New Technologies and the Environment

FS H 88-404

New Technologies and the Environment

The Example of the Automobile by

Helmut Schreiber, Erwin Paschke

Wissenschaftszentrum Berlin (WZB), Science Center Berlin Reichpietschufer 50, D -1000 Berlin 30

ACKNOWLEDGMENTS

This study has been undertaken from 1986 to 1988.

Most of the research has been done at the International Institute for Environment and Society of the Science Center in Berlin-West. The study has been completed at the Institute for European Environmental Policy in Bonn. In addition, the research has been made possible through a travel grant from the French Centre National de Recherche Scientifique (CNRS) in Paris.

We would like to thank all car companies and suppliers for their support and cooperation. We also thank Chris­

tiane Barrier-Lynn (CNRS, Paris), Jacques Lambert, (Lyon), Udo Simonis, (Science Center, Berlin-West), for his invaluable comments to earlier drafts of this study and in particular Veronica Schreiber for editing work.

Helmut Schreiber/ Erwin Paschke Bonn/Berlin, January 1989

SUMMARY

The speed of technological innovations in all parts of the German economy has grown considerably during the last years. In this study, we examine the results of these processes of innovation and answer the question:

what role has environmental thinking played in these innovations ?

One result of the study is that environmental protec­

tion is an important element of the new car generation.

Environmental protection does not, however, dominate the innovation process. Another result is that the Ger­

man car industry - and this also includes the supply industry - has been well prepared for the new environ­

mental measures and standards. There are nevertheless differences among the manufactures. German car manufac­

tures have been often forerunners in the field of envi­

ronmental protection. One reason for the good standing of the German car industry is the funding by governmen­

tal agencies dealing mainly with the reduction of fuel consumption. In the coming years, it can be expected that the German car manufacturers will be able to meet the highest environmental standards.

Nevertheless it has to be stated that the overall prob­

lems (i.e., C02 and NO*-Emissions, the Waldsterben, the social costs of accidents) to a high degree caused by motor traffic will probably not even partly be solved through the measures of the car manufacturers. It can be expected that despite their innovativeness these problems (without strong governmental initiatives) will grow worse in particular in an international context.

KURZZUSAMMENFASSUNG

Das Tempo der technologischen Innovationen in allen Be­

reichen der Industrie hat sich in den letzten Jahren beschleunigt, so auch in der Automobilindustrie. In dieser Studie werden die Auswirkungen der technologi­

schen Innovationsprozesse in der deutschen Automobilin­

dustrie untersucht und der Frage nachgegangen, welche Rolle bei diesen Innovationsprozessen der Umweltschutz gespielt hat.

Die Studie kommt zu dem Ergebnis, daß der Umweltschutz ein wichtiges Element der neuen Automobilgeneration ist, daß er aber keinesfalls den Innovationsprozeß ent­

scheidend geprägt hat. Es kann außerdem nachgewiesen werden, daß die deutsche Automobilindustrie - und dabei sind auch die Zulieferer miteingeschlossen- (mit deut­

lichen Unterschieden zwischen den verschiedenen Konzer­

nen) insgesamt gut auf die neuen nationalen und inter­

nationalen umweltschutzpolitischen Maßnahmen und Vor­

schriften vorbereitet waren. Einige deutsche Un­

ternehmen haben Schrittmacherfunktionen bei der Er­

probung und Einführung neuer und fortschrittlicher Um- weltschutztechnologien geleistet. Eine Ursache für das gute "Abschneiden" der deutschen Automobilunternehmen waren nicht zuletzt auch die staatlichen Förderungspro­

gramme der Bundesregierung insbesondere bei der ratio­

nelleren Nutzung der Energie. Auch in den kommenden Jahren kann damit gerechnet werden, daß die deutsche Automobilindustrie sehr wohl in der Lage sein wird, auch die höchsten Umweltschutzstandards zu erfüllen.

Eine auch nur teilweise Lösung der durch den Verkehr mitverursachten oder verursachten Umweltproblerne (Stichworte: CO~-Problematik, N0x-Emissionen, Waldster­

ben) und sozialen Kosten insgesamt (Stichwort z.B.:

steigende Unfallziffern) ist damit allerdings nicht verbunden. Es ist zu erwarten, daß trotz der Aufge­

schlossenheit der deutschen Automobilindustrie gegen­

über von ihr leistbaren (und nicht gegen ihr zentrales Ziel, nämlich den Verkauf von möglichst vielen Automo­

bilen verstoßenden) Umweltschutzmaßnahmen sich diese Probleme, vor allem Europaweit, ohne durchgreifende staatliche Maßnahmen und Auflagen, die den Verkehr als Ganzes regeln, weiter verschärfen werden.

TABLE OF CONTENTS

Acknowledgements ... 3

Summary... 3

KurzZusammenfassung ... 4

Table of Contents...5

Table of T a b l e s ...7

1. Introduction...8

2. The German Car Industry and the "Luxemburg Compromise" - An Overview... 15

2.1 The German Car M a r k e t ... 26

2.2 Fiscal Incentives and the "Luxemburg Compromise" ... 32

2.3 Different Standards in Different Markets ... 36

2.4 Catalysts... 39

2.5 D i e s e l ... 43

3. Case S t u d i e s ... 46

3.1 Car Industry... 46

3.1.1 Daimler-Benz (Mercedes) ... 47

3.1.1.1 Market, Research and Em­ ployment 47 3.1.1.2 Strategies 52 3.1.2 Volkswagen... 55

3.1.2.1 Market, Research and Em­ ployment 55 3.1.2.2 Research and Strategies 60 3.1.3 Opel ...62

3.1.3.1 Market, Research and Em­

ployment 62

3.1.3.2 Research and Strategies 67 3.1.4 F o r d ... 69

3.1.4.1 Market, Research and Em­

ployment 69

3.1.4.2 Research and Strategies 73 3.1.5 B M W ... 74

3.1.5.1 Market, Research and Em­

ployment 74

3.1.5.2 Research and Strategies 80 3.1.6 FIAT: An "Excursion" ... 82

3.1.6.1 Market, Research and Em­

ployment 82

3.1.6.2 Strategies 84

3.2 Suppliers... 86 3.2.1 Introduction... 86 3.2.2 B o s c h ... ... . 88

3.2.2.1 Market 88

3.2.2.2 Research and Strategies 92 3.2.3 D e g u s s a ... ... ..94

3.2.3.1 Market 94

3.2.3.2 Research and Strategies 95 3.2.4 Other Equipment Companies ... 96 4. Summary and Prognosis... 99

Literature 117

TABLE OF TABLES

Table 1: Development of the car business in the FRG (passenger cars) ... 28 Table 2: Overview of the several test cycles for

the verification of automobile emissions... 38 Table 3: The standards set by the 'Luxemburg

