Vehicle Inspection and Maintenance Programs: International Experience and Best Practices

1. Vehicle Inspection and Maintenance Programs: International Experience and Best Practices Summary of a Report Prepared for theU.S. Agency for International Development Presentation by Karl Hausker Consultant to USAID karl.hausker@comcast.net1-202-412-5972 BAQ Conference Agra, IndiaDecember 7, 2004

2. Outline of Presentation • Background to USAID report • I/M programs in broader context of reducing vehicle pollution • 4 key questions in I/M program design • Summary of “essential” best practices • Contracting Issues • Future directions in I/M Full report is available at: http://cleanairinitiative.org/portal/system/files/articles-59065_paper.pdf or http://pdf.usaid.gov/pdf_docs/PNADB317.pdf

3. Background to report • Commissioned by USAID, methodology involved synthesis of existing literature, survey of expert opinion, and case studies. • Emphasis on experience in both industrialized and developing countries. • Emphasis on policy and economic aspects of I/M, in addition to technical topics. • Division of best practices into 2 tiers: • “Essential” best practices – “EBPs” • “Ordinary” best practices

4. I/M Programs in Context • “First priorities” for vehicle pollution reductions are: • New vehicle standards • Imported, used vehicle standards • Cleaner fuels (no lead, reduced sulfur, control of Reid Vapor Pressure) • I/M is one of several options that countries should consider next. • Other options include: retirement and/or retrofit of older vehicles; programs aimed at fleet vehicles (better maintenance, conversion to alternative fuels), mass transit, and programs aimed at reducing vehicle-miles-traveled.

5. I/M Imperatives • Do not underestimate the difficulty of implementing I/M programs. • I/M requires behavorial change by “the many”, not “the few”. • Regulation creates “gaming” incentives. • Need full commitment of senior policy-makers and years of capacity-building. • A failed I/M program is worse than no I/M program. • Overarching question: when are conditions “ripe” for I/M?

6. 4 Key Questions in I/M Design • What institutional design is best? • What test procedures should be used in applying what standards? • How to promote high levels of compliance? • How to ensure sufficient resources? • Financial resources - for typically a multi-million dollar undertaking • Institutional capacity - especially in the vehicle service sector • Political support – critical for the I/M program to survive

7. EBPs: Institutional Design • Use “test-only” (centralized) design. • Track record of “Test-and-repair” (decentralized) is inferior. • Contract for private operation of I/M facilities with strong govt oversight. • Apply a sophisticated “quality assurance” program. • Use government and/or 2nd contractor. • Someone must “inspect the inspectors”. • Implement I/M in phases – by vehicle type and/or by stringency. • Evaluate/Learn/Adapt/Improve.

8. Test Procedures & Standards • Test procedure observations: • Dilemma of measuring smoke opacity vs. particulate matter (PM) • Human error and gaming in testing • EBPs: Standard setting • Need prudent judgment of technical potential, economics, politics. • Base standards on fleet characterization • Set cut-points so that 15-20% of vehicles fail the test.

9. Promoting Compliance • Compliance vs. enforcement • EBP: Linkage of I/M compliance to periodic vehicle registration is a powerful tool. • The “right to drive” should be conditional on meeting I/M standards. • Periodic vehicle registration has multiple benefits: • Urban planning, tax collection • Accident and crime investigation • Air emission inventories

10. Managing Resources • EBPs: Financial resources • At a minimum, inspection fees should cover ongoing operating costs including strong oversight and quality assurance. • Some capital costs (e.g., land or fixed facilities) are candidates for subsidy if necessary. • Such fees may seem high or unaffordable, but are often no more than the cost of an extra tank of fuel. • Many experts expect fees that achieve full-cost recovery to be in the $10-$20 range.

11. Managing Resources [cont.] • EBP: Institutional capacity • Ensure that all players have capacity to carry out their roles. • Often neglected is the critical task of building capacity in the vehicle maintenance sector – the only player than can deliver the “M” in I/M.

12. Contracting Issues • To enhance quality: engage international firms. • Use single (not multiple) contractors. • Set a minimum contract length of 7 years. • Allow adjustment of inspection fees for inflation. • Promote competition when contract is up for re-bid. • Government can own/control land & facilities. • Government can own/control centralized software. • Recognize the substantial risk management issue and the need for revenue adjustment provisions. • Donors should assist development of a model RFP and contract implementation advice.

13. Future Directions in I/M • PM meter suitable for I/M is likely in 1-2 years. • Will change “best practices” in testing and standards for diesels and 2-strokes. • Two trends in U.S. worth monitoring: • On-board diagnostics (OBD) are improving and reducing the need for manual test of exhaust. • Benefits of I/M are decreasing due to improvements in performance and longevity of emission control equipment.

