Evaluation of the National Vehicle Scrappage Program
- 1. Executive Summary
- 2. 1.0 Introduction
- 3. 2.0 Background
- 4. 3.0 Evaluation Design
- 5. 4.0 Findings
- 6. 5.0 Conclusions
- 7. 6.0 Lessons Learned
- 8. Annex 1 Bibliography
- 9. Annex 2 Network of Regional NFP Delivery Organizations
- 10. Annex 3 Evaluation Issues and Questions
- 11. Annex 4 Summary of Findings
- 12. Annex 5 Comparison with Other Jurisdictions
July 12, 2011
In order to meet the information requirements of senior management at Environment Canada (EC) and fulfill a Treasury Board commitment, an evaluation of the National Vehicle Scrappage Program (NVSP) was conducted. This evaluation was part of EC’s Risk-Based Evaluation Plan for 2010-2011 to 2014-2015. The evaluation was overseen by EC’s Evaluation Division, Audit and Evaluation Branch, in 2010-2011. The Department commissioned Goss Gilroy Inc. in association with David Redmond and Associates to carry out the data collection and analysis.
The NVSP (known as Retire Your Ride / Adieu bazou) is one of a range of complementary clean transportation initiatives undertaken in partnership with other federal departments as part of the Clean Air Agenda. The program encouraged owners of old cars (model-year 1995 and older) to retire their vehicle in exchange for an incentive. The NVSP’s primary goal was to reduce air pollutants by removing these older vehicles from the road; its secondary goals were to reduce greenhouse gases (GHGs) by promoting sustainable transportation alternatives and to prevent the release of toxic substances through responsible vehicle recycling. EC also worked with the Automotive Recyclers of Canada to develop the national code of practice for vehicle recycling in order to ensure high environmental standards and consistent practices for vehicles retired under the program.
EC set up a separate contribution authority with a not-for-profit organization (NFP) to deliver the NVSP beginning in 2007. Funding of up to $92 million was provided to the program over five years (2007-2008 to 2011-2012) from funds set aside in Budget 2005 and Budget 2007. The program ended on March 31, 2011, and, as intended, was not renewed.
The evaluation’s objective was to assess the relevance and performance of the NVSP. The evaluation focused primarily on the four-year time frame from 2007-2008 to 2010-2011, but also encompassed an examination of 2011-2012 program data on the total number of vehicles retired and final planned program expenditures. The evaluation relied on multiple sources of evidence, including a literature and document review, secondary data analysis, 20 key informant (KI) interviews, and three case studies that focused on specific aspects of the program: communications, the use of incentives, and the vehicle recycling code of practice.
Findings and Conclusions
Based on the evidence gathered for this evaluation, there was an identified need for the NVSP. Model-year 1995 and older vehicles produce significantly more smog than newer models, and there is scientific evidence that smog is highly toxic for the environment and human health. When the NVSP began in 2007, there remained 4.6 million model-year 1995 and older models on the road. There was also a need to improve the environmental practices of the vehicle recycling industry in Canada. Although larger vehicle recyclers have generally had good environmental practices, many small and medium companies have struggled in this regard because of insufficient knowledge or misconceptions about the costs associated with good environmental practices.
Although there were regional vehicle scrappage initiatives with similar objectives when the NVSP was implemented, none were of similar scope. EC strived to build on these initiatives in order to reduce duplication. The program was consistent with federal priorities and EC’s mandate and priorities related to air quality and climate change. The NVSP was aligned with EC’s strategic outcome, “Threats to Canadians and their environment from pollution are minimized.”
Performance: Design and Delivery
The NVSP objectives were well defined and targets were clear, though the original target for the total number of retired vehicles became unattainable because the full national program was only launched in January 2009, 21 months after first being announced in Budget 2007. This pre-launch period was needed for program design and obtaining the necessary financial approvals. However, annual targets were met or exceeded once full implementation was achieved. The objectives for the vehicle recycling code of practice were realistic, well defined, and successfully achieved.
The program was delivered through a national NFP (Summerhill Impact [SI]) using a contribution agreement with EC. The NFP then worked with a network of regional NFPs--a delivery system that proved to be effective and efficient overall. The advantages included faster implementation, flexibility when making adjustments, and reduced duplication. Program funding for cash incentives and program operations was adequate. Program participants were satisfied with the program, and the level of satisfaction increased as the program matured.
Program results were monitored using an online data system (SPARC), quarterly and annual reports from SI to EC, a mid-program review, surveys of participants and the general public, and various program management tools such as spreadsheets to monitor vehicle recycler audits. The program monitoring and performance data were used extensively by program managers to direct and fine-tune the program.
Communications activities were successful at reaching key stakeholders and the general public. Outreach and promotional materials for Retire Your Ride (RYR) were linked to two other federal government initiatives: ecoENERGY for Personal Vehicles (which includes, for example, driving tips and information on buying a fuel-efficient vehicle), and Q&As on admissibility of the RYR transit incentive for the federal transit pass tax credit.
Many lessons were learned, including: the strengths of an approach in which an NFP delivers the program through a contribution agreement; the need for hands-on involvement by EC in managing a large, complex contribution agreement; the need to allow adequate time to reach full implementation of a complex program involving many partners; and the importance of clearly defined roles, responsibilities and lines of communication.
