Automotive Corporations’ Performance in the Environmental Field. A comparison between the European Union and the United States.

Abstract

Nowadays, the commitment to reduce emissions in all productive sectors is more than ever a paramount goal that each country in the world should try to achieve. The Kyoto Protocol and the Paris Agreement have contributed in spreading all over the world the unavoidable need of reducing greenhouse gas emissions and making the productive processes more sustainable. Countries like the European Union and the United States of America work as examples to others due to their long experiences in regulating emissions from multiple sectors and in implementing key strategies for incentivizing the change towards sustainability. Either through effective emission trading schemes or specific directives and regulations, both the European Union and the USA are currently covering the majority of their productive sectors. In this paper, the focus will be on the automotive industry, a major source of CO2 emissions, which contribute to climate change, and harmful pollutants, which are dangerous for human beings. An analysis of the actions taken in the two similar markets of the European Union and the USA will be conducted, and, in particular, the attention will be put on the legislation affecting the light-duty vehicles manufacturers. The standards, the targets and their levels of stringency for reducing GHG emissions will be examined, taking into account the changes that took place throughout the years since the beginning of their implementation and the ultimate goals of limiting global warming to 1.5°C and of reducing CO2 emissions by 45% by 2030. In addition, particular attention will be granted to incentives encouraging carmakers to invest in, produce and sell low-emission and alternative fueled vehicles. The aim of this paper is to investigate strategically whether the instruments adopted by the European Union and the United States of America to regulate the environmental side of the automotive sector are truly effective, especially from the corporate point of view. Considering the different targets and standards set by the EU and the US, the performance of automotive corporations’ will be assessed to determine which one works better in terms of environmental goals’ achievement and businesses’ incentives.