Transportation and Communication

According to Global Insight, global passenger car production in 2007 rose to 52.1 million units from 49.1 million the previous year.¹ In addition, production of "light trucks" ran to 18.9 million, up from 17.9 million in 2006, for a combined total of 74.1 million.² Global Insight projects 2008 total production to reach 75.8 million.³ (See Figure 1.) Including unused production capacity, the world's auto companies are capable of churning out some 84 million vehicles per year. PricewaterhouseCoopers projects that by 2015 worldwide capacity to grow to 97 million units.⁴

Japan produced the most vehicles in 2007, 11 million, closely followed by the United States with 10.5 million.⁵ China's production continues to surge, reaching 8.1 million vehicles in 2007. Projected 2008 output of 9.3 million would bring it almost to a par with the United States, whose production is expected to decline to 9.5 million units.⁶ The next largest producers are Germany (6 million) and South Korea (4 million).⁷ (See Figure 2.) France, Spain, Brazil, Canada, and Mexico each produced between 2 million and 3 million units.⁸ At 1.95 million vehicles, India is close to joining the top 10.⁹

The world's fleet of passenger vehicles is now an estimated 622 million, up from 500 