The NVSP achieved its intended short-term outcomes. The program was made available across all regions, except in the territories due to a lack of recycling infrastructure and low demand. The level of public awareness increased steadily as the program matured. Many program users recognized that their older vehicle was less environmentally friendly than new models, but many users also overestimated the role of car maintenance as a determinant of the level of pollution produced by older automobiles.
Regarding the medium-term outcomes, as of March 31, 2011 a total of 138 600 vehicles were retired as a result of the program. However, these results cannot be entirely attributed to the NVSP, because some participants indicated in a survey that they would have retired their vehicle in the absence of the program. The fact that the NVSP was not fully implemented nationally until 21 months after program announcement explains why it did not reach its initial overall target of 200 000 vehicles (i.e., 50 000 for each of four years). Also, some regions had difficulties reaching their targets due to the lack of recycling infrastructure and other logistical issues.
Most of the participants (93%) preferred the cash incentive of $300 over a non-cash incentive (e.g., transit passes, discounts on bicycles). More than 75% of participants replaced or indicated they would replace their vehicles with another one. The manufacturer rebates had a direct impact on the type of vehicle purchased, as most program users who obtained rebates opted for larger vehicles than the ones they retired.
Regarding the long-term outcomes, EC data indicate that the program contributed to reduced emissions of nitrogen oxide (NOx), volatile organic compounds (VOCs) and greenhouse gases (GHGs). Total reductions are estimated to be approximately 5000 tonnes of VOCs and NOx, and approximately 37 500 tonnes of GHGs.
The vehicle recycling code of practice is considered an important and valuable legacy of the program. The code, published in print and electronic formats, was widely and readily available to auto recyclers across the country. Environmentally safe practices for the recycling of vehicles during the program were ensured by requiring all participating recyclers to adhere to the code. A survey indicates that 99% of participating recyclers plan to continue applying the code of practice after the program ends.
Many factors had an impact on the program’s success, including the influence of a similar U.S. program (Cash for Clunkers) and the auto manufacturer rebates, both of which contributed to increased profile and use of the NVSP. At the same time, the program had limited ability to influence the transportation choices of program users after the incentive was provided--an outcome that was not expected. In terms of unintended or indirect impacts (i.e., results that were not formally expected of the program), the NVSP helped build NFP capacity, and led to economic and social benefits by removing older, less safe vehicles and replacing them with new, safer vehicles.
Performance: Efficiency and Economy
Evidence indicates that program resources were well spent. EC and SI monitored performance and introduced corrective measures to ensure program efficiency. A cost analysis indicates that, compared to other similar programs, the NVSP can be considered cost-efficient. In addition, significant resources were leveraged by the program. The total value of incentive rewards delivered to program participants was $126 million, of which $42 million was federal funding, and thus the program achieved its target of $3 in incentive value for every $1 in federal funding toward incentives.
Few alternative program models were identified by KIs. A review of foreign programs indicates that an alternative approach would have been to offer more significant incentives, with conditions on the types of substitute vehicles purchased.
As the NVSP has ended, the focus of this evaluation was on lessons learned, not recommendations for improvement. The following lessons learned from the NVSP may help inform the design of future similar initiatives:
- Incentives can help encourage the removal of technologies (i.e., vehicles in this case) that are harmful to the environment. In particular, a moderate cash incentive (such as $300 to retire an older vehicle) can be effective. It was originally assumed that $300 cash would not be as popular a reward as other incentives of higher value (transit passes, discounts on bikes, memberships in car-sharing programs, etc.). This assumption was proven to be inaccurate, as more than 90% of program participants chose the cash incentive.
- The use of a third-party delivery partner (through a contribution agreement with an NFP) can make a program efficient, effective and timely. According to evaluation findings, the use of a third-party deliverer allowed EC to implement a cost-efficient and effective program by capitalizing on the agility of a national NFP.
- When using large, complex contribution agreements, care must be taken to establish a tailored contribution agreement, with precise clauses on roles and responsibilities. The NVSP was delivered through a national NFP that managed a significant amount of program dollars. An agreement of this size and complexity should be tailored to the type of program and clarify the roles and responsibilities of each partner.
- It is important to thoroughly assess all aspects of a program up front, and to manage the risks that they represent. The evaluation evidence indicates that the NFP which received the contribution did not have the full capacity up front to manage such a large contribution. For example, EC did not sufficiently investigate the financial management capacity of the NFP before the program’s launch, and consequently the financial reporting and monitoring had to be strengthened throughout the program. In a situation such as this (a large contribution to a single organization), a risk assessment should be conducted. The assessment should then be used to identify and address weaknesses and gaps on the part of the recipient, and/or to design a tailored monitoring strategy.
- Effective performance monitoring can help improve programs and the quality of evidence for evaluations. The NVSP’s performance monitoring system, featuring an online reporting database, allowed program management to assess the program’s results on a daily basis. The monitoring system allowed EC to monitor progress and make adjustments to the delivery of the program in a timely manner. It also allowed the evaluation team to assess the program’s success with reliable and representative quantitative measures. The availability of this performance data therefore strengthened the evidence for the evaluation.
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