3E Intelligence

I am absolutely not impressed by the CO2 policy for cars proposal presented by the European Commission and I do not think it shows European climate change leadership at all.

First, for all the heavy lobbying and media attention surrounding this issue, today’s Commission proposal to oblige car manufacturers to reduce the greenhouse gas emissions of new cars from 2012 will do little to limit the climate impact of road transport. It is indeed the driving of the car (the kilometers driven) which are responsible for the emissions, not the car in itself (except for the emissions produced in the manufacturing process - who has any figures on this, BTW?). Even if all producers would meet the 130gr/km requirements by 2012, more cars on the road and more mobility needs will mean that by 2020 the growth of emissions from road transport are likely to increase. As long as politicians shy away from tackling the volumes of transport, they will just raise expectations on which they cannot deliver. Technological innovations are badly needed and lots more money needs to be invested in the research and development of these innovations but where are the lifestyle changing policies that we need? It seems easier to find industry scapegoats (cars, aviation) than to take courageous actions that would hurt voters I suspect.

Second, the legislative proposal will still face a hard struggle within the Council where countries like Germany will continue pushing for less pressure on their national car champions. The “national interest reflex” of our governments (not only in this dossier) is one of the reasons I am pessimistic about EU energy policy.

Third, the proposal itself is a monster of complexity which reflects the number of technocratic compromises that had to be made to achieve a result. As such it might have a lot of perverse long-term effects which have not been foreseen in the impact assessment, just like this other technical complexity monster which is called the European Emissions Trading Scheme.

Fourth, because of this complexity and the flexibility clauses foreseen (the “curve”, the “pooling”) I guess the industry will not have a very difficult time to find ways around the “hard” measures and prevent fines (which BTW only become serious from the third year - so from 2015).

In the meantime, let’s keep driving

Further reading:

• Commission: Questions and answers on the proposed regulation to reduce CO2 emissions from cars

If all goes well, the EU Commission will present its plans to force car manufacturers to produce climate-friendlier vehicles on Wednesday 19 December. However, it is internal quite divided though as to the details of the proposed policies, pressured by governments who are defending their own national car sectors. If Brussels-bashers ever needed any proof that the EU will never be an economic superpower, they should look no further than this debate.

The Commission wants car makers to reduce greenhouse gas emissions of new cars to 130 grams/km by 2012 and seeks an extra 10 grams/km reduction by additional measures such as the promotion of eco-driving, more efficient air conditioning or the use of biofuels. But the German car producers (which have the highest emission rates) have mobilised their government and Commission Vice-President Verheugen to water down the proposals which were first suggested in February 2007.

The policy to be proposed tomorrow will include several flexibility mechanisms to lower the burden for the European car industry but at the same time it foresees fines for manufacturers which will not meet the requirements in 2012. For more details on the proposal, see EUObserver and Reuters.

I don’t buy the argument of the car sector that it cannot do more in terms of technology improvements and that it did not have enough time. That being said, I think the industry has always had a good argument in their pinpointing to consumer choice. If policy makers DO believe in the market, they should do more to influence these choices. If consumers want bigger cars and SUVs, the industry will produce them. Therefore, I think, in the end, the Commission’s proposal lacks a fundamental dimension by not trying to change consumer behaviour directly. Where are the fines for those consumers who continue to run their big gas-guzzlers through our cities and towns? 

A US federal court has rejected the car fuel (CAFE) standards set in 2006 by the Bush administration for failing to assess the environmental costs of greenhouse gas emissions resulting from the use of the new standards. The Court criticised in particular the SUV loophole and the failure to include heavier vehicles. No less than eleven US states, two cities and four environmental groups had brought the standards before the court.

I guess some of our European car manufacturers can feel themselves lucky that we Europeans do not have a strong judicial system to take our political classes to account when they make a mess of their policies

Further reading:

• CNN: Court rules fuel standards not tough enough
• NY Times: Court rejects fuel standards on trucks
• The Court’s decision

UK’s Foreign Secretary David Miliband [blog] will be calling today for zero-carbon cars by 2030 during a speech in Bruges, according to the Guardian. This is an ambitious target which is not likely to get much applause in car industry circles as the sector is fighting hard to prevent future EU laws that would force them to reduce CO2 emissions of new cars to 120g/km by 2012.

Especially German car makers seem to be determined to counter the “green cars” trend, as reported in a new study presented by EU green lobbying group Transport and Environment (T&E). The report shows that the average new car in Germany produced more carbon dioxide in 2006 than in 2005. To their defence, car makers say that consumers are asking them to build heavier and safer cars and that this has implications for their cars’ carbon footprint.

