped with oversight and evaluation costs discussed later.) Testing or inspection costs differ across I/M program types. Costs tend to be higher in decentralized programs than in centralized programs, primarily because of economies of scale in testing and because test fees for decentral- ized programs are in some instances market-~iven (e.g., in the California and Pennsylvania I/M programs). High-volume testing spreads the fixed costs of the inspection across many vehicles.4 2Although remote sensing has the potential to lower the overall costs of finding high emitters, experience to date with using remote sensing within an I/M program for this purpose has not been entirely successful. Arizona recently abandoned a program to use remote sensing for this purpose. Contractors in some states are losing money with current contracts. 4For example, the price of a test in the enhanced decentralized program in Califor- nia is over $40, whereas in Maryland's centralized program, it is $12.
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Evaluating I/Mfor Costs and Other Criteria 173 Overall, the costs of finding a high-emitting vehicle have been relatively high in traditional lane programs in which all vehicles are tested on a regular basis. Alternative ways to identify high emitters that reduce the number of vehicles inspected or change the method of identification, such as through the use of vehicle emissions profiling or remote sensing, might result in lower costs. Harnugton and McConnell (l 993) found in a simulation analysis that an I/M program relying exclusively on remote sensing to identify high-emitting vehicles was more cost-effective than traditional I/M programs with universal inspection. Lawson et al. ~ ~ 996b) reported high-emitter identification at costs as low as $9 per identified vehicle by remote sensing. It should be noted that Arizona recently halted a pilot program using remote sensing to identify high emitters (Anzona DeparDnent of Environmental Quality 2000), concluding that the emissions reductions achieved by the program did not justify the cost and inconvenience. There continues to be debate about the real effectiveness of this program, however. There was a period oftime between the reading ofthe remote-sensing results and the contacting of the vehicle owner to come for a confirmatory test, and some ofthe vehicles might have been repaired during this time. Also, the cutpoints for the remote sensors and the IM240 confirma- tory test appear to have been set at different stringency levels. It is important for programs to continue to search for cost-effective ways of identifying and reducing the emissions of high-emitting vehicles. Motorists' Costs In a traditional I/M program, with vehicles inspected annually or biennially, a large share ofthe overall costs of I/M is paid by motorists for the inspection process. Studies of centralized enhanced I/M in Arizona (Harrington et al. 2000) and the decentralized program in California (IMRC 2000) found that over two-thirds of the total costs go toward the inspection process. These costs include test costs (described above) and motorist costs. Motorist costs include out-of-pocket expenses of bringing a vehicle in and the time costs associated with traveling to the test site, waiting for the vehicle during the test process, and waiting in line for the test. The out-of-pocket expenses, which include operating expenses of driving the vehicle to the station are likely to be fairly small, but the time costs can be large. For example, estimates of the average time spent to get to and from the inspection and the time at the inspec-
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~ 74 Evaluating Vehicle Emissions I/M Programs lion station in a centralized program range from 45 minutes to ~ hour (McConnell ~ 990; EPA I 992b; Harr~ngton et al. 2000. Repair Costs Laboratory Studies of Repair Costs Several early studies on the cost of performing emissions repairs were done under controlled laboratory settings where a relatively small number of vehicles were repaired and tested by highly trained technicians. In early as- sessments of I/M, the U.S. Environmental Protection Agency (EPA ~ 98 l) forecasted that the repair of emissions equipment would be relatively easy and inexpensive. However, the difficulty and cost of repair for a relatively small number of vehicles is emerging as one ofthe biggest challenges facing current I/M programs. For example, some failing vehicles in the Arizona program were retested many times, and their emissions levels of hydrocarbons (HC) and nitrogen oxides (NOX) bounced back and forth with sequential repairs (Harnngton et al. ~ 998~. As discussed below, both EPA ~ ~ 992b) and Califor- nia I/M pilot (CARB ~ 996) studies of repairs encountered significant numbers of vehicles that could not tee brought into compliance with emissions standards. EPA (1992b) forecasted the cost of repair in their assessment of the enhanced I/M program based on laboratory-based repairs and the cost of parts plus some markup.6 The results of this study are presented in Table 7-2. However, many vehicles still did not meet the emissions standards after these repairs were made. Further, emissions reductions sufficient to meet the stan- dards were assumed, but their costs were not estimated. Table 7-2 shows that the EPA cost estimates are lower than the other studies for the magnitude of emissions reductions assumed to have occurred. For example, the California I/M pilot study repaired ~ 53 vehicles at an average cost of $420. sThe dollar value of the time spent depends on the value of the motorists' time, which is discussed by Deacon and Sonstelie (1985), Small (1992), and Calfee and Winston (1998~. The most common estimate ofthe value oftime used in similar studies is about half of the average wage rate. However, the value of time depends on what activity is being given up (leisure or work) to get a vehicle inspected, which is dis- cussed by McConnell (1990~. 6The sampling method used by EPA to recruit vehicles into this study was never made clear.
