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OCR for page 169
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
OCR for page 170
~ 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-
OCR for page 172
~ 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.
OCR for page 173
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-
OCR for page 174
~ 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.
OCR for page 175
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
OCR for page 176
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 $500 limit for many vehicles.
OCR for page 177
Evaluating I/Mfor Costs and Other Criteria
Im .
0 80 -
Or 60 -
A,, 40 ~
DO
._
~ 20
it:
.,-.
/ :
0 20 40 60 80 100
% of Repaired Fleet
177
FIGURE 7-1 Cumulative frequency distribution of net emissions reductions for vehi-
cles repaired in the California I/M pilot study (1/7(CO) + Nox + HC).
All these repair studies are not likely to represent repairs as they would be
done in an operating I/M program. The training and experience level of the
repair technicians is likely higher than it is for many small private repair facili-
ties. Some repairs undertaken in these studies were more extensive than those
that would be approved by a vehicle owner interested only in passing the I/M
test. Even under these conditions, however, some vehicles could not be
brought into compliance with the emissions standards. It should also be noted
that the way in which vehicles were recruited, the cost limits placed on repairs,
and the degree to which the vehicle owner participated in repair decisions
varied across these studies.
In addition, diagnosis, repair, and the costs of repair can be different for
vehicles equipped with new emissions control technologies and on-board diag-
nostic IT (OBDIT). Features of OBDIT systems might make diagnosis and
repair of vehicles easier, but the costs of repairing some vehicles whose emis-
sions are close to the tight OBD standard could be high. Some of these re-
pairs, such as those to sensors, will only affect the monitoring capability ofthe
system and will not directly reduce emissions.
In-Program Studies of Repair Costs
Recently, data have been collected from ongoing I/M programs on the
actual costs of repair for each round of I/M testing. Arizona and California
OCR for page 178
78 Evaluating Vehicle Emissions I/M Programs
50~
~ 30-
0 20-
O 10-
~0 0-
O -10
._
~ , .
v,
3 -20-
.
.
.: . .
- 1
l
.
0 500
1~000 1~500 2~0~00
Repair Cost ($)
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.
OCR for page 179
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
.
OCR for page 188
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
OCR for page 189
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~.
OCR for page 190
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.
OCR for page 191
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:
repair costs
