Mike Millikin reports on the continuing evolution of personal transportation at Green Car Congress (Posted December 20, 2005.)
Ford Motor has issued a report directly addressing the business implications of climate change, carbon dioxide emissions and global energy concerns.
The report also outlines some of the resulting product directions Ford will take, including greater use of direct injection and downsized gasoline engines, diesel micro-hybrids in Europe, and a greater use of hybrid and non-hybrid PowerPacks -- engine and transmission modules -- across its brands.
Although other automakers (Ford included) issue environmental and sustainability reports, with this report -- the Business Impact of Climate Change (BICC) (PDF) -- Ford becomes the first openly to outline and to discuss its view of the different factors contributing to the complexity of the climate change problem as well as potential solutions.
A shareholder resolution filed in November 2004 by the Interfaith Center on Corporate Responsibility (ICCR), Ceres (a coalition of investors and environmental groups and founder of the Investor Network on Climate Risk) and others was subsequently withdrawn in March 2005 when Ford announced it would publish this report.
Concerns about climate changealong with growing constraints on the use and availability of carbon-based fuelsaffect our operations, our customers, our investors and our communities. The issue warrants precautionary, prudent and early actions to enhance our competitiveness and protect our profitability in an increasingly carbon-constrained economy.
The relevant long-term challenge facing society today and in the future is to stabilize the concentration of GHGs in the atmosphere at a level that prevents dangerous human-induced interference with the climate system.
...while we are proud of our accomplishment in reducing CO2 from our operations [15% reduction since 2000] and have benefited from the energy cost savings that go with it, we recognize that only about 10 percent of the lifetime GHG emissions from a vehicle occur during its production. The remaining 90 percent attributed to each vehicle is emitted when the customer is using itwhen it burns gasoline or diesel fuel from fossil sources.
[...]This means that addressing lifecycle GHG emissions depends on engaging consumers on their purchase decisions, driving behavior and their choice of fuels.
[...]Finally, early, affordable steps to reduce GHG emissions and improve fuel efficiency may delay the need for drastic and costly reductions later. Lack of agreement on long term solutions cannot be used as an excuse to avoid near term actions.
Ford sees the opportunities to reduce in-use GHG emissions defined (or limited) by three inter-related factors:
Ford notes that because customer and policy priorities differ around the world, its approaches to markets vary accordingly. Europes regulatory focus on CO2 reduction, for example, has Ford participating in the ACEA effort to voluntarily reduce CO2 emissions. (The ACEA effort seems likely to fail, and Europe is gearing up for more stringent mandated reductions.)
Ford links its investment in hybrid production in the US to a (slowly) growing consumer demand for more fuel-efficient vehicles, and links its support for an ethanol infrastructure in the US to calls for less dependence on imported oil.
Each of these initiatives results in lower CO2 emissions, but emerges from different market and policy priorities.
Ford does not address its support of the challenge in court of the California legislation mandating substantial CO2 reductions in new cars.
In an appendix at the end of the report, Ford addresses the contradiction inherent in its support for the court challenge against California’s GHG regulations by embracing the industry argument that the regulations amount to state-level fuel-efficiency regulations.
Ford supports the reduction of vehicle CO2 emissions and is working aggressively toward the development and implementation of real, market-based solutions. However, the entire automobile industry is united in opposition to the AB 1493 rules because they constitute state fuel economy standards.
California, of course, disagrees.
Ford views its approach to climate change through three primary business drivers:
Ford also notes four main characteristics of the global automotive bear significantly on how it responds to climate change:
Product. On the product side, Ford has already announced its plans to expand its capacity to build hybrid electric vehicles to 250,000 units per year by 2010, as well as a commitment on flexible fuel vehicles.
Ford says that it will expand its application of existing technologies that deliver fuel economy benefits including variable valve timing, fuel shut off, direct injection gasoline engines, clean diesel, and six-speed transmissions.
The company is also increasing its investment in a portfolio of technologies that deliver improved fuel economy and lower GHG emissions, including:
At the portfolio level, the mix of vehicles we sell will continue to be dictated by the marketplace, but we believe that the trend towards more fuel efficient vehicles, such as cross-over vehicles and smaller SUVs will continue. In addition, by utilizing common platforms, we will be able to offer greater fuel economy across a wide range of product designs. Specifically, we will be better able to apply weight reductions achieved in one model to other models without compromising safety, quality or performance.