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Evaluating I/Mfor Costs and Other Criteria ~ 75 TABLE 7-2 Comparison of Costs of Repair and Estimates of Repair Effectiveness Across Repair Studies Change in Emissions (g/mija - No. of Average HC Vehicles Cost CO NOX Emissions Emissions Emissions EPA repair data setb Tailpipe repair (IM240) 266 $120 1.89 32.1 Evaporative repair $38 Haskew et al. (1989) 24 $245 2.14 28.8 Sun Company (Cebula 1994) 155 $339 3.28 52.2 0.88 Total Petroleum 103 $390 1.18 12.26 (Loader and Livo 1994) Orange County high-emitter 91 $630 4.96 42.7 0.40 repair study (Lawson et al. 1996b) California I/M pilot study 153 $420 1.69 15.1 0.82 (CARE 1996) Arizona enhanced I/M (Har- rington et al. 2000) Tailpipe repair (IM240) 66,002 $145 1.02 15.5 1.13 Evaporative repair 15,917 $29 California IMRC (2000) $ 128 tailpipe repair (IM240) aAll emissions measurements were made with the Federal Test Procedure, except for Arizona I/M and the Orange County studies, which used the IM240 test, and California IMRC, which used the Acceleration Simulation Mode test. bData set of vehicles repaired at EPA labs and used to estimate changes in MC/CO emissions resulting from repairs (EPA 1992b). Several other laboratory repair studies have helped to shed light on repair and the cost of repair. Table 7-2 shows the costs and emissions benefits esti- mated for these studies. Haskew et al. (1989) reported the average cost of repairs for early-technology closed-Ioop-system General Motors vehicles that were repaired to pass Michigan' s exhaust testing program. The Sun Company (Cebula ~ 994) and the Total Petroleum (Loader and Livo ~ 994) studies were based on relatively small numbers of recruited vehicles, and the repairs were
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176 Evaluating Vehicle Emissions I/M Programs done by highly trained technicians who were told to repair vehicles up to a cost of $450. These studies were not connected with I/M. They were evaluations of scrap-or-repair programs initiated by major of] companies in search of emissions-reduction credits to offset emissions increases at their facilities. Remote sensing was used in both studies to identify high-emitting vehicles, whose owners were then offered an opportunity to sell the vehicle for a fixed price or to receive a free repair of the emissions system. The ~ 995 Orange County study (Lawson et al. ~ 996b) repaired 9 ~ high-emitting vehicles (identi- f~ed by remote sensing) using the BAR90 test, with an average repair cost of $630. The repair cost limit in that study was set at the blue book value ofthe vehicle being repaired. Sierra Research, under a contract with the American Petroleum Institute (APl), also conducted a study of the causes of failures of high-emitting vehicles and examined the most effective repairs. However, no costs were included in that analysis (APT ~ 996~. The California I/M pilot study, discussed in Chapter I, also recruited vehi- cles to test the effectiveness of emissions repairs. In this study, automotive- service-excellence (ASE)-certified technicians with at least ~ 5 years of experi- ence in vehicle repairs were allotted up to $500 or more to repair failing vehi- cles.7 There were ~ 53 vehicles in the study that were either completely re- paired to pass an emissions test or that exceeded the repair cost limit. Figure 7-1 depicts the cumulative frequency distribution of net emissions reductions. The net emissions reductions are defined as the sum of one-seventh the emis- sions reductions of carbon monoxide (CO) plus the emissions reductions of NOxand HC ~~/7(CO) + NOX+ HC). This approach to aggregating emissions reductions is describedinIMRC (l 993~. Because ofthe skewness of excess emissions among failing vehicles, 20% ofthe repaired vehicles produced 63% ofthe emissions reductions. Additionally, 19 ofthe 1 54 repaired vehicles had an increase in net emissions after repairs. Figure 7-1 shows that the increase in net emissions from these 19 vehicles was large enough to displace the small emissions reductions gained by a substantial number of vehicles. No net emis- sions benefits were achieved from the repair ofthe 50°/O ofthe vehicles with the lowest emissions reductions, in pert because ofthe fraction that had a net increase in emissions (1/7(CO) +NOX+HC). Figure 7-2 shows little relation- ship between repair costs and net emissions reductions in the California I/M pilot study. According to CARB (1996) when the repair costs exceeded $500 the technicians were asked to treat CARB as a client and request permissions for further repairs. This resulted in repair costs greater than the $500 limit for many vehicles.
