Life cycle optimization of ownership costs and emissions reduction in US vehicle retirement decisions

Vehicle scrappage programs have emerged in the US to address the challenge of regional fleets that contain older, often inefficient vehicles with higher emissions and lower fuel economy. These programs provide an incentive for removal of old vehicles from the road before their economic lifetimes have been exhausted. Scrappage programs operate on the assumption that newer vehicles will offer more efficient, less polluting alternatives to older vehicles. Little attention, however, has been given to the additional energy and emissions burdens associated with the manufacture of the replacement vehicles. This paper considers the optimal intervals for vehicle replacement over a 36-year period that minimize life cycle economic and emissions burdens. Comparisons are made between the optimal product replacement intervals based on explicit private costs, estimated pollution damage costs, carbon dioxide emissions, energy use, and criteria air pollutant emissions. The results show that private costs of vehicle ownership favor long replacement intervals (in the range of 17-19 years), while short replacement intervals support minimization of criteria air pollutants such as CO (3-6 year intervals), NOx (5-7 year intervals), and NMHC (6-9 year intervals). Longer ownership periods (18 year intervals), however, provide minimum life cycle CO2 emissions and energy use. When damage cost factors are used to estimate the external costs of pollution to society, intermediate replacement intervals (10-14 year) are favored.