Compromise' ... 46 Table 4: Total returns, profit and relation re­

turn/ profit over the past 10 years (only car-department of the trust, in millions of DM) ... 49 Table 5: Total returns, profits and relation re-

turns/profit in percent over the past 10 years (in millions of DM) ... 58 Table 6 Technology, price increase and fuel

consumption increase/decrease per technology... 59 Table 7: Return, profit and relation of profit

and return in percent of the Adam Opel AG (in millions of DM) over the past 10 years... . 64 Table 8: Total returns, profit and profit rate

over the last 10 years (in millions of DM) ... ... . 70 Table 9: Total returns, profit and profit rate

over the last 10 years (in millions of DM) ...76 Table 10: The Bosch Group - Financial Indica

t o r s ...91 Table 11: Development of Spending for Research .... 93 Table 12: Employment of the Robert Bosch

C o m p a n y ...94

1. INTRODUCTION

The main objective of this study is to analyze how the car industry in the Federal Republic of Germany (FRG) has reacted to the legislation of the European Commu­

nity concerning automobile emissions, particularly to the "Luxemburg Compromise" of June 1985 and to the en­

vironmental discussion in the FRG. To do so, we inter­

viewed officials of the major German car manufacturers, namely Daimler-Benz (Mercedes), Volkswagen (VW), Opel, Ford, BMW and, as a special case, FIAT (as the largest importer), and the major suppliers of the car industry, Bosch and Degussa. We developed a special questionnaire that served as a basic guide for the interviews. Beside the personal communication a follow-up in form of written statements was mailed.

As a first result of this research, we give here an overview on the subjective reaction of the German car and car suppliers industries to national and interna­

tional emission legislation and to the environmental challenge in general.

In our opinion, it is of particular importance for a social scientist and environmental researcher to ana­

lyze the action and reaction (even the conscience) of industry on the environmental challenge. We think that the relation between industry and social scientists and/or environmental minded citizens should be im-

* proved. -1

The magazine "Natur" has made an inquiry of 64 trusts on the question, what have they done in fa-

In doing so, not all efforts should be concentrated on the question of the introduction of catalytic convert­

ers (catalysts) within the European Community. Although this was an important first step to what may be called

"environmental adaptation" of car traffic. Regarding long-term-development, however, it is only a restricted point of view.

Car traffic, from an environmental point of view, is a very unfavourable form of traffic.- The most alarming

vour of the environmental adaptation of their products and if a personal visit would be possi­

ble. 36 firms did not answer. 14 firms refused to talk with the magazine, but 14 trusts (like Daim­

ler-Benz, BMW, Boehringer, BASF, Mannesmann) ope­

ned their doors and were visited by a journalist of "Natur". A short summary: "Industry is doing something for the environment, even more, much more, than can be expected from outside the indu­

stry. But also the magnitude of the problem beco­

mes clearer and clearer. ... Even in companies with bad "environmental" reputation we found bright and committed people. But everyone is loo­

king only at the specific problems of the company, nobody has the whole picture anymore." See M. Bis­

singer, in "Natur", no. 9, 1988, p. 3. The results of the meetings of "Natur" and industry in detail are to be found in: "Natur", no. 9, 1988 and the following issues.

There are numerous studies that underline this theses. See for a more detailed discription: Acid News, 1986. Europe: Trafficking in pollution. No.

3-4, Dec. 1986, p. 1 - 5 ; Harburger, E.A., 1974.

Die ökonomische Beurteilung des städtischen Um­

weltbelastung durch Automobilabgase. Düsseldorf;

Marchetti, C., 1986. L'automobile en danger de mort. Ou Futuribles interpellö. In: Futuribles.

No.99, May 1986, p. 27.; Markham, A., 1987. The Perils of Vehicle Emissions. New Priorities in Transport Conference. Friends of the Earth; Mayer, N., 1981. Kraftfahrzeug und Umwelt - auch ein öko- nonisches Problem. Frankfurt a. M . ; Nebelung, H., 1974. Wege zur umweltfreundlichen Gestaltung des Individualverkehrs. In: Internationales Verkehrs­

wesen. No. 26, 1974, p. 56 - 61; Nebelung, H . , 1974. Wege zur umweltfreundlichen Gestaltung des Individualverkehrs. In: Internationales Verkehrs­

wesen. No. 26, 1974, p. 56 - 61; Neuefeind, R.,

effects of mass motorisation may not be the depletion of oil but the large-scale damage to human health and the natural environment.Researchers at the University of California estimate:

"... that the use of gasoline and Diesel fuel in the United States alone may cause up to 30,000 deaths every year. And the American Lung Association estimates that air pollution from motor vehicles, power plants, and industrial fuel combustion costs the United States $40 billion annu­

ally in health care and lost productivity.

M 3

For a too long time, these effects of motorisation have been ignored and it has not been made clear who has to shoulder the social costs of motorization.- Today, car

1978. Verkehrspolitik und Umweltschutz. Köln; Neu­

mann, R., 1975. Die qualitative und quantitative Beeinträchtigung der Umwelt durch den Kfz.-Ver­

kehr. Königswinter; Neumann, R., 1980. Ökologie und Verkehr. Praktische Bedeutung und theoretische Einordnung verkehrsinduzierter Umweltschäden. Ber­

lin; OECD, 1986. Environmental Effects of Automo­

tive Transport. The OECD Compass Project. Paris:

OECD; OECD, 1988. Transport and the Environment.

Paris: OECD; Rosner, D./ Markowitz, G., 1985. A 'Gift of God'?: The Public Health Controversy over Leaded Gasoline during the 1920s. In: American Journal of Public Health. April 1985, Vol. 75, No.

4, p. 344 - 352; Der Tagesspiegel, 1988. Groß­

stadtbewohner atmen weltweit zu viele Giftstoffe ein. No. 13066, 17.09.88, p. 24; Taschner, Dr.

K.(ed.), 1987. The Clean Car - A Challenge for Eu­

rope. London; VCD Report. Autofahren muß teurer werden; Wicke, Prof. Dr. L., 1987. Eingangssta­

tement beim Diskussionsforum auf der 52. IAA "So­

zialer Nutzen und soziale Kosten des Automobils - Eine positive Bilanz?" am 18. September 1987 in Frankfurt a. M. and

See Renner, M . , 1988. Rethinking the Role of the Car, Washington 1988, p. 35.

The costs of car traffic in the FRG are specified in W. Wolf, Eisenbahn und Autowahn, Heidelberg 1986.

traffic is subsidized in several ways, the most impor­

tant are:

road construction and maintenance is normally financed by public institutions^

injuries and long-term health damages caused by accidents or pollution- in contrast are shouldered by the people themselves and their insurances;

environmental damages have to be carried by the owner of the damaged good (for example by the forest owners) or by all citizens.

Automobilists say that in the FRG costs of road construction and taxes on car utilization and on fuel or Diesel are almost equal. See "Der Tages­

spiegel", 8. 10. 1988. This may be true if only the plain numbers are taken into accout, without giving attention to the consequences and implica­

tions of car traffic, like damages to the health of people and the environmental damages.