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Evaluating I/Mfor Costs and Other Criteria Im . 0 80 - Or 60 - A,, 40 ~ DO ._ ~ 20 it: .,-. / : 0 20 40 60 80 100 % of Repaired Fleet 177 FIGURE 7-1 Cumulative frequency distribution of net emissions reductions for vehi- cles repaired in the California I/M pilot study (1/7(CO) + Nox + HC). All these repair studies are not likely to represent repairs as they would be done in an operating I/M program. The training and experience level of the repair technicians is likely higher than it is for many small private repair facili- ties. Some repairs undertaken in these studies were more extensive than those that would be approved by a vehicle owner interested only in passing the I/M test. Even under these conditions, however, some vehicles could not be brought into compliance with the emissions standards. It should also be noted that the way in which vehicles were recruited, the cost limits placed on repairs, and the degree to which the vehicle owner participated in repair decisions varied across these studies. In addition, diagnosis, repair, and the costs of repair can be different for vehicles equipped with new emissions control technologies and on-board diag- nostic IT (OBDIT). Features of OBDIT systems might make diagnosis and repair of vehicles easier, but the costs of repairing some vehicles whose emis- sions are close to the tight OBD standard could be high. Some of these re- pairs, such as those to sensors, will only affect the monitoring capability ofthe system and will not directly reduce emissions. In-Program Studies of Repair Costs Recently, data have been collected from ongoing I/M programs on the actual costs of repair for each round of I/M testing. Arizona and California
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78 Evaluating Vehicle Emissions I/M Programs 50~ ~ 30- 0 20- O 10- ~0 0- O -10 ._ ~ , . v, 3 -20- . . .: . . - 1 l . 0 500 1~000 1~500 2~0~00 Repair Cost ($) FIGURE 7-2 Net emissions reductions versus repair costs for vehicles repaired in the California I/M pilot study. currently require owners of all repaired vehicles to report the repairs and the cost of repair. These data have been analyzed by Ando et al. (2000) for the Arizona program and by the IMRC (2000) in California. These data are begin- ning to provide better estimates of repair costs (end the associated emissions reductions) because they are based on reported data for a large number of vehicles in ongoing I/M programs as opposed to laboratory studies where costs might be less a factor. However, the committee recognizes that the collection of repair cost data from motorists might be problematic due to some of the issues discussed later in this section. Table 7-2 also includes the average per vehicle cost of repair and the average per vehicle change in HC, CO, and NOX emissions from in-program repair studies. It is important that repair costs be considered in the context of the associated change in emissions. For the in-program repair studies, Table 7-2 identifies whether the repair is to the tailpipe only or to the evaporative system (e.g., gas-cap repair). Evaporative systems repairs, at least the type done in I/M programs, tend to be much less expensive than tailpipe repairs, but He emissions reductions are difficultifnot~mpossible to estimate. Examination of Table 7-2 shows that the costs oftailpipe repair in both the California and Arizona programs are somewhat higher than the EPA estimate of tailpipe repair and that emissions reductions are much lower than assumed by EPA.
