The model that I created for my master’s thesis was recently published online so you can actually play around with it (using iseesystems NetSim software). Check it out at their blog:
and then check out the model: http://forio.com/service/netsims/netsim/clunkers/index.html.
By combining a two-way price signal – getting people to buy ‘clean cars’ instead of ‘dirty cars’ while convincing them to get rid of their polluting cars – we may see pollution decrease dramatically. However, its a difficult money situation to manage – as the feds are figuring out for themselves!