Further reading:

• BBC’s Mark Mardell’s euroblog: Green car compromise
• EurActiv: Cars and CO2 LinksDossier

• Are hybrid cars fueled by electricity the future? Yes, according to a new study published in the US by the Electric Power Research Institute and the Natural Resources Defense Council which examined the greenhouse gas emissions and air quality impacts of plug-in hybrid electric vehicles (PHEV). Read also the good Technology Primer on plug-in hyrbid electric vehicles. Google recently committed itself to stimulate research and development of these cars with a budget of 10 million dollars.
• The Guardian has an interesting story on efforts to make the popular Formula 1 racing less energy-intensive and more climate-change-friendly.

• Are the BRIC countries overtaking the US in terms of controlling energy companies? Yes according to an upcoming report to be pubished next week by Goldman Sachs. Read the AP article but look also at some good counterpoints made on the No 1203 blog.
• The Guardian has a good article warning that EU countries are turning to different fuels to deal with the climate emissions of cars. “Ethanol, methane or LPG? Too many fuels will put the brakes on EU emission cuts”, writes the paper.

The US Senate approved on 22 June new energy legislation that will increase fuel-efficiency standards for new cars. The new standards require cars, light trucks and SUVs to reach 35 mpg (miles per gallon) or about 6.7 l/100km by 2020. Currently the average fuel economy of cars in the US is 25 mpg.

A proposal to raise the standard an additional 4 percent every year until 2030 was rejected.

With its 35 mpg by 2020, the US would still be far behind standards in other economic blocs. Standards stand at 40 miles per gallon in Europe, 46 miles per gallon in Japan and 37 miles per gallon in China from 2008.

The legislation will still have to pass at the House and President Bush can also veto it when it gets adopted.

More on this news:

• The Guardian: Oil Companies Spared Tax Hikes
• International Herald Tribune: U.S. Senate votes to raise mileage standards to 35 mpg for cars, SUVs
• WattHead blog: Senate Passes Energy Bill But End Product is Far From Comprehensive
• Le blog Auto: Le Sénat Américain adopte de nouveaux standards de CAFE

For a critical comment on the Senate’s decision, read Thomas L. Friedman’s “The Capitol Energy Crisis” (NY Times via the Greenpagan blog).

• Carbon dioxide emissions will rise 59% by 2030 as economic growth will drive demand for energy. This is the bad news published today by the US Energy Information Administration in its International Energy Outlook 2007. Looking at these figures, who still believes the EU will be able to convince other regions that a global reduction of 30% by 2030 is needed? Read the EurActiv story on this report.
• The race for the world’s greenest city now seems truly on as New York mayor Mike Bloomberg announces that the city’s famous yellow cabs will be converted to gas-electric hybrids by 2012. More on CNN and HybridCarBlog.com
• The European Parliament’s newly established special committee on climate change held its first constituent meeting on 22 May. Italian Socialist Guido Sacconi was elected as chairman. Who will measure the carbon footprint of this committee with all its future flying and conferencing?

US President Bush wants his federal agencies to come up with concrete plans to cut gasoline consumption from cars in a direct response to an April Supreme Court Ruling stating that the Environmental Protection Agency could regulate carbon dioxide emissions under the Clean Air Act. But environmentalists and Democrats see no “green Bush” yet.
Read the New York Times article on Mr Bush’s statement and the comments in BlueClimate and Treehugger (includes the YouTube clip with the President’s declaration).
The White House web site has the full declaration.

• New York has taken up London’s challenge to become one of the world’s greenest cities by 2030. On 22 April, mayor Michael Bloomberg is to announce a plan for “sustainable” growth, calling for reductions of 30 percent in greenhouse gas emissions by 2030 (see Earth Times). A preparatory study showed that the Big Apple emits 1% of all climate gases in the US, although per capita New Yorkers are more energy-efficient than other Americans. In February, London mayor Ken Livingstone presented his Climate Change Action Plan which aims at reducing emissions by 60% in the next 20 years. When will we see Brussel’s green ambitions?
• Renewables are the only realistic pathway to a hydrogen transport future, according to a new report presented by the European Hydrogen Association EHA on 11 April. The study looks at the future of oil, gas and nuclear and concludes that peak oil will leave a gap that cannot be filled by other fossil fuels or nuclear. But it also admits that for some time even renewables will make too small a contribution to close this gap.