14. Appendix • The main body of this presentation contains all of the “essential best practices” in the report – those deemed truly essential to program success. • This Appendix contains the additional “ordinary best practices” in I/M programs as presented in the report, along with two ideas on institutional design worthy of consideration. All of these best practices enhance program effectiveness and thus are recommended as well.

15. Institutional Design • Establish a national I/M policy framework. • The I/M framework should be part of a larger policy framework that addresses vehicle emissions in an integrated manner. I/M program elements should account for new vehicle emission standards, equipment warranties, and fuel standards, all of which are typically set at the national level. Coordination improves I/M effectiveness. • State and local governments should tailor some program details within this framework to address specific conditions within regions, states, or cities. • “Horizontal coordination” is also important. • Promote coordination among the environmental agency (focused on emissions) and the transport agency (typically responsible for vehicle registration and safety inspections) and the police (enforcement). • Integrate an I/M program with safety inspections • Safety problems pose risks of a similar magnitude as air pollution and deserve to be addressed with the same rigor. Government can achieve “economies of scope” in addressing both problems in an integrated way. The efficiencies will be manifest in shared costs for the two programs (e.g., land, facilities, staff) and in allowing drivers to get tested for both in a single trip.

16. Institutional Design [cont.] • Two additional ideas worth considering: • Linkage of I/M and vehicle registration is and essential best practice. Other potential linkages may be useful includin roadworthiness (safety) testing and vehicle insurance. • British Columbia example of insurance linkage. • “One-stop shop” concept allowing a vehicle owner to take care of all of these in one place. • Test-only centers – a roadside version. • In several U.S. states, diesel truck I/M standards are enforced solely through roadside testing. • Can this model be tried elsewhere? • Would require vigilant, honest roadside test teams, probably involving police, environment agency, private contractors, perhaps NGOs.

17. Test Procedures and Standards • Recommended emission test procedures • No-load testing for 2&3 wheelers. • Consider adding a “high idle” and/or opacity test to a simple idle test for 2&3 wheelers. Loaded test procedures are under development and should be considered when available. • No-load testing for cars that are not equipped with catalytic converters, and loaded testing for cars with this emission control technology. • Using dynamometers, even test facility staff with low technical skill are capable of conducting short steady-state/single-load tests, achieving acceptable accuracy in measurement and holding costs down. Transient loaded tests (those that run the vehicle through simulated driving cycles and loads) are longer and more accurate, but are costlier and require relatively skilled staff. These tests might be deferred in developing countries until conditions warrant. • Snap-idle testing using the Society for Automotive Engineering (SAE) J1667 method for commercial diesel vehicles. • Some policymakers have opted for more costly loaded testing, seeking greater accuracy and reduction of fraud, however, it is unclear whether the added costs are justified.

18. Frequency of Tests • Policymakers should set the required frequency of inspections by balancing technical, economic, and political factors. • Six months to two years is a reasonable range (with an option for a somewhat longer initial period for new cars in which emissions performance is not expected to deteriorate much in the early years). • Policymakers should examine how fast vehicle emission performance deteriorates, and how this varies with age or vehicle type. • Economic factors include number of test centers and lanes needed which is a function, in part, of frequency. • Political factors include what frequency drivers are willing to tolerate without undermining support for the program.

19. Promoting Compliance • Apply common sense in design and location of I/M stickers that indicate compliance. • Stickers must be resistant to forgery and to degradation in sunlight. I/M stickers should be large enough so police can determine the expiration date at a short distance. Where I/M is required for vehicle registration, a sticker indicating registration makes a separate I/M sticker unnecessary. • Roadside emission testing is a useful enforcement tool to complement others. • The primary function of roadside testing should be the identification of gross polluting vehicles. Policymakers should consider the option of using private contractors to conduct such testing with police accompaniment. • Devote appropriate resources to public awareness campaigns to promote compliance. • Awareness campaigns are often overlooked and under funded. Awareness campaigns should educate the public on I/M requirements, including linkage to vehicle registration (if applicable). Campaigns can also tout the public benefits of I/M (in terms of reducing air pollution and better health) and the private benefit. A well-tuned vehicle typically burns less fuel and saves money. Proper adjustment of an engine can improve fuel efficiency by 5 to 15 percent.

20. Managing Resources • Ensure the ongoing education of citizens on the benefits of I/M programs to build and maintain political support. • Environmental and public health officials and nongovernmental organizations (NGOs) should be enlisted in this effort.