Concerning the social costs of car traffic see for more detailed descriptions Willeke, R . , 1984. Die Sozialkosten des Verkehrs - Last oder Preis? In:

Internationales Verkehrswesen. No. 36, 1984, p . ¹⁵ - 19; Willeke, R., 1984. Sozialkosten des Straßen­

verkehrs und das Verursacherprinzip. In: Ewers, H.J. et. al. (eds.). Probleme der Ordnungs und Strukturpolitik. Göttingen. P. 291 - 303; Wolf, W. , 1987. Auf der Fahrt in die totale Autoge­

sellschaft: Zehn Thesen zum Transport von Menschen und Gütern auf Straße und Schiene. In: Gew­

erkschaftliche Monatshefte. 10/1987, p. 598 - 609;

Zoumard, R., 1982. Effets des pollutants automo­

biles sur la santö; Langenfeld, J., 1984. The Costs and Benefitz of Automobile Emissions Con­

trols and Safety Regulation. Washington D.C.;

Narr, W.-D., 1986. Auto und Menschenrechte. In:

Wechselwirkung. No. 29, May 1986, p. 16 -20 and Sachs, W ., 1987. Die auto-mobile Gesellschaft - Vom Aufstieg und Niedergang einer Utopie. In: Gew­

erkschaftliche Monatshefte. 10/1987, p. 577 - 587.

As a brief and pointed resume it can be said that the proliferation of cars has led to the multiple crises of oil depletion, air pollution, looming climate change, and congestion. - These processes should be stopped - not only from an explicit environmental point of view.

The world as an ecological entity cannot bear continu­

ing environmental destruction and deteriorating condi­

tions for human life. Traffic and transportation both play a decisive role in the process of environmental degradation. Therefore, the autocentered society of our time should be transformed. In the future, car traffic should have lost its role as destroyer of human health and environment.

This can be achieved, when the car industry adapts its products to ecological needs-. Therefore, a certain re­

duction of individual car traffic in the medium term is inevitable. A bigger diversity of transport modes should replace the dominance of individual car traffic.

Cars, buses, rail systems, bicycles and walking have to complement each other.

Through our research we wanted to find out if car com­

panies in West-Germany have a strategy for these envi­

ronmental challenges. The "Luxemburg Compromise" (June 1985) and the following compromises in 1988 of standard

See Renner, op. cit. p. 55.

This adaptation, according to some environmental­

ist, could mean: First: reduction of car emis­

sions; reduction of speed and noise. Second: the whole market economy is based on what can be cal­

led "planned obsolescence" as a strategy of bu­

siness. Products should become obsolete as soon as possible, for getting higher returns when the con­

sumers buy a new product. On the car market, this planned obsolescence is particularly unfavorable in an ecological sense because resources are wa­

sted, and products become waste after a short time.

setting for car emissions have been first steps. We also wanted to find out if the car industry took the

"Luxemburg Compromise" as a sign that the age of unlim­

ited growth is about to reach its end. Are there strategies for the future which have left the pattern of "more and more cars"? Do the car trusts see the need for diversification in the long run, i.e. is it not to be totally dependent on the selling of cars when the point of saturation comes? Is their strategy influenced at all by environmental consideration as pointed out here?

But there are also risks for car manufactures by grow­

ing international competition, which cannot be ignored:

the fulfilment of the European internal market from 1992 onwards will certainly increase the pressure on car manufacturers to reduce costs.

Reducing costs under pressure of world-wide competitors who do not always have to face the same environmental standards as the German car industry and growing investments in environ­

mental equipment could lead to a loss of mar­

ket shares;

the European internal market is but one part of the world market. New elements will be in­

troduced in this world market, new important markets in China, India, and Africa will evolve. It is not very probable that the de­

velopment of these markets will always suit environmental necessities. On the other hand, in the Third World new strategies of dealing with traffic problems could be promoted. Mass motorization to a western scale is impossible in these countries because financial resources are insufficient in several areas - construe-

tion of roads (infrastructure), payment of the cars, maintenance of vehicles.

The car industry may even be ready to accept restric­

tions and adopt strict standards in favour of the envi­

ronment if restrictions and standards are announced in time and are computable. But the market so far is widely contradictory to environmental necessities. Sub­

jective goodwill is constrained by objective parameters.

In our study, we will give an overview on the situation of the car industry in the FRG Emphasis will be given on the necessity of "environmental adaptation" of car traffic in the future as a basic pre-requisite of car- development and car-traffic. All presented data refer to passenger cars, although the necessity to adapt traffic to environmental needs is not restricted to this type of vehicle. The lorry traffic in particular must be integrated in a concept of environmentally adapted traffic system.

As said earlier, imposing emission-standards for passenger cars was one step to a potentially effective emission legislation within the EC. However, many diverging interests had to be unified; it is an objective political problem to find a compromise.

Nevertheless, it was an important signal to stress the environmental issue in face of the introduction of the free European internal market from 1992 onwards.

The crux of our research are the case studies of the car industry in the FRG presented in part 3. In part 2, we will first give some information concerning the sit­

uation of car traffic in the FRG, for the better under­

standing of the context of our research.

2. THE GERMAN CAR INDUSTRY AND THE "LUXEMBURG COMPRO­

MISE" - AN OVERVIEW

After the Second World War, the reconstruction of the transportation system was of utmost importance for the recovery of the social and economic life in the Federal Republic of Germany (FRG). In housing, work, social services and private life, transportation became an im­

portant link between and among the spheres - conse­

quently the transportation industry and transportation infrastructure expanded rapidly.

From 1960 to 1987, the capital investments in the transportation sector grew by about 250 per cent.- The largest share went in motor traffic^; its share con­

cerning total capital investments grew from 51 per cent in 1960 to 62 per cent in 1987. All other investments in transportation industry and transport infrastructure lost ground compared to motor traffic, particularly the railway-system. Here, both in transportation of people and products there was a relative decrease in total in­

vestments of 9 per cent, from 30 per cent to 21 per cent in transporting products, and of 6 per cent, from

See also Verband der deutschen Automobilindustrie e.V. (VDA), 1980. Rahmendaten für die Enwicklung der Automobilindustrie in der BRD in den 80er Jah­

ren. Frankfurt a. M . ; Fünzigste Internationale Au- tomobilaustellung, 1983. Das Auto - Motor unserer Zeit. Frankfurt a. M . ; Eymüller, H.B., 1977. Die Automobilindustrie in der BRD. Frankfurt a. M. and Diekmann, A . , 1975. Die Automobilnachfrage als als Konjunktur- und Wachsturnsfaktor. Eine Input-Out­

put- Studie. Tübingen.

io See DIW, Berlin, 1983.

46 per cent to 40 per cent, in transporting people. By contrast, the number of city- and village-linking routes and motorways^ increased drastically. —

This trend in the development of motor traffic in the country was widely accepted by the majority of the pop­

ulation. In the 1960s, individual traffic became a sym­

bol of the German recovery in the fields of economy and international competition. Motor traffic became so pop­

ular that over-estimate took place regarding this in­

strument of transportation.

