Climate Action Means Industry, Government And People

Thomas Paine wrote that government is inherently punitive, a necessary evil consequent to the “inability of moral virtue to govern the world.” That comes to mind this week, as the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21) meets in Paris. The goal, of questionable achievability, is to keep global warming at two degrees Celsius. 

In this global Paradise Lost narrative, industry can be devil or savior. We have seen it play both ways. Bill Gates and Mark Zuckerberg are taking the optimistic side of that dichotomy with the “Breakthrough Energy Coalition.”

The point of the program is to funnel dollars to startups focused on developing non-hydrocarbon energy technology. Gates concedes that the government has been key to funding breakthroughs, including the one that created the substrate for companies like Microsoft. “But we have to pair that with people who are willing to fund high-risk breakthrough energy companies,” he said.  

How about breakthroughs in the auto business? They have been a work in progress, but with a lot of progress. The Union of Concerned Scientists says cars and trucks constitute about a fifth of U.S. carbon emissions. Most of it comes out the tailpipe, but a slice is also from the extraction, production and delivery of fuel.  But the union's 2014 auto rankings also noted that tailpipe emissions across all vehicles last year were 87% less than they were in 1998. 

I was in Los Angeles for the auto show last week. One memorable part of the visit for me wasn’t at the auto show; I was at the Mt. Wilson observatory in the mountains above L.A., enjoying the view. It was a crystal clear day. I could see all the way to Catalina. Thirty years ago, on such an average day, you couldn’t have seen the next hill over. Government gets credit, as automakers aren’t in the clean air business. California Air Resources Board regulations forced the change. 

Why would automakers have done this on their own? Business is business. Government is in the invidious position of having to crack the whip because car buyers think about what's coming out of their wallets, not their tailpipes. They think about price of ownership, and it is crystal clear from booming crossover and SUV sales that the price at the pump on Sunday determines what people buy on Monday. I want clean air, but I don’t want to pay for it.

If industry doesn't want to be mandated to by government, they will have to take it upon themselves to create a new kind of demand. If you asked people what the Kyoto Protocol is, it is a fair bet that some would have to guess. “Tofu-based diet regimen?”  

As for specific automakers, the union’s auto ranking from last year gave Hyundai and Kia top marks for being green, replacing Honda in first place. Though Volkswagen has lost credibility for obvious reasons, it was actually ahead of Ford, GM and Chrysler Group in developing clean products in 2014. Ford's engine technology, smaller engines, and move into the hybrid-electric sector put it high in the rankings. Chrysler had improved the least among the top eight automakers.

There’s a limit to how clean autos can get. Electric cars don't have tailpipes, but the plants that generate the electricity to charge Teslas do. Hydrogen fuel cell motors like the one in Honda’s Murai car are clean as clean gets, but where do you fuel these vehicles? 

And one lesson from Volkswagen’s agita is that there is a limit to how green you can get, finally, with internal combustion engines, gasoline or diesel, if you also want fuel efficient and performance (which consumers care about a lot more). Meeting EPA Tier III standards, which happen in 2017, will mean, among other things, achieving a 56% reduction in sulphur dioxide and 10% reduction in NOx at the tailpipe. 

Automakers can do this. Do they want to? Of course not, who would? How many people walk into the dealership saying, “I want the cleanest car you have, and I’m willing to pay a bit more for it.” The same number who walk into a supermarket with their own plastic bags. They’ll bring bags when stores charge them for new ones. 

How about perception? In Paris, there are some brutally sarcastic outdoor ads going up. One banner, which looks just like a legit VW ad, has a headline that reads “We're sorry we got caught.” Then: “Now that we've been caught, we're trying to make you think we care about the environment. But we're not the only ones.”

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