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Evaluating I/Mfor Costs and Other Criteria ~ 79 However, the cost estimates for the California and Arizona programs are a good deal lower than the estimates in the Sun Company, Total Petroleum, and California I/M pilot studies, possibly because vehicles were being repaired to stricter cutpoints in these studies. Repairs done by experienced technicians in these laboratory studies might also be more complete and lasting than repairs done by the average technician, and costs were not as much of a factor as they are for vehicle owners. The average repair costs from the Orange Coun- ty study are the highest ofthose shown in this table, inpartbecause the vehi- cles repaired had a repair cost limit equal to the vehicles' blue book values. Owners are likely to want to pay the minimal amount necessary to do what it takes to allow their vehicle to pass the test, which is reflected in average costs of repairs for in-program studies. Some difficult data issues have emerged with attempts to measure repair costs in ongoing I/M programs. Data problems in assessing costs of repair are hardly surprising under the current regulatory climate. Until recently, few states collected data on emissions repairs and their costs, and fewer still pro- vided incentives to collect accurate data. In both the Arizona and California programs, there are a good deal of missing data in both the repair and cost information. In Colorado, only 13°/O ofthe failing vehicles actually report repair costs as required (Colorado Air Quality Control Commission ~ 999~. In other cases, costs are reported as zero. Costs reported as zero are problematic when accounting for the full social costs of I/M because they can occur for several reasons: They can reflect repairs done under manufacturer warranty, they can reflect repairs done at home by do-it-yourselftechnicians, or they can simply reflect missing data. Even when repair costs have been reported, program administrators are often skeptical about the accuracy of the reported costs. Despite these potentialproblems, studies of repairs of ongoing I/M pro- grams in Arizona and California show very similar estimates of average repair costs: average repair costs in California are $128 per vehicle and in Arizona they are $120. Colorado's repair costs in 1999 ranged from $l I S to $250, depending on program type and testing configuration (Colorado Air Quality Control Commission 1999~. Table 7-2 shows only estimates ofthe average costs of repair. It does not tell us anything about the variation in costs across vehicles. The underlying distribution of repair costs turns out to be very skewed, with the greet majority of vehicles being repaired at relatively low costs and a small number of vehi- cles incurnug very high costs for repairs. Figure 7-3 shows the distribution of repair costs by mode! year in the Arizona program. The average repair costs .
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188 Evaluating Vehicle Emissions I/M Programs more likely to be clean would be tested less frequently. Profiling appears to be cost-effective. A study by a workgroup of the Mobile Sources Technical Review Advisory Subcommittee (EPA 1999m) predicted that California's current high-emitter profiling program would be relatively cost-effective, but that study was done before the program began. As discussed in Chapter 4, the recent IMRC study (2000) finds that CaTifornia's high-emitter profiling does not do much better than random selection at identifying high-emitting vehicles in any mode! year. Again, more analysis needs to be done to assess both the costs and the effectiveness of alternative methods for high- and low-emitter profiling. Model-Year Exemption The IMRC (2000) looked carefully at the cost-effectiveness of I/M by model-year vehicle. That study found that I/M is much more cost-effective on pre- ~ 99 ~ model-year vehicles than on newer vehicles. The pre- ~ 99 ~ vehi- cles accounted for 95°/O ofthe emissions-reduction benefits and for only 60% ofthe costs. The cost-effectiveness ofthe older vehicles is about $3,500 per weighted ton ofemissions (HC, CO, end NOx) compared with $35,000perton from the newer mode] years. Remote Sensing Remote-sensing measurements can be used either in addition to a testing program or in lieu of scheduled testing. Chapter 4 describes previous studies in which remote sensing was used to identifier high-emitting vehicles. Harring- ton and McConnell ~ ~ 993) examined both the cost-effectiveness of regularly scheduled I/M compared with a remote-sensing program and the effect of adding remote sensing to an ongoing periodic I/M program. The study found that as a tool for identifying high-emitting vehicles in need of repairs, remote sensing compared favorably with the conventional universal testing under currentI/M pro "rams. For a given level of emissions reductions, remote sens- ing resulted in lower inspection and driver costs and lower vehicle-repair costs than universal periodic testing. The study also found that if periodic I/M is in place, remote sensing between I/M tests improves overall cost-effectiveness of the program. However, as described previously, a program to use remote
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Evaluating I/Mfor Costs and Other Criteria ~9 sensing to identify high emitters in Arizona was halted because ofto ~mplemen- tation difficulties. Other Potential Program Modifications A number of other improvements or modifications to I/M programs have been suggested but have not been carefully studied. Some states are imple- menting subsidies for repair or voluntary scrappage programs. Changes in waiver and exemption policies have been considered. Policies such as repair insurance have also been suggested. The cost and emissions reductions of differentpolicies to improve enforcement also deserve more attention. Finally, as noted above, some repairs are much more cost-effective than others. Policies that induce cost-effective repairs, such as technician training and specification of repair procedures or even emissions-based fees, should be further explored. COMPLIANCE AND ENFORCEMENT Enforcement of program compliance ensures that vehicle owners bring vehicles to a test station to get tested and then get repairs and retests if they fail. It also ensures that stations perform proper inspections and repairs and that certifications of compliance are not fraudulently obtained. Those are some ofthe most critical elements ofthe program as well as the most difficult ones. If enforcement mechanisms are not effective, then motorists faced with the cost of repairs will simply not get tested or will fraudulently comply. That defeats the purpose of the program. Testing clean cars does not provide any benefit; only repairing or removing high-emitting vehicles reduces fleet-wide · . emlsslons. Enforcement is important because there is evidence that motorists, testing personnel, and technicians have found many ways to avoid compliance with I/M. Decentralized programs have come under particular scrutiny because, it is argued, they present many opportunities for testing fraud. Hubbard ( 1998) found evidence of incentives for such behavior in California's decentralized Thor a simulation of the potential cost-effectiveness of an emissions-fee policy compared with the current I/M program in Arizona, see Ando et al. (2000~.
