Concluding Remarks

The voluntary CO2 agreement between the European Commission and the automotive industry is probably the most important EU initiative to curb carbon emissions, as it addresses the rapidly growing sector of road transport that almost cancels out other attempts to meet the EU 8% GHG reduction target under the Kyoto Protocol. Until the end of 2003 the industry had achieved about half of its target, which means that, in the absence of strong technical progress and remarkable changes in consumer behavior in the coming years, the commitment can only be fulfilled with some years' delay.

Although it seems that the VA has induced (or accelerated) technological improvements in automobiles, some analysts question whether it has made a great difference. They contend that progress has been mainly based on technologies that were already mature and would have been brought into the market anyhow. The rapid increase in the sales shares of diesel cars has also played an important role, and shifts between car segments may have had a stronger effect than initially thought; the latter point requires a more detailed analysis to provide a reliable answer.

Despite some optimistic forecasts produced by authoritative European experts, there is currently little evidence that fuel economy improvements will persist after 2009. As climate change is now an important issue worldwide, one can reasonably expect that some autonomous improvements will take place, but they will not be remarkable under "business as usual" conditions. To accomplish further progress will probably require a combination of regulations (for the automotive and oil industry to be legally committed) and economic instruments (for consumers to prefer more fuel efficient cars). VAs can also be effective provided that regulations are clearly stated to be the next best alternative.

In order to make real progress in curbing CO2 emissions, however, policy makers need to keep in mind two more risks. One is the "rebound effect": as fuel consumption lowers and cars become cheaper to run, drivers may purchase bigger cars and travel more with them, thus diminishing expected fuel savings by 20-40% (Greene et al. 1999; IPCC 2001). The second risk is associated with the well-documented discrepancy between car fuel consumption as measured in the official driving cycles and that on the road under real-world driving. According to national and international studies, this "gap" has been estimated to be on the order of 10-20% in Europe and may increase in the future (Landwehr and Marie-Lilliu 2002). This, however, remains to be confirmed by ongoing experimental studies such as the European research project ARTEMIS3 as well as national projects.

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