The discussion about a rational distribution of tasks in traffic (between car traffic and railways) was blocked and is still hindered, because costs of car traffic are widely underestimated. For example, envi­

ronmental damages of car traffic still rest largely un­

paid. Huge subsidies for car traffic seem to be natural and taxes are spent for the financing of road construc­

tion, motorways and the managing of the adverse conse­

quences of car traffic. The railway-system, by con­

trast, had to accept a steadily growing deficit. In 1987 alone, the deficit amounted to some DM 2,8 bil­

lions — , because a growing number of people and prod­

ucts were transported by car or lorry.

See German Minister of transport: Verkehr in Zah­

len, Bonn 1 9 8 6 , p . 110.

The statistical data are based on different sour­

ces. The most important are: German Minister of Transport: Verkehr in Zahlen, Bonn 1986; Statisti­

sches Jahrbuch der Bundesrepublik Deutschland, different editions. Wiesbaden: Statistisches Bun­

desamt; Statistische Mitteilungen des Kraftfahrt- bundesamtes, 1987. Bestand an schadstoffreduzier­

ten Personenkraftwagen. Heft 8, 04.09.1987; Ver­

band der Autoraobilindustrie e.V. (VDA) (ed.). Auto 83/84 et al. Jahresberichte). Frankfurt a. M. and ADAC, 1988. Auto'88. München:ADAC-Verlag GmbH.

See "Der Spiegel", No. 33, 1988, p. 71.

The total amount of debts of the German railway system was DM 40,8 billions in 1987. It is estimated that the debt will grow up to DM 57,1 billions 1992.— This is due mainly to the fact that transportation of goods and products is increasingly done by lorries. On one hand, this is also a consequence of the decline of the coal and steel industry. New industries do not have such much huge uniform masses of raw materials or products for transport. On the other hand, the subsidizing of road construction and car traffic by the state will drive the railway-system in the long run into ruin.

Legislation of the European Community, in addition, will probably favour lorry transport in the name of free competition: "So far the number of lorry transport companies is restricted through a authoritative permit system (in Germany, H.S.). This system will be abol­

ished within a few years (through the completion of the internal market, H.S.). The competition in (at low-cost operating H.S.) Netherlands, Belgium, or Italian lorry transport companies will cost the railway system ...

one billion DM a year." It is estimated that the "real"

costs of car traffic - motorway construction, environ­

mental damages, costs of fatal and non-fatal accidents - are considerably higher than the costs for the rail­

way-system. —

See Wolf, W. , 1987. Auf der Fahrt in die totale Autogesellschaft: Zehn Thesen zum Transport von Menschen und Gütern auf Straße und Schiene. In:

Gewerkschaftliche Monatshefte. 10/1987, p. 598 - 609.

For a comparison between car traffic and railway- system concerning the effective costs for the so­

ciety see W. Wolf, 1986. Eisenbahn und Autowahn, Heidelberg. Concerning the social costs see also above.

15

As a result of this development, the situation in the villages and cities— became difficult, especially at the end of the 1970s. Particularly in the inner cities of the major urban agglomerations like Frankfurt, Mu­

nich or Hamburg, it became increasingly strenuous to use the car in an efficient way. Nevertheless, there was still room for improvements. As a result, in the 1970s important efforts were undertaken to adapt the traffic infrastructure to the needs of individual car traffic as far as possible. Improvements were searched and found only to allow an increasing number of cars to run. One of the catchwords of city planners and politi­

cians in the 1960s and 1970s had been the "Autogerechte Stadt" (optimal car adapted city). That is by using all means of adaptation, cities should improve their capac­

ity to handle the problem of car traffic without intro­

ducing any more stringent restrictions.

Particularly the larger agglomerations and communities - widely destroyed during the war - deprived of possibilities to act because planners were not yet con­

vinced by the need to conserve old urban structures.

Basically therefore the problems of growing car traffic rested unsolved until today. Fundamental solutions had been postponed, even if some betterments had to be in­

troduced. Such betterments were for example: broadening of roads for avoiding accidents, installation of so- called "Abbiegespuren" (turning traces), creation of urban motorways (Stadtautobahnen) to separate traffic and foot-passengers.

Ironically, motor traffic showed a tendency to collapse caused by congestion, quite contrary to the original

See, i.e., the city of Berlin (West): Der Senator für Stadtentwicklung und Umweltschutz (ed.), 1984 and 1981. Emissionskataster Kraftfahrzeugverkehr für das Belastungsgebiet Berlin.

16

intentions of unlimited freedom to move anywhere any time. As one observer put is:

"The conventional approach to the conges­

tion problem has led to a vicious circle:

Building more roads simply attracts more cars, thus increasing the pressure for still more roads. In Southern California, where there are probably more miles of freeways than anywhere else in the world and where daily commutes of 40 miles are not uncommon, the average travel speed is no higher than 33 MPH. It is expected to drop to 15 MPH by 2000, as population and car ownership continue to grow rapidly.

In the FRG, the number of fatal accidents had grown up to 19,000 in the year 1970, but from that time onwards went down to 9,000 in 1985 and rose again up to 11,000

1987. In 1988, a drastic increase of fatal accidents is ahead again because the effects of improvements like more and broader roads and more effective regulation of traffic are "consumed". On the other hand, congestion and speed have increased remarkably again. So, a number of about 12,000 fatal accidents seems to be probable in 1988. —

See Renner, op. cit., p. 47.

See Minister of Transport 1985, Bonn, p. 263. Con­

cerning the debate on speed limit and traffic ac­

cidents, compare: ADAC, 1986. Argumente und Doku­

mente des ADAC gegen Tempo 100 auf Autobahnen;

Teufel, D., 1988. Versäumnisse der Bundesregie­

rung. In: ZAU, Vol. 1, 1988, No. 1; Schuh, H. , 1987. Wenn der Nebel wieder steigt... Mit Sperren und Strafen gegen Massenkarambolagen. In: Die Zeit. No. 47, 13.11.87, p. 81; Flade, A. , 1987.

Jeder gegen jeden? Unfälle, Fahrverhalten, VerkehrtsSicherheit, Fahrmotive. In: Gewerkschaft­

liche Monatshefte. 10/1987, p. 610 - 618; TÜV Rheinland (ed.), 1985. Abgas-Emissionsszenario für den PKW-Verkehr in der Bundesrepublik Deutschland unter Berücksichtigung der Beschlüsse der EG- Umweltmininsterkonferenz. Köln; Vereinigung der Technischen Überwachungsvereine (ed.), 1985. Groß­

versuch zur Untersuchung der Auswirkungen einer

The number of fatal accidents still being very high, there were some other serious disadvantages, too:

first, the increase of car emissions; There has been an increase from 1954 to 1986 of N0x emissions from 0,25 millions of tons to 1,7 millions per year. 75 per cent out of this

figure came form motor traffic. —

Second, the creation of noise; more than 50 per cent of the population feel heavily dis­

turbed by traffic noise. Health damages as well as problems of concentrations, disruption of working capabilities, derangements of sleep have been proved by medical researchers. —

third, the stress for the drivers.—

As time passed by and the infrastructural damages of the Second World War were restored, the German society became gradually aware of these problems. At the end of

Geschwindigkeitsbegrenzung auf das Abgas-Emissi- onsverhalten von Personenkraftwagen auf Au­

tobahnen. Abgas-Großversuch. Kurzbericht. Essen;

Werbeanzeige "Vom Porschefahren". InsDer Spiegel.