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190 Evaluating Vehicle Emissions I/M Programs VM program. Hubbard found that consumers are able to provide incentives to station technicians who then allow them to pass. Motorists therefore shop around to find stations most likely to respond to incentives. Monitonng and enforcement costs are likely to be higher in a decentralized program with thousands oftest stations, though testing fraud has been reported in all program types. Motorist Compliance The level of motorist compliance with the program . IS Epically referred to as the compliance rate. The compliance rate refers to the percentage or fraction of cars that are required to participate in an VM program that actually do so. MOBILES, which is discussed in Chapter 5, allows states to claim credits for a 96% compliance rate. This means that96 of 100 eligible vehicles registered in an VM program area are assumed to comply with vehicle- emissions-testing and to obtain repairs if they fail the test. Unfortunately, states are not required to verify their compliance rates to EPA. The new version of MOBILE, MOBlLE6, requires states to input compliance rates. Studies have shown that some motorists illegally register their vehicles outside the VM area but continue to ~nve in the area in states having an VM program determined by county-line boundaries. Stedman et al. ~ ~ 997) documented the migration of registration of high emitters outside Denver's centraTizedIM240 program area, but they continue to be driven in the area. Ohio experienced this illegal registration in non-VM areas at the start of their IM240 program (McClintock 1999b). Data collected in the Phoenix, Arizona, and in the Colorado I/M programs also suggest that a high number of high-emitting vehicles failing the I/M test never appear for reinspection (Wenzel ~ 999a; Wenzel et al.2000; Ando et al. 20004. In Colorado, the percentage of unresolved failures in the enhanced IM240 program increased from 23% to 27% between ~ 998 and ~ 999 (Colo- rado Air Quality Control Commission ~ 999~. However, many ofthe vehicles that never appear for reinspection can be observed operating in the VM area by license-plate reading as part of a remote-sensing program (Wenzel ~ 999a; Wenzel et al.2000~. The negative effect caused by this poor compliance ele- ment has not been well documented. There are two systems for enforcing compliance on vehicle owners: windshield stickers and registration denial. These two systems vary in effec- tiveness and cost. They are discussed in some detail in the following sections.
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Evaluating I/Mfor Costs and Other Criteria 191 Windshield-Sticker Enforcement This enforcement mechanism consists of placing a plastic sticker in the windshield to show that a vehicle is in compliance. Enforcement occurs when a police officer identifies a vehicle that has either no sticker or an expired sticker. Although sticker enforcement has historically performed badly in the United States, it is still used in Mexico and certain local areas in the United States. The sticker system relies solely on police efforts to stop and ticket motorists only because they did not complete the testing process. Counterfeit and stolen stickers are another problem. Legitimate stickers mustbe produced and distnbuted and carefi~ly handled to prevent unauthorized distribution. This adds another layer to the auditing and oversight requirements of the program. Another problem that reduces police incentives to enforce is that it is difficult to determine whether a car without a sticker is required to be tested. Registration Denial Registration denial works byrejecting an application forinitialreg~stration orre-registration of a vehicle that does not have a certificate of compliance (or a waiver, if allowed). This system was mandated in the Clean Air Act Amendments of ~ 990 as the method for enforcing the enhanced I/M program. It works very well in the United States for several reasons. First, the police can tell by looking at the license plate on a car whether the registration is current. Second, the police are more willing to enforce vehicle-registration requirements because registration fees generate revenue for local government, the registration system provides a mechanism for dealing with stolen vehicles, and similar law-and-order functions are appealing to the police. Third, the police are no longer enforcing the air-pollution standards but rather the vehicle- registrationrequirement. Fourth, the vehicle-registration of lice, not the police, decides whether a vehicle is required to have a certificate of compliance. For registration-denial enforcement to work properly, a test schedule must be adopted that clearly determines when a vehicle is required to be tested. it also is important that the vehicle be properly identified when it arrives at the test station so that a clean vehicle is not used in place of the vehicle for which a certificate of compliance is needed. It is preferable under the registration- denial system to have the JIM program automatically update the motor vehicle depardnent's computer system by indicating that a vehicle is in compli- ance.
