The Auto Industry and Climate Change in the US

by Abigail Schantz

The history of the automobile industry, in many respects, illustrates the progression of society’s perception and response to climate change. Caetano C.R. Penna and Frank W. Geels compare the progression of climate change from 1979 to 2012 using the Dialectic Issue LifeCycle (DILC) model in Climate change and the slow reorientation of the American car industry (1979–2012): An application and extension of the Dialectic Issue LifeCycle (DILC) model. The DILC classifies the progression of an issue into five major stages. In the first stage, the problem emerges, generally due to activist groups, and the affected industry rejects the issue and downplays its importance. During this stage, there is little progression in changing technologies. In the second stage, public concern begins to increase as activists generate social movements. Public agendas address the issue and policymakers create committees to study it, although this action is mainly symbolic. In the third stage, rising public concern spurs political debates, leading to formal hearings and investigations. The industry argues for voluntary implementation of solutions and attempts to show that the costs and technical complexity of rapid change make radical solutions impossible. Meanwhile, firms in the industry often take defensive measures, privately exploring solutions in laboratories. In the fourth stage, policies begin to be implemented through legislation. Suppliers and others that support the industry begin to develop technology while the industry itself actively argues against the new policies. At the same time, industry firms begin to invest in alternative technologies and embrace them more publicly in order to maintain the company image. This often leads to an innovation race. Finally, in the fifth phase, a new market emerges due to changes in mainstream consumer preferences and/or because regulators impose taxes or incentives, or other legislation causes a shift in economic conditions. To bolster the public image of the company, most address the problem in the company’s beliefs and mission.

Penna and Geels compare the phases that actually occurred for the auto industry to those predicted by the DILC. To do so, they looked at four major quantifiable factors. First, they searched major news sources including New York Times, USA Today, Wall Street Journal, and Washington Post for articles on climate change, in order to get a sense of public attention towards the issue. Next, consideration by Congress and the Executive Branch was explored through entries in the Congressional Record and the Federal Register. The American edition of Automotive News was used to quantify the attention American automakers were giving to climate change. Finally, the USPTO database was searched for records of patents related to certain technologies in order to see developmental trends in the auto industry. The selected timeframe was broken into the five anticipated stages based on the level of public concern about climate change: 1. 1979–1988 (very little public attention to climate change), 2. 1988–1997 (low-moderate public attention), 3. 1997–2005 (moderate public attention), 4. 2005–2009 (very high public attention) and 5. 2009–2012 (high but decreasing attention). Pemma and Geels found that in the first phase (1979-1988), new scientific evidence on climate change became available and the topic started to be discussed at scientific meetings and conferences. Due to the oil crises of 1973 and 1979, the federal government already had fuel economy regulations in place. Additionally, the auto industry was working on beneficial improvements in cars, such as the three-way catalytic converter, to reduce air pollution. At the same time, the automobile market was shifting towards larger size vehicles like minivans and SUVs. In 1986, Senator Al Gore and others declared concern about climate change and called for political action, putting the issue more on the public radar.

By the second phase (1988–1997), public attention was increasing in part due to natural changes noticed in environment, such as unusually hot summers and the prevalence of droughts. In this stage, there was a Senate hearing on the climate change and, in both 1990 and 1996, reports were released by the newly created Intergovernmental Panel on Climate Change (IPCC), helping to distribute information about the problem. Both President Bush (Senior) and President Clinton took collaborative and voluntary approaches to addressing the issue, prompting development of technologies without imposing regulations. California, on the other hand, created the 1990 ‘Zero-Emissions Vehicle’ (ZEV) mandate. By 1994, other states were considering adopting similar mandates, which led the “Big Three” (GM, Ford, and Chrysler) to begin major lobbying campaigns. Before long, attempts at stronger regulation regulations began to decrease.

Stage Three (1997–2005) became increasingly international. In the Kyoto Protocol (1997), many countries pledged to reduce green-house-gas emissions 5% below 1990s levels by 2012. The US did not sign the protocol, but international car brands with major sales in the US began to adopt new technologies. Both Toyota and Honda released hybrid cars, the Prius and the Insight respectively. By 2007, the Prius was the eighth best selling car in the U.S. Although the US government was not doing much in the way of regulations due to fear about energy security, the government invested heavily in the technological development of alternative energies, mostly fuel cells.

Social changes were largely the driving force of the increase in pubic sensitivity to climate change during the fourth stage (2005–2009). At the 2005 G8 meeting, Tony Blair announced climate change as a top priority. The same year, Hollywood released Day after Tomorrow, a movie drastically overdramatizing sudden effects of climate change. In 2007, both IPCC’s Fourth Assessment Report and Al Gore’s An Inconvenient Truth, helped broaden public understanding of the issue and increase prevention efforts, winning IPCC and Al Gore the Nobel Peace Prize. Meanwhile, Toyota had taken the lead in HEV but many new entrants emerged in the market, including Tesla.

The fifth stage (2009–2012) saw an unexpected decrease in public concern due to the financial crisis, which caused people to focus on the faltering economy. Climate change skeptics took the opportunity to attack the scientific basis of climate change, creating doubt within the population. Newly elected President Obama did impose some new regulations and mandates, but overall the movement dwindled.

Comparing the five phases of attention to climate change to the five phases predicted through the DILC model allowed Penna and Geels to identify plausible inconsistencies that would result in the climate change movement not following a typical pattern. They classified both stages four and five as equivalent to phase 3 1/2 in the DILC model. The authors predict that in order to shift to stage 4 from stage 3, there must be one dominant solution to the problem. But the plausible solutions for improving the environmental footprint of cars are too numerous for companies to be able to commit to a single solution, and the risk of choosing the wrong one is too high. Also, the DILC model predicts radical changes to start occurring no earlier than stage 3, while in the auto industry, because of firms acting with strong political agendas, changes were occurring long before phase 3 was reached. Finally, the correlation between changes in the auto industry and other concerns, such as air pollution, rising oil prices, energy security, and the financial downturn, cause each stage of the lifecycle to be influenced by factors aside from climate change.

 

Penna, C.R. C., Geels, W. F. 2014. Climate change and the slow reorientation of the American car industry (1979–2012): An application and extension of the Dialectic Issue LifeCycle (DILC) model. Research Policy.

 

A look at the #history of the #americanautomobile industry and its response to #climatechange.http://bit.ly/1YC3iF2

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