No. 44/1986, p. 221.

See IFEU-Institute Heidelberg 1985, p. 5,6. See also TÜV Rheinland, 1985, Abgasemissionsszenario, op. cit.; Institut für Energie- und Umwelt­

forschung (ed.), 1985. Die Entwicklung der Schad­

stof f emission aus dem Kfz-Verkehr. Eine Bilanz der Auswirkungen der EG-Beschlüsse und der steuer­

lichen Anreize zum schadstoffarmen PKW. Heidelberg and Southworth, B.W., 1979. Optimal Automobile Emission Control: A Houshold Utility Model. In:

Socio-Economic Planning Sciences. No. 13. 1979, p.

313 - 319.

See Handbuch der Bundesrepublik Deutschland, 1986/87, chapter on "traffic", p. 185-190, Munich 1986.

See F. Vester, p. 192-198.

the 1970s, the environmental awareness reached a first height; different groups within society called for action and reform of the transport system. Furthermore, after the first oil price hike of 1973, when petrol prices increased four times, the necessity of saving energy, became increasingly clear. Moreover, the appearance of severe forest damages in the 80s forced the politicians to pay more attention to the environmental issue. After the inauguration of the Green party in 1983 in the German parliament (the Bundestag), the government had to react and to act in favour of the environment.

It has been the ambition of the car manufacturing industry in Europe since 1973 to reduce fuel consump­

tion and save energy. However, both industry and gov­

ernment were interested rather in the economic aspect of saving energy, while the benefit for the environment was rather indirect and not the primary objective. This aspect, by contrast, became more and more important since the beginning of the 1980s. Starting in the early 1970s, engineers developed highly compressed combustion engines; motors became increasingly knockproof and consumed primarily super gasoline.— As a result, the performance of motors grew notably in relation to their weight. Less fuel, either super or regular gasoline, was needed, while the weight of cars was reduced, too.

As a consequence, cars increased their potential to reach high speeds.

See the Annual Reports of Volkswagen, Daimler- Benz, Ford, Opel, BMW and FIAT. For energy saving through reduced fuel consumption in general see Informationsdienst des Instituts der deutschen Wirtschaft, 1986. Tank reicht 150 km weiter. Ins

IWD, Jahrgang 12, No. 45, p. 1 and Verband der Au­

tomobilindustrie e.V. (VDA) (ed.), 1986. Fort­

schritte bei der Kraftstoffeinsparung im Zeitraum 1978 - 1985. Frankfurt a. M.

So, the improvements in motor performance, road con­

struction and security precautions which took place in the 1960s and 1970s eventually opened the door for the use of a growing number of cars and for driving at a higher speed. (See above) Consequently, the number of fatal accidents had been growing again. Additionally, the problem of car-caused pollution could no longer be ignored. Higher speed led also to an increase of pollu­

tion caused by cars, particularly to an increase of N0x- emissions.

In the beginning of the 1980s, more stringent action was demanded by the public and the political parties.

Attitudes had changed, too, costs for environmental protection were more and more accepted in the FRG, whereas in the 1960s and 1970s industry and government could afford to ignore the needs of the environment by stressing the financial problems. —

Even a majority of car owners demanded for action to save the forests. Restrictions in favour of the envi­

ronment seemed to be acceptable, as inquiries showed.

In 1983, the German Car Club (ADAC) made a representative inquiry among the car owners and asked them if they would be ready to pay more for their cars in favour of the environment. More than 70 per cent an­

swered that they would accept an increase of car prices

Also the industry became aware of the changing at­

titudes in Germany. See for more detail Kuhlmann, A., 1988. Auf dem Weg zum umweltschonenden Auto.

In: ZAU, Vol. 1, 1988, No. 1; Christ, H . , 1984.

Die Umweltverantwortung der Automobilindustrie.

In: Zeitschrift für Umweltpolitik. No. 1/84, 7.

Jahrgang, p. 1 - 1 4 ; Institut der deutschen Wirt­

schaft, 1987. Vorfahrt für die Umwelt. No. 43, 22.10.87, p. 43 and Kuhlmann, A . , 1984. Auto und Umwelt bis 2000. Berlin.

of 10-15 per cent, if car emissions would be reduced efficiently. —

The technology of catalytic converters was thought to be the only method that promised quick results in re­

ducing the car-caused pollution. Favourably, several European and particularly German car manufacturers could even rely on experiences from the American and Japanese markets. For these reasons, the Minister of Interior (responsible for the environment in the FRG at the time),— proposed in 1983 to adopt the stringent American standards for car emissions (or standards that are of the same effectiveness as the U.S.-standards) in Europe from January 1986 onwards.

However, this move could not be more than a proposal, because the FRG has no longer the right to set its own emission standards. This is because that no restriction can be imposed which hinders the free circulation of goods and products within the European Community (EC).

The federal government although had the option to im­

pose the strictest emission-standards for the domestic car industry. (There is a possibility of stricter regu­

lations inside the borders of one country if the for­

eign importers are not concerned by these measures). —

See ADAC 1985, p. 34.

In 1983 there was no Ministery of Environment in the FRG. It was after the catastrophe of Chernobyl that the federal government decided to establish an idependent environmental ministry.

It is an academic but interesting question what could have happened in this case in 1985. For a comparison: the producers of beer do not suffer from the foreign competition after the opening of the German market, the "high standard" caused by the "Reinheitsgebot" (clean brewing law) of German beer is widely accepted as a sign of quality and people rather prefer to pay more than to consume

All questions concerning inter-European competition must be regulated by the EC and its institutions, in this case by the Council of Ministers. The French car industry particularly was strictly against any tighten­

ing of the existing European emission standards and was against an adoption of American standards. In France, the impression was widespread that the German demand for stricter standards was only a manoeuvre for getting advantages in competition.

Within the EC, a acceptable compromise had to be found acceptable for all diverging interests. Other European countries not belonging to the European Community (Austria, Switzerland, Sweden, Norway) are more inde­

pendent in this respect. They concluded finally to adopt the U.S.-standards for themselves. —

At last, the "Luxemburg Compromise" of June 1985 de­

manded the installation of a closed 3-way-catalyst for cars with a cylinder capacity of more than 2000 cc.—

cheaper foreign beer which may be brewed not as

"clean" as the German beer.

See M. P. Walsh, Motor Vehicle Air Control in Eu­

rope: An Overview. In: The Environmental Bureau in Association with Friends of the Earth, Report of the International Seminar: The Clean Car, A Chal­

lenge for Europe, p. 19.