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192 Evaluating Vehicle Emissions I/M Programs Testing Station Compliance Another aspect of the enforcement of I/M programs focuses on the in- spectionprocedure. Any fraudulent variation ofthe inspection procedure will negatively affect the I/M program. I/M inspection procedures can vary from testing a vehicle that is not fully warmed up to clean piping. Clean piping is the practice of inspecting a known clean vehicle but entering the vehicle identifica- tion of a dirty vehicle. States use various methods to prevent fraudulent test- ing. Most states have developed a process of covert or "undercover" vehicles that are sent to I/M testing stations to confirm correct testing operations. In Colorado's enhanced IM240 program, inspectors have been caught "clean piping" by entenug data into the test system that belong to a vehicle not being tested. Video cameras are now used for surveillance at the centralized testing facilities. Software programs are also used to ensure proper testing. These programs verify testing frequencies, operator authorization, and other data. A variation from the norm triggers an overt or covert inspection by a state offi- cial. A fine or license suspension for test or repair stations may result from the state's enforcement operation. California publishes enforcement activities and associated penalties in its I/M newsletter. The federal government also re- quires annual reporting of compliance and enforcement data to EPA by states. Audits provide an indication of the degree to which the testing aspect of an I/M program is being operated as it should. Two types of audits are done on testing stations: · Overt audits (the station being audited is aware of the audit): This type of audit checks to see if the appropriate equipment is in place and is being operated properly. Also checks are made to see whether records are kept as required and whether technicians have the requisite training. · Covert audits (the station being audited is unaware of the audit): Vehicles, set to fait tests in known ways, are taken to stations surreptitiously to see if the testing station properly fails the vehicle. Selection of stations for covert audits is based on information indicating abnormal operation or the time since the last audit. Quality Assurance Additional safeguards are needed to ensure motorist compliance. Motor- ists will look for ways to avoid compliance that do not involve missing sched-
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Evaluating I/Mfor Costs and Other Criteria 193 uled tests or fraudulently passing the test. It is essential, therefore, for the enforcement system to prevent avoidance to the extent possible. Several strategies need to be used. Vehicle owners must be prevented from avoiding testing through manipulation of the title or registration system. For example, if diesel vehicles are not tested, vehicle owners should not be allowed to de- cIare that the vehicle is diesel powered without some proof or verification. Another way to avoid annual testing is to transfer the title ofthe vehicle or, in other words, to sell the vehicle. To avoid this manipulation, all vehicles should be required to be tested before they are sold. Additionally, any change in registration address from the I/M area to a non-/M area should be verified through some other means. By changing the address on the registration for example, to a relative 's address in another city the vehicle owner can avoid inspection even though the vehicle is still operated in an I/M area. Requiring proof of the move is necessary; however, city and county motor vehicle de- partrnents have very little incentive to police this requirement. In addition, care needs to be taken to prevent the theft or improper issu- ance of certificates of compliance. Because registration clerks are in the position of deciding whether to issue a registration to a particular motorist, safeguards are needed to prevent and detect corruption of this function. Re- pair and retest stations also should be held liable for missing documents by paying monetary fines that exceed the "street value" of a certification. Evaluating Motorist and Station Compliance Evaluating the adequacy of enforcement and the level of compliance in a program requires monitonug vehicles, testing stations, end repair facilities. The motorist compliance rate needs to be measured on an ongoing basis. A ran- dom roadside pullover of a statistically significant sample of vehicles to deter- mine compliance is one mechanism for achieving such measures. Another mechanism is remote sensing or automatic license-plate readers. Both ap- proaches can be used to help determine two critical measures of a program's performance: the fraction of vehicles required to participate in the I/M pro- gram but not showing up for their initial test; and the fraction of vehicles that have failed an I/M test and never return for a retest but that still operate in the area (unresolved failures). Using these performance indicators in program evaluation was discussed in Chapter 6. Other assessments are needed to understand whether vehicles are being registered outside the region, such as
