Conference Agenda

Transportation is one of the main sources of GHG and pollution emissions worldwide, and recent studies have shown that the majority of automobile pollution comes from vehicles older than 10 years. Notwithstanding, existing policies create incentives against removing older vehicles from the fleet with potential pollution and public health impacts. This paper examines the impacts of an anti-scrappage policy in Brazil using a border-pair approach that leverages state variation in exemption ages for the vehicle ownership tax. Using municipality-level vehicle registration data from 2013-2020, we find that low-age exemption cutoffs can increase fleet age up to 1 year. Using fleetbased estimates and satellite-level data on global and local pollutants, we find that low exemption age policies are associated with up to 23% higher on-road CO2 emissions per capita and 4% higher concentrations of PM2.5. Meanwhile, the rate of low birth weight measured from administrative birth records increases by 9.6% under a 10-year exemption policy and 2.5% in localities with exemption cutoff between 15 and 20 years. Despite the underscored social costs of these policies, we find suggestive evidence that electoral incentives make low-age exemptions politically costly to be overturned.