While California struggles to close a $15.4 billion budget gap, there is an easy $68 million that is being wasted.

To encourage purchases of next-generation hybrid vehicles, California plans to practically give away up to 40,000 green Clean Air Access stickers that will allow plug-in hybrid vehicles access to HOV lanes even when the car contains only one person. Another program provides similar white stickers to electric, natural gas and hydrogen-powered vehicles. Giving away stickers is a mistake. According to our research, California could sell the same 40,000 Clean Air Access stickers to drivers of any vehicle for at least $1,700 each and raise $68 million.

We say that California could raise $68 million because a previous program could have raised up to $270 million. From 2005 to 2007, California issued 85,000 yellow stickers to earlier models of hybrid vehicles. These stickers will expire in July. By comparing used hybrid cars with and without stickers, we found that drivers once valued the stickers at about $3,200 per vehicle, or $270 million in total. However, the pollution and technology adoption benefits achieved were much lower than $270 million.

Our research shows that providing HOV access is less effective at encouraging purchase of hybrid cars than a direct subsidy equal to the market value of the sticker. If California sold the stickers to any vehicle and used those funds to directly subsidize hybrids, we could achieve more hybrids on the road and cleaner air.

California Senate Bill 535 creates a new set of three-year stickers for enhanced hybrid vehicles such as the 2013 Chevrolet Volt or the Toyota Plug-In Prius. Based on the prior program, many California drivers would pay at least $1,700 to drive in HOV lanes for three years. Thus, the 40,000 stickers could be sold for $1,700 each, or $68 million.

Instead of a largely ineffective policy that tied together two separate aims – improving use of HOV lanes and encouraging hybrid cars – California should sell access to HOV lanes to those who value them most. This could be through a sticker program where motorists pay the actual value of the sticker, or through High Occupancy/Toll lanes. California could then use the revenues to separately subsidize hybrid vehicles, invest in other types of pollution-reducing activities, and/or reduce the deficit. Not only would these programs raise revenue, they would also ensure that any motorist who has a high value of avoiding traffic, whether doctor, plumber or patient, has an alternative to sitting in traffic.

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Sharon Shewmake and Lovell Jarvis are researchers in environmental economics at Vanderbilt University and the University of California, Davis, respectively.