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194 Evaluating Vehicle Emissions I/M Programs observing changes in vehicle registrations and emissions in areas adjoining I/M areas. Instances offraudulent testing, repairing, orissuing of compliance certifi- cations also must be used to evaluate compliance with an I/M program. Tracking the number of overt and covert inspections and the number of en- forcement actions taken against stations can provide evidence of the level of fraud occurring in a program and can target test stations for covert audits. PUBLIC ACCEPTANCE AND POLITICAL FEASIBILITY OF I/M AND PUBLIC AWARENESS OF AIR POLLUTION Vehicle emissions I/M programs are a comparatively burdensome environ- mental mandate for the public. As one of the only mandates that requires individuals to demonstrate compliance, I/M has not proved to be a particularly popular policy with the public or politicians. I/M programs require owners to visit a testing facility periodically where about 7-l 5°/0 oftested vehicles require some sort of repair, necessitating further investment of time and money. Additionally, the owners of vehicles most in need of repairs are sometimes those least able to afford them. This lack of public acceptance presents an ongoing challenge to the design and implementation of an effective I/M pro- gram. Evaluations of human behavioral issues related to I/M programs are impor- tant, not only to determine how behavior might be affected but also to get a sense ofthe political acceptability ofthe program. Tfthe public perceives costs as high relative to the emissions reduced or the effect on air quality, the pro- gram will be difficult to implement or enforce. Furthermore, because costs of I/M tend to fall disproportionately on low-income groups who are least able to pay, the will of regulators to enforce the program and therefore its effective- ness could tee compromised. Given the import of public end political accep- tance on the ultimate effectiveness of an AM program, the committee believes that evaluation should include some criticalbehavior elements. Examples of social research that could help evaluate the public's reaction to I/M-related issues include Bishop et al. (2000b), who described the response of motorists to highway messaging of vehicle emissions, and Bohren (2000), who described human factors research on OBDIT. There are other examples of studies on I/M and human behavior, but these issues have not been thoroughly studied. Clearly, there is a need for expanded research in the area of human behavior,
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Evaluating I/Mfor Costs and Other Criteria 195 regressive impacts, and public acceptance as they relate to I/M program de- sign. Moreover, additional studies are needed to characterize fully the demo- graphics and socioeconomics of high-emitter vehicle ownership. FUTURE TRENDS IN VEHICLE TECHNOLOGY THAT AFFECT I/M PROGRAM EVALUATION Automobile manufacturers have made vast improvements in vehicle tech- nology over the past 30 years. Laws imposed by federal and local govern- ments to reduce emissions were often the motivating factor for many ofthese technological advances. Decreasing Failure Rate One ofthe majorbenefits of new-vehicle technology is the reduction in the number of vehicles that fad] I/M testing. The "New Vehicle Certification," required by EPA, is an example of legislation that has decreased the failure rate. Along with tightening the new-vehicle-emissions certification standard, vehicle manufacturers are also required to extend the time provided for emis- sions component warranties up to 80,000 miles. ~3 This mandate, as well as the availability of more robust technology such as advanced catalytic converters, has helped to reduce significantly the in-use deterioration rate of emissions- control components. Determining the actual benefit of reducing the in-use deterioration rate is extremely difficult. Data collection that addressee this issue includes collecting information on high-mileage new vehicles. Such information includes the fol- lowing: High-mileage new-vehicle certification. ~ In-use vehicle studies using vehicles voluntarily provided by He public . Lithe federal emissions-control warranty is 96 months/80,000 miles for major emissions-control components (such as the catalyst), and 24 months/24,000 miles for other components (such as sensors, positive crankcase ventilation (PCV) valve and exhaust gas recirculation (EGR) valve). Auto manufacturers have tended to offer warranties for 3 years/36,000 miles and 10 years/100,000 miles.
