Govenrment and Business Environment Case Study

Kyoto Protocol and Auto-emissions (B) - industry response

OR

Abstract:
This is the second of a two-case series on responsiveness of the automobile industry to check auto emissions under the Kyoto regime. With global harmonization of emission control strategies, the auto industry in countries like Canada and member countries of European Union is witnessing voluntary commitments by the automakers to cut down emissions. Despite withdrawing from Kyoto negotiations, the US has put in place stricter fuel economy standards. The automobile industry is expecting to minimise the risk of cost intensive technological improvements by actively participating in Kyoto mechanisms like emissions trading, clean development mechanism (CDM) and joint implementation (JI). The case talks about the initiatives by the Ford Motor Company which is the only auto-manufacturer participating in the U.K. emissions trading program and the Chicago Climate Exchange. Toyota Motor Corporation is actively involved in CDM and JI. These initiatives are opening new opportunities for other auto-makers to join the fray. The market uncertainty of the auto-industry regarding consumer acceptance of eco-friendly vehicles also seems to be getting resolved with growing global demand for hybrid vehicles. Automobile companies like Toyota and Honda have made significant progress in exploiting alternate fuels like hydrogen. But automakers are still skeptical about the cost-effectiveness of new alternatives. It is expected that market-based Kyoto mechanisms will sustain the tempo of emission control initiatives and help to achieve overall reduction in auto emissions.

Pedagogical Objectives:

• To discuss about the initiatives taken by Ford.

Keywords : Government and Business Environment Case Study,Kyoto Protocol, Automobile emissions, Emissions trading, Clean Development Mechanism, Joint Implementation, Emission, standards, Toyota Motor Corporation, Company Average Fuel, Consumption, Voluntary Agreements, Mandatory standards, Fuel economy, Compliance costs, Chicago Climate Exchange, The Ford Motor Company, Technological Advancements