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The regulatory engine: How smart policy drives vehicle innovation

Published Mon, 2011.01.10 | By

Drew Kodjak, Anup Bandivadekar, John German, and Nicholas Lutsey

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Summary

Regulations to reduce GHG emissions are driving a flood of investment in industries and innovative technologies that fuel economic growth while attacking the global problem of inefficient use of expensive, polluting oil.


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Continuously variable transmissions, integrated start-stop, camless valve actuation, variable timing, low-friction lubricants: when most of us think of clean car technologies these are not the kinds of things that leap first to mind. Yet these and other low-profile developments in engine and vehicle design and manufacturing are as important to improving vehicle efficiency and reducing carbon dioxide emissions as more radical, headline-grabbing transformations like all-electric drive—much more important in the short run, in fact.

Investment in these new technologies fosters innovation in a range of industries: batteries, electronics, lightweight-materials manufacturing, and more. Those industries are powering economic growth and creating jobs worldwide, from the U.S. Rust Belt to Europe to southern China, while helping to solve a common problem: the inefficient consumption of expensive, polluting oil.

What is driving those investments? One part of the answer may come as a surprise: Regulation. Across the globe, tightening fuel-economy rules are stimulating innovation. New regulations, springing from powerful, long-term public policy drivers such as climate change and oil security, spur demand for low-carbon technology and create openings for inventive, high-tech approaches.

The Regulatory Engine: How Smart Policy Drives Vehicle Innovation is a concise summary of the technologies in play and the state of fuel and vehicle efficiency standards in the key automotive markets worldwide. It is the most recent installment in the ClimateWorks Network Knowledge Series, which spotlights the latest thinking on policies, technologies, and best practices that can transform our energy systems, protect the earth’s tropical forests, and prevent dangerous climate change.

Continuously variable transmissions, integrated start-stop, camless valve actuation, variable timing, low-friction lubricants: when most of us think of clean car technologies these are not the kinds of things that leap first to mind. Yet these and other low-profile developments in engine and vehicle design and manufacturing are as important to improving vehicle efficiency and reducing carbon dioxide emissions as more radical, headline-grabbing transformations like all-electric drive—much more important in the short run, in fact.

Investment in these new technologies fosters innovation in a range of industries: batteries, electronics, lightweight-materials manufacturing, and more. Those industries are powering economic growth and creating jobs worldwide, from the U.S. Rust Belt to Europe to southern China, while helping to solve a common problem: the inefficient consumption of expensive, polluting oil.

What is driving those investments? One part of the answer may come as a surprise: Regulation. Across the globe, tightening fuel-economy rules are stimulating innovation. New regulations, springing from powerful, long-term public policy drivers such as climate change and oil security, spur demand for low-carbon technology and create openings for inventive, high-tech approaches.

The Regulatory Engine: How Smart Policy Drives Vehicle Innovation is a concise summary of the technologies in play and the state of fuel and vehicle efficiency standards in the key automotive markets worldwide. It is the most recent installment in the ClimateWorks Network Knowledge Series, which spotlights the latest thinking on policies, technologies, and best practices that can transform our energy systems, protect the earth’s tropical forests, and prevent dangerous climate change.