Concerning the discussion on the EC level see for more detail and critical comments Schärer, B., 1984. Abgaskatalysator - Ein schwacher EG-Kompro- miß. In: Umweltmagazin. Mai 1985, p. 24 - 26; Bil- land, F., 1984. Der Kraftfahrzeugmarkt der EG im Spannungsfeld zwischen binnenwirtschaftlicher und weltwirtschaftlicher Integration. Göttingen; Com­

mittee of Common Market Automobile Constructers (ed.), 1987. Impact of more Stringent Emissions Standards on Vehicles with Engine Desplacement be­

low 1.4. L. Brusseies; Europäische Gemeinschaften (ed.), 1981. Die Europäische Autoindustrie. Stel­

lungnahme der Kommission. In: Bulletin der Eu­

ropäischen Gemeinschaften. Beilage 2/81; Europäis­

ches Parlament Sitzungsdokumente, 1983. Bericht im

The emissions standards for smaller cars were so low that in the categories below 2000 cc it was easy for car manufacturers to meet the standards without in­

stalling catalysts.

A second stage for standards, following the "Luxemburg Compromise", has been taken in view. From 1991 onwards, standards should be tightened again. The problem with Diesel-cars rested unresolved. Diesel-cars can keep the given standards easily; they emit little CO, HC and N0x.

For this reason, they were even classified as "low emission engines" and fiscal privileges were guarantied similar to those cars with regular gasoline engines, despite the fact that they emit special Diesel-particu­

lates that may pose danger to human health and that this should not be ignored. In the "Luxemburg Compro­

mise" this problem had been excluded. Emission stan­

dards for Diesel particulates must be found as soon as possible to avoid those health damages. Drivers too, should have a right to be informed correctly about the environmental disadvantages of cars. Meanwhile the mar­

ket share of Diesel cars has increased dramatically. In

Namen des Ausschusses für Umweltfragen, Volksge­

sundheit und Verbraucherschütz zum Bleigehalt im Benzin. No. 1 - 279/83; European Report, 1988.

Cars: European Manufactorers up in Arms over Ger­

man Lander Smog Controls. No. 1380, 13.02.1988;

Herald Tribune, 1988. In EC, Outlook on Car Pollu­

tion Remains Murky. 29.01.1988; Heuser, U . , 1988.

Unheimliche Begegnung der europäischen Art. In:

Die Zeit. No. 31, 29.07.1988, p. 22; Kommission der Europäischen Gemeinschaften (ed.), 1984.

Schadstoffemissionen von Kraftfahrzeugen. Festle­

gung der Grenzwerte für 1995. Brüssel; EG Kommis­

sion der Europäischen Gemeinschaften, 1985. Vor­

schlag für eine Richtlinie des Rates zur Änderung der Richtlinie 70/220/EWG zur Angleichung der Rechtsvorschriften der Mitgliedstaaten über Maß­

nahmen gegen die Verunreinigung der Luft durch Ab­

gase von Kraftfahrzeugen mit Fremdzündung. Brus­

sels .

Germany it rose from 18 per cent in 1984 before the

"Luxemburg Compromise" (1984) to 30 per cent in 1987.

After this overview on the development of the car in­

dustry in the FRG, we will now focus on the German car market itself.

2.1____ The German Car Market

In the German car industry, the main manufacturers are the following:

1. The Daimler-Benz group♦ In 1987 it reached the third position in the German car market and sold 303,000 cars, which is equivalent to 10.7 per cent of the market share. Daimler-Benz, being the biggest concerning total returns, is considered as the largest trust today in the FRG.

2. The Volkswagen-Audi group. This is a company traditionally strongly rooted in the German market. After Volkswagen bought the Spanish See Walsh, ibid. , p. 24. Fiscal privileges for Diesels were limited temporarily (depending on the engine capacity) from 1. 1. 1986 onwards. The pri­

vileges normally are in force not longer than from 1. 1. 1986 to 31. 12. 1988. For that reason, the selling of Diesels decreases nowadays remarkably.

Concerning the Environmental problems of Diesel cars in general see ADAC Motorwelt, 1986. Jetzt ist der Diesel fällig. No. 9/86, p. 44-50; Der Bundesminister für Forschung und Technologie (ed.), 1988. Forschungsergebnisse. Entwicklung ei­

nes neuartigen Dieselmotors mit geringen Schad­

stoffemissionen. Bonn; Die Welt, 1988. Daimler macht sich für Diesel stark. No. 203, 31.08.1988, p. 13; Niederle, W . , 1988. Schadstoffbegrenzung bei Dieselmotoren. Fahrzeugtechnische Möglichkei­

ten. Wien: Institut für Wirtschaft und Umwelt des Österreichischen Arbeiterkammertages.

SEAT-Group — it became the fourth manufac­

turer in the world market. Its nationwide mar­

ket share was 28,6 per cent in 1987, which is equivalent to 810,000 sold cars.

3. The Opel group. This is a German branch of General Motors. Its market share was 13,9 per cent in 1987, which is equivalent to 420,000 sold cars.

4. The Ford group. Its market share reached 10.5 per cent in 1987, which is equivalent to

297,000 sold cars.

5. BMW (Bayerische Motorenwerke) - the Bavarian Motor Company. Its market share was 5.7 per cent in 1987, which is equivalent to 161,000 cars.

6. The FIAT group. An Italian company, it is one of the most important contenders in the German market. Its market share was about 4.5 per cent in the year 1987. We will analyze FIAT as an example for a foreign importer on the Ger­

man car market.

In 1987, about 30 per cent of the passenger cars sold in Germany were imported, particularly from Japan (14 per cent), France (7,5 per cent) and Italy (4,9 per cent).

The following Table 1 shows the development of the Ger­

man car industry since 1965.

See Volkswagen AG, Geschäftsbericht 1986, Wolfs­

burg , p . 8 .

30

Table 1: Development of the car business in the FRG (passenger cars)

T o ta l pro­

d uction

Domestic r e g i s t r a ­

tio n

Share of world pro­

duction

Share of ex p o rta ­ tio n

1965 2,8 m illio n 1,8 m illio n 14,22 51,92

1970 3,5 " 2,0 " 15,62 55,22

1975 2 ,8 " 2,3 " 11,51 50,82

1980 3,9 ■ 2,5 " 12, OX 53,22

1982 3 ,5 " 2 ,2 " 13,82 58,32

1983 3,7 " 2,4 " 12,82 56,42

1984 3 ,8 " 2,4 " 12,22 58,92

1985 3,8 " 2,4 " 12,72 61,62

1986 4,1 " 2,8 " 12,92 58,52

1987 4,1 " 2,5 " 12,82 58,62

Source: Daimler Benz AG, G esc h äftsb e rich t 1987j S t a ti s tis c h e s Jahrbuch d er Bundesrepublik Deutschland, d if f e r e n t e d itio n s

The German car industry in both the internal and inter­

national markets^! is the "strongest" among the other European competitors; Some 60 per cent of the cars man­

ufactured in Germany are exported. The car industry is one of the most important industries in Germany. Public relation of the enterprises tries to give the impres-

We will not discuss the international markets in this study; for more details, sees Verband der Au­

tomobilindustrie e.V. (VDA) (ed.). Auto 83/84.

