Clean cars: Europe and America can learn from each other

By Roland Hwang

Both European and American NGOs are working hard to encourage the auto industries to produce cleaner and low-carbon cars, but the scope for coordination hasn’t been fully exploited. The aims may be the same, but the approaches haven’t, despite the obvious fact that the more the two continents adopt similar approaches, the more car makers can take advantage of the vast economies of scale by developing the same technologies for both markets.

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Neither the US nor the European systems are ideal. The primary advantage of the US system – both the fuel economy programme (Cafe) and the California CO2 pollution standards – lies in its transparency. All the data that the automakers must submit to regulators for compliance purposes are in the public domain, and makers must pay penalties if they fail to meet the standards. By contrast, the agreement in force in Europe (and Japan/Korea) is voluntary, and it’s very hard for the public to understand both compliance and incentives to comply. If the car makers don’t meet their 140 g/km target, they might face binding limits next time round, but that isn’t certain.

A big problem with the US Cafe system is its division of the fleet into “working vehicles” (originally just pickups and delivery vans) and passenger cars. It is widely recognised that this system caused half the vehicles sold in the USA today to be classified as “light trucks”, as these conform to a lower Cafe standard. No wonder combined fuel economy for the US light duty vehicle fleet peaked in 1989. The European voluntary CO2 agreement does not distinguish between cars, SUVs, pickups, and vans (even though there is still a loophole in the Euro-4 standards that could soon be closed).

Overall, the Europeans are far ahead of the US in a comprehensive CO2 control system. Europe also uses fuel or vehicle taxes to discourage driving or encourage better vehicle choices, unlike America where fiscal instruments still are very unpopular.

Finally, there is a wide divergence between the continents on diesels. Stricter pollution laws and less attention to fuel economy have made diesel cars virtually non-existent in the US. New European pollution standards and public attention are now forcing diesels to become cleaner. The lesson here is that air pollution and CO2 policies should go hand in hand, so that there are no trade-offs.

There is a feeling in America that the climate is now right for major progress on clean car issues. Though our fuel prices are still well below Europe’s, they are at record levels by US standards. And with growing awareness that global warming will lead to more hurricanes like Katrina and Rita, Republicans, Democrats, and even automakers are calling for real action to reduce our oil dependency. It’s vital we look to Europe, and Europe looks to us.

• Roland Hwang is director of vehicles policy at the US National Resources Defense Council.

This news story is taken from the October 2005 edition of T&E Bulletin.