This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email

Carmakers and Emissions

Defeat for carmakers in plea on emissions

By Joshua Chaffin in Brussels and John Reed in London

Published: September 25 2008 18:05 | Last updated: September 25 2008 18:05

Carmakers were rebuffed in their efforts to roll back planned restrictions on carbon dioxide emissions after a surprise vote on Thursday by the European parliament’s environmental committee.

The vote came as a blow to the car industry, especially premium carmakers such as BMW and Porsche, which produce many large-engined and higher-emission vehicles, and had lobbied against the European Commission’s proposals

Under the terms approved by the committee, new cars will not be permitted to emit more than 130 grammes of carbon dioxide per kilometre starting in 2012 – a 24 per cent reduction from current averages of 158 grammes per kilometre. The limit will fall to 95 grammes by 2020, subject to a review in 2014.

Car industry lobbyists had won support from Guido Sacconi, the Italian socialist MEP guiding the bill through the committee, to extend the deadline to 2015, reduce penalties for non-compliance and allow carmakers to exempt some brands.

However, members of Mr Sacconi’s own political grouping rejected his compromise package, and supported measures in line with previous recommendations issued by the Commission.

“It’s a defeat for the corporate lobbyists who were trying to get the committee to take a step backwards in their greenhouse gas reductions,” said Chris Davies, a British liberal MEP.

Mr Sacconi expressed disappointment at the vote, and indicated that environmentalists would have to accept compromises for the bill to win final approval from the full parliament and EU member countries by the end of the year. “We ended up throwing out the baby with the bath water,” he said.

Acea, the industry lobby group, which had supported the phasing in by 2015 called the draft “bad news for Europe”, and cited the mounting pressures of a slowing economy.

“It’s obvious that the environment committee doesn’t care whether this industry stays or doesn’t stay in Europe,” Ivan Hodac, Acea’s general secretary, told the FT. The committee had gone “all the way and voted on something we have said we cannot comply with”, he added.

The draft approved on Thursday does allow carmakers to use “eco-innovations” such as low-rolling-resistance tyres when calculating their CO2 cuts. At the prodding of Britain, it also includes special arrangements for low-volume manufacturers such as Lotus, Aston Martin and Jaguar and Land Rover.

Cars account for about 14 per cent of Europe’s carbon dioxide emissions, and have been one of the fastest-growing sources in spite of repeated promises by the industry to enact voluntary reductions.

However, car companies argued that the 2012 deadline was unachievable, given the industry’s long product cycles.

Mr Hodac said that about 60 per cent of the cars that would be on the road in four years’ time were either on sale now or in the final stage of development.