Jahresbericht. Frankfurt a. M . ; Altshuler, A. et.

al., 1984. The Future of the Automobile. London;

Chanaron, J.J., 1985. Le Systeme automobile fran- cais. de la sous-traitance au partenariat? fila­

ments d'une problömatique. Paris; Habbel, W . , 1985. Die deutsche Automobilindustrie und der Weltmarkt; Hunker, J.A., 1984. Structural Change in the U.S. Automobile Industry. Mas- sachusetts/Toronto: Lexington Books; Motor Vehicle Manufacturers Association (ed.), 1985. MVMA Motor Vehicle. Facts & Figures '85. Detroit; Motor Vehi­

cle Manufacturers Association (ed.), 1985. MVMA Data Digest Relating to Motor Vehicles and Public Policy Issues, 1985. Washington DC.; Schnell, U., 1981. Die internationale Wettbewerbsfähigkeit der deutschen Automobilindustrie. Bonn.

sion to have the "leading position" in car production in the world; the enterprises are aware of their impor­

tance for the economic and social well-being of the FRG.—

Figure 1 shows the development of production of the ma­

jor German car companies:

See Diekmann, A., 1975. Die Automobilnachfrage als als Konjunktur- und Wachstumsfaktor. Eine Input- Output-Studie. Tübingen; Fünzigste Internationale Automobilaustellung, 1983. Das Auto - Motor un­

serer Zeit. Frankfurt a. M. and Eymüller, H.B., 1977. Die Automobilindustrie in der BRD. Frankfurt a. M.

Figure 1: Returns of the main car producing groups during the last 10 years (in billions of DM)

70

d 65

60 55

dv v 50

45 dv

d v 40

35 30 25

dv

vd

dv v d

dv dv

20 15 10

£

o obf ob

o f fb ofb of o f o f of of b

b b b b b

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

Legende! v: VWj d: Daimlerj f : Ford; os Opel) b! BMW.

Source 8 G esc h äftsb e rich te o f th e e n te r p r is e s in v e s­

tig a te d .

The car industry is one of the biggest employers in the FRG. It is estimated that about 18 per cent of about 25 million jobs in Germany are directly or indirectly de­

pendent on the car industry - either in the car indus­

try itself or in the supplying industry. This means em­

ployment of about 3-4 million people. —

World car production in 1987 reached 37 million cars.

In the FRG some 4.1 million were produced, which is

33 See W. Wolf, op. cit. , p. 187.

equivalent to a share of 12.8 per cent. Western Europe topped car production (11 million), followed by the U.S.A. (8 million cars) and Japan (7,6 million)— . This means that that there will be in the future three main competing groups:

1. the European car industry with the German, Italian, French and Scandinavian producers;

2. the American producers with Chrysler, Ford and G.M. ; and

3. the Japanese and other Asian producers like South Korea. —

If the main car markets in the world are taken into consideration from an environmental perspective, it may be pointed out that among the west European countries the variability of regulations was always remarkable, both in environmental and other respects. In effect, the "Luxemburg Compromise" was also an effort to get some unification. Emissions standards for cars in the

See BMW, Geschäftbericht 1987, p. 8.

We will not discuss the "Asian Challenge" in this study; for more detail, see: Becker, H., 1987.

Hyundai gegen Honda. In: Die Zeit. No. 12, 13.03.87, p. 32; Becker, H . , 1987. Kasse statt Masse. Die Japaner wollen mit Luxuswagen ihre Krise meistern. In: Die Zeit. No. 44, 23.10.87, p.

48; Comitä des constructeurs d'automobiles du mar- che commun(CCMC)/comit6 de liaison de la con­

struction Automobile (CLCA) (ed.), 1986. Le Defi Japonais. Brüssel; Hanaeda, M. , 1982. Der Handel­

skonflikt zwischen Japan und den EG-Staaten. Das Beispiel der Automobilindustrie. München; Meyer- Larsen (ed.), 1981. Autogroßmacht Japan. Reinbeck;

Sengös, G. , 1986. L'automobile europöene confron­

t s ä la double offensive amöricaine et japonaise.

In: Transports. No. 317, September 1986, p. 383 - 392.

western world are nowhere so lenient like in the EC, because so many diverging interests have to be unified.

From 1978 to 1985, the German export of cars rose from 2.1 to 3.1 millions. 50 per cent of the total exports went to the other EC-countries, 15 per cent went to the rest of Europe, 10 per cent to the U.S., and 25 per cent to the rest of the world, particularly to the richer countries of the third world like the oil-pro­

ducers .

Concerning the domestic market, there has been some boom in the last 5 years. In 1987 as in 1986, more than

3.1 millions of new cars have been registered. The mar­

ket-value of all new cars registered from the central car authority (Kraftfahrzeugbundesamt) was roughly DM 12.31 billions. Total exports were about DM 43.3 bil­

lions .

Some more detailed information regarding every impor­

tant group of producer will be provided in separate case studies.

2.2 ____ Fiscal Incentives and the "Luxemburg Compromise"

In the FRG, fiscal incentives have been established di­

rectly after the "Luxemburg Compromise" in June 1985.

The European law forbids any discrimination of foreign competitors in the European Community.— This means that fiscal incentives can be granted only as far as the "natural" disadvantages of low-emission-engine cars are eliminated.

See Steindorff, p. 770; see von der Groeben, pp.

53.

36

Closed 3-way-catalyst cars are somewhat more expensive than cars without catalysts. This means that someone who wants to buy a catalyst car has to pay between DM 500 and 1500 more than for a non-catalytic car. Fur­

ther, there are cheaper versions of catalysts, particu­

larly the simple catalytic converter without electroni­

cally regulated lambda-sonde. The plain production- costs even of a closed 3-way-catalyst are about DM 300.

In the FRG, it becomes increasingly difficult to know the exact price difference between a car with and with­

out catalytic converter because non-low-emission-engine cars vanish rapidly. FIAT and Daimler-Benz (Mercedes) for example offer only low-emission cars. Cars without catalyst (but still "low-emission-cars" in this cate­

gory) can be found only in the class under 1400 cc cylinder capacity. In this group of cars, on the other hand, can hardly catalyst cars be found. Under 1400 cc, European standards for car emission are so low that they can be fulfilled without any catalyst.

Within the EC it is not allowed to provide fiscal in­

centives to car producers that make catalyst cars less expensive than others. For example, any direct subsidy of catalyst cars would be recognized as an unjustified discrimination of other (foreign) competitors. In the basic treaty of the European Community (the so called

"Treaty of Rome"), Article 30 states that any restric-

< tion of the "free circulation of products" (Freiheit des Warenverkehrs) is forbidden. In article 36 some ex­

ceptions are stated: measures can be taken in favour of the protection and health of human life, of animals and plants and for the reasons of order and security.

It has been argued that the protection of the environ­

ment could be such an exception and that this must have a higher priority than the free circulation of prod-

ucts.— So, it was said by the German Minister of Inte­

rior (then responsible for environmental questions) that even a separate German tightening of car emission standards - against the veto of the other states of the community, would be justified. If this shall be ac­

cepted as a correct interpretation of the European law (in accordance with the law of the European Community), two preconditions have to be fulfilled: first, the planned measure has to be necessary ("Erforderlichkeit") and second, there has to be a lack of regulation within the community ("Fehlen einer gemeinschaftlichen Regelung").

The Necessity of a measure: Something is necessary only if it cannot be reached otherwise, without imposing deep restrictions. The objective of the German initia­

tive was the reduction of emissions. But it has been planned to reach this objective by imposing restric­

tions for the car industry. It would have been possible (and is still) to make an important step in this direc­

tion by imposing a speed limit. This is a very simple measure, already been taken by all other European coun­

tries - that does not touch the free circulation of products. It could therefore be expected that the court of the European Community would have argued that this measure could be taken first before imposing restric­

tions on the free circulation of products.

Even concerning the fiscal incentives for the consumers - buyers of new cars, there is some risk of a court procedure before the court of the European Community.

Article 92 of the "Treaty of Rome" points out that any subsidy, aids or grants which violate the free competi-

For further examination of the European law (and a juridical argumentation), see for example G. von der Groeben, p. 53.

37

tion, are not allowed.— The federal government would have to explain that such incentives are only a compen­

sation for some additional costs for low-emission-cars and would have no influence on the competition between the car producing countries.

The system of fiscal incentives in the FRG is rather complicated and based on the separation of two classes of carss 1) so-called "conditioned-low-emission-cars"

(bedingt Schadstoffarm), which fulfil the European standards but have normally no closed 3-way-catalyst and 2) the so-called "low-emission-cars", with closed 3-way-catalyst. The so-called "conditioned-low-emis­

sion-cars" are further subdivided into three groups: A, B, and C. If a car fulfils the conditions of the Euro­

pean emission-test-modus^ and meets the European emis­

sions standards, there is a corresponding reduction in car tax. Generally, authorities count from a base of DM 14.40 a year for every 100 cc cylinder capacity. This means, for example, that for a 1200 cc cylinder car (12x14.40) DM 172.80 tax has to be paid (before the

"Luxemburg Compromise"). After this compromise, a low- emission-car qualified for a tax reduction costing DM 1.20 less per 100 cc cylinder capacity means (12x14.40- 1.20) DM 148.40 tax a year.

A short overview concerning the problems of free­

dom of competition and environmental protection within the law of the European Community from a juridical point is to be found in P. Steindorff, Umweltschutz in Gemeinschaftshand? Recht der in­

ternationalen Wirtschaft, Nr. 30, 1984, S. 767- 772.

The European emission modus or test cycle is in several aspects different from the American method of verifying the emissions of cars. Mainly, the speed in the European test is lower (50 km/h in­

stead of 91); this leads to a reduced emission of NO . Effectively, on the motor roads drivers speed up more than 50 km/h. Further details are ex­

plained in the next chapter.

After a certain period of time (between 3 and 6 years), depending on the cylinder capacity and the class of conditioned emission reduction, tax reduction no longer applies. But with a closed 3-way-catalyst car, there is a total elimination of car tax for 3, 4 or even 6 years. After this time, the tax rate is reduced further at a level of DM 13.20 per 0.11 cylinder capacity for a 3-way-catalyst-car.

Regarding the other group of "conditioned low-emission- cars", the owner of a car without 3-way-catalyst after the reduction phase , has to pay DM 21.60 for every 100 cc cylinder capacity again.

On the other hand, if somebody wants to buy a non-low- emission-car, car tax is increased from DM 14.40 per 100 cc cylinder capacity to DM 21.60. This means, that for a 1200 cc car (12x21.60) DM 259,20 tax is added a year (instead of DM 148,40 for a conditioned-low-emis­

sion car) .—

The special reduction of DM 1,20 per 100 cc cylinder capacity is also granted for Diesel cars, because they fulfil the emissions standards of the European test cycle. A big part of them is even classified as "low- emission" and therefore free from car taxes for 2 or 3 years.

2.3____ Different Standards in Different Markets

Austria, Switzerland and Sweden do not belong to the European Community and can therefore impose car emis­

sion standards without regard to institutional restric­

tions like the members of the EC. Members of this group

40 See ADAC, Bibliography, p. 24.

have decided to adopt the American emissions standards and even the emission-measuring test cycle utilized in the U.S.A. This cycle is probably more appropriate than the European test, because, as noted above, emissions particularly of N0x increase progressively at high speed, whereas the European test cycle has no such phase of high speed. The European test cycle do not register correctly the emissions of N0x because there is no test phase with high speed - when the highest emis­

sions of NO can be found.—X

The test cycle applied in the countries of the EC was developed by the Economic Commission of Europe. There are three basic test methodss namely, the European test, the American test, developed and applied in the U.S.A. and the Japanese test cycle. In reality, several variations of these basic models can be found, one variation of the American test can be found in Sweden, another in Switzerland.— Several justifications are given concerning the necessity of all these variations.

It was pointed out that the American test method is not adequate to the conditions on European roads. Road traffic in Europe is much more dense than in the U.S.A.

There are many more phases of "stop and go". Also it can be taken as a matter of principle, to have a dif­

ferent "own" European test cycle.— Some informations about the different test methods can be found in the following table:

Ibid. , p. 32.

See J. Eberspächer, Abgasreinigung, Katalysator, Rußfilter, Esslingen 1986, p. 9

It was strictly the opinion of the French car in­

dustry not to adopt the American test cycle for these principal reasons. See J. Lambert, Y. Geor- giades, Les anticipations des constructeurs d'cars. Lyon, p. 7.

Table 2: Overview of the several test cycles for the verification of automobile emissions

Type Country le n g th of how o fte n how long how f a s t r a t e of

o f t e s t th e t e s t (m inutes) 0 / max. I d le motion

km/h

FTP 75 U.S.A, Canada 17,8 km 1 tim e(8) 41 34 91 1 8 ,4Z

FTP 72 Sweden, Swit-

zerland 12,1 " 1 " 23 32 91 17,9"

10-mode Japan 0,7 " 6 " 13,5 18 40 26,7"

11-mode Japan 1,0 " 4 " 8 31 60 21,7"

ECE Europe 1.0 4 " 13 19 50 3 0 ,8Z

Source: J . Eberspächer, 1986, p. 9.

There are various reasons for these variations of test cycles, as mentioned above. Technically, the car indus­

try in the FRG could accept any test cycle. But the German car manufactures have some knowledge about the American test cycle because of German exports to the U.S.A.; the German car industry in general is therefore well adopted to the American standards

We have asked our interview-partners in the car indus­

try, if there are problems concerning the exports into these countries. Particularly among those who export into the U.S.A. the response has been that there are no major problems. But for Europe, after the "Luxemburg Compromise" there were some losses, because standards were not absolutely identical between the European states and the U.S.A. To fulfil these prescriptions and to meet the emissions standards, among other things, the engines had to be adapted.

But there were no fundamental export losses except at Ford. As a widely independent enterprise, Ford as a Eu­

ropean firm that does not export into the U.S.A. had not much experience with the catalyst-technology. For the reason of lack of preparation Ford lost, after the