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196 Evaluating Vehicle Emissions I/M Programs - Roadside pullover studies · I/M test lane data As newer vehicles age and change ownership, the actual in-use deteriora- tion rate might be different from that originally predicted. However, current data collected by McCTintock ~ ~ 999c) in Colorado suggest that newer vehicles are cleanerbecause ofthe tighter certification standards and are staying clean- er longer. EPA will reflect this in-use deterioration improvement in the devel- opment oftheir MOBlLE6 model. As discussed in Chapter 5, this lower deteri- oration will reduce the forecasted benefits from I/M programs. OBDI! Evaluation OBD systems were developed to help technicians diagnose and service the computerized engine-management systems of modern vehicles. Early diagnosis followed by timely repair can often prevent more costly repairs to either electronic or mechanical powertrain components. For example, a poorly performing spark plug can cause the engine to misfire, a condition sometimes unnoticed by drivers. This engine misfire can, in turn, quickly degrade the performance of the catalytic converter. With OBD detection of the engine mis hire, drivers would be faced with a relatively inexpensive spark-plug repair. However, without OBD detection, drivers could be faced with an expensive catalytic-converter repair in addition to the spark-plug repair. The major difference between I/M programs incorporating OBDIT com- pared with traditional vehicle testing is that OBD is a technology-based test that makes no measurement of emissions, whereas traditional vehicle testing is emissions based. In addition, the OBD technology is an early warning sys- tem, which is designed to create a warning before emissions increase. These characteristics OBDIT raise some critical issues for evaluation. Before OBDIT, evaluating the emissions-reduction benefits of vehicle testing was based on the principle of A - B = C, where A is the average fleet emissions before vehicle inspection, B is the average fleet emissions after failed vehicles are repaired and subsequently have reduced emissions, and Cis the net benefit ofthe repair and the overall reduced fleet emissions. The principle of OBDIT is to prevent A from including vehicles with emissions much higher then the rest ofthe fleet. That is a new approach to I/M, and therefore new program evaluation princi- ples and methods need to be developed to assess the benefits of OBD technol- ogy.
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Evaluatir~gI/Mfor Costs and Other Criteria 197 SUMMARY Besides evaluating emissions-reduction benefits, evaluating costs, compli- ance, and public acceptability is critical for understanding the full impacts of I/M. Costs and emissions reductions are intricately linked, and both must be considered in evaluating I/M programs. Costs affect the performance of an I/M program because they can affect the behavior of vehicle owners and technicians in response to the program and therefore affect the emissions reductions achieved by the program. Considering costs is also important for determining how an I/M program can be designed or improved or, more broad- ly, for determining whether emissions-reduction efforts are best directed at I/M or alternative ways of reducing emissions. Compliance and enforcement issues are critical for evaluating whether vehicles required to be tested are properly tested and whether those that fail obtain proper repairs or are removed from the fleet. Finally, given the importance of public and political acceptance on the ultimate effectiveness of an I/M program, the committee believes that evaluation should include some critical behavior elements. Some specific findings and recommendations related to these criteria are the following: · Costs are easier to measure than emissions reductions, but there are still uncertainties about costs, especially about the costs of repair, the costs of enforcement, and the value of consumers' time. Increased efforts need to be directed toward obtaining complete, accurate, and reliable repair-cost data from I/M programs. ~ Studies show that repairs done in I/M programs do not cost as much and do not result in emissions reductions as large as those done in laboratory studies of repairs. This finding suggests that repairs done in I/M programs might not be as complete and Tong-lasting as they could be. A desire to pass the test at the minimal possible cost affects the type of repairs motorists obtain. Additional studies linking costs of repair, type of repair (e.g., components), emissions benefits, and the duration ofthose repairs are needed to document whether effective repairs are being done in I/M programs and how those repairs compare with repairs provided under laboratory conditions where cost considerations are less and technician training is likely higher. The study of OBDIl-related repairs should be a particular area of emphasis. ~ The role of waivers in I/M programs should tee assessed. Large sums of money are spent in I/M programs to find failing vehicles, so the impact of "excusing" vehicles from repairs might result in inefficient use of consumer
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198 Evaluating Vehicle Emissions I/M Programs resources and allow continued emissions from high-emithng vehicles. Potential approaches to replace repair cost waivers with other mechanisms aimed at providing relief to low-income motorists should be studied. · Innovations in I/M that potentially could improve cost-effectiveness should be studied and possibly implemented into programs, such as more use of remote sensing, emissions profiling, different cutpoints (more lenient as well as more stringent), and scrappage and repair assistance policies. · Not only do we know little about the cost and emissions impact of current programs, we know even less about alternative enforcement efforts. How much difference do enforcement efforts, such as auditing repair-facility performance or intermittent testing with remote sensors or roadside pullovers, have on emissions reductions from a program? There is no information about the link between high expenditures on enforcement efforts and the additional emissions reduction achieved. · Little research has been done on how I/M affects motorists' behavior, Including decisions about program avoidance andothernoncompliancebehav- ior as well as what types of vehicles to own or hold in the I/M region. Ex- panded research on these issues and other behavioral issues is needed. introducing new-vehicle and testing technologies, including OBD and remote sensing, into I/M programs raises many issues. These include public concerns about the use ofthese new technologies and evaluation issues, such as how emissions benefits of OBD will be estimated.
Representative terms from entire chapter: