If railways replaced horses and cars replaced trains, what will be the next evolutionary step after the car? Like its counterparts in north America and Asia, the European Union auto industry believes the answer is the car. Some manufacturers in Detroit still hope – against the odds – that their beloved, highly profitable sport utility vehicles will long roam the freeways as the vast, lumbering buffalo herds once did the Great Plains. But the evidence suggests that they, too, are doomed.
Technical fixes – of the sort currently being promoted – will not save the day. True, bringing hybrid technology to SUVs (as Ford did with its Escape) or fuel-cells (as General Motors and others plans to do, eventually) may improve things at the margins, for a while, but we seem to be on the verge of an intensifying series of wars over the future of mobility.
Some wars will continue to rage – over oil and other energy supplies as the global scramble for resources intensifies. But others will rage between economies, industries, value chains and corporations. Early skirmishing looks set to develop into set-piece battles as the race to develop fixes for our energy security and climate change challenges moves into top gear.
Europe’s car industry, for example, has just forced a climbdown by the European commission over proposed new emissions standards. With her colours snapping from her lance, German chancellor Angela Merkel rode out between the lines and declared that Brussels should not impose standards that would dent car-makers like BMW and DaimlerChrysler. Understandable, perhaps, but a decade from now these companies could turn out to have been industrial dinosaurs.
Meanwhile, confronted by the united legions of the car industry, EU environment commissioner Stavros Dimas appears to have done something of a U-turn, scaling back plans to slash car emissions linked to climate change. The original idea was that the car industry should adopt new technology that would meet a CO2 emission target of 120 grams per kilometre by 2012. Instead, Dimas is now hoping to compromise on a softer target of 130grams per kilometre. True, this would be lower than the 138 grams per kilometre target adopted by Japan for 2015, but none of this is likely to bypass accusations that the car industry has won a short-term battle at the expense of exposing Europe – and the world – to significantly greater risks from climate change.
A new coalition
All of which makes sense if you are BMW CEO Helmut Panke or DaimlerChrysler CEO Dieter Zetsche. But it is deeply worrying if you are familiar with the conclusions of the Stern Review on the Economics of Climate Change, or of the latest report of the Intergovernmental Panel on Climate Change, the first part of which was published on February 2, 2007.
One of Stern’s key conclusions is that the cost of inaction is likely to be dramatically greater than those associated with timely, effective action. If the costs of greenhouse-gas emissions are properly internalised, the market opportunities will likely run to hundreds of billions of dollars annually. No surprise, then, that some leading companies are beginning to break ranks – and even switch sides – as the evidence of climate stress builds.
An extraordinary new coalition of leading companies and NGOs, the Climate Action Partnership, has emerged in the United States. In a statement timed to break just ahead of President Bush’s 2007 state-of-the-union address and the IPCC report, it called for US regulation to limit greenhouse-gas emissions to deliver concentrations of carbon dioxide equivalent (the carbon dioxide equivalent of all greenhouse gases in the atmosphere) which will stabilise at 450-550 parts per million (ppm) of carbon dioxide equivalent. The current concentration of 430 ppm makes their sense of urgency understandable.
As the fight gets nastier, it was no surprise to see the US administration leaking the IPCC report – presumably to give climate sceptics time to get their defences in order. Indeed, with the Bush regime’s days numbered, climate specialists are increasingly outspoken about the ways in which it has suppressed, doctored or distorted research on climate change and its implications. But, however nasty the political end-game may become, end-game it is.
The IPCC’s predicted conclusion is that the scientific case for urgent action is hardening, suggesting that the auto and fuel industries will face a growing barrage of criticism and, more importantly, increasingly powerful regulatory and market drivers for fundamental change. The answer to at least some of tomorrow’s mobility needs could still be a car – but it may well be Chinese rather than European, a diesel-hybrid rather than petrol-powered, and owned by someone other than the driver.
There are also those who believe that one answer will be to develop new generations of electric car, like the TH!NK or the 0-60-mph-in-about-4-seconds Tesla Roadster; but for the moment the big push is towards biofuels.
It is no accident that President Bush visited DuPont the day after his state-of-the-union address, given that the chemical giant is partnering with BP to develop new generations of biofuel. And the European Union is now vigorously pushing new legislation to force oil companies to blend expensive biofuel into petrol supplies.
Unfortunately, a shift to growing fuels is not going to be any sort of magic wand. For one thing, biofuel production will compete for food crops. While the US department of agriculture has predicted that bioethanol distilleries will require 60 million tons of corn from the 2008 harvest, the Earth Policy Institute (EPI) estimates that distilleries will need 139 million tons – more than twice as much.
If the EPI estimate is at all close to the mark, the institute itself concludes: “the emerging competition between cars and people for grain will likely drive world grain prices to levels never seen before. The key questions are: How high will grain prices rise? When will the crunch come? And what will be the worldwide effect of rising food prices?”
Europeans probably won’t much like horizon-to-horizon crops of genetically modified fuel plants, while anyone who grows these crops will face an array of challenges linked to fertilisers, pesticides and water.
The false and the true
So here is our list of several fixes that are likely to be “true” fixes – and of some of those likely to be false fixes:
False (quick) fixes:
– Market fixes: be very careful of assuming that we can turn all climate issues into economic opportunity without triggering behavioural and lifestyle changes.
– Biofuels: yes, they have their place in any sensible fuels portfolio, but they will also trigger an array of economic, social and environmental concerns.
– Fertilising the oceans: some people want to seed the oceans with iron filings, to speed plankton growth and absorb more carbon. Makes sense at the test-tube level, but having destablised the atmosphere are we really happy to risk doing the same with the oceans?
– Give the planet an umbrella: if bioethanol is a boondoggle for corn growers, this one goes to the aerospace industry. The US government is calling for the IPCC to recognise the potential role of advanced technologies, including the positioning of giant solar shields in place to cut down the amount of incoming solar radiation.
True (longer term) fixes:
– Conservation: this must be the absolute number one priority. Simply changing the energy mix and attempting to find technical fixes to reducing carbon emissions must always be a second-best option.
– Regulation: voluntarism may help spur early experimentation by business, but the key will be regulation – and enforcement. This message is core to the US Climate Action Partnership agenda.
– Incentives: auto manufacturers need to be incentivised to redirect technological advance into improving fuel economy rather than performance. If congestion and other forms of road charging were widely adopted, our consumption of energy – and with it our CO2 emissions – would fall more dramatically and more quickly than chasing new technologies.
– Politics: the biggest challenge is a political challenge, requiring political will, leadership and action. We need to see more US Climate Action Partnerships, working for smarter, more effective incentives for change. If Stavros Dimas and the rest of our Cecil B DeMille cast of European commissioners can’t persuade us and move us along, maybe we need a new commission.
John Elkington is founder and chief entrepreneur at SustainAbility. He blogs here.
Geoff Lye is vice-chairman of SustainAbility, and a research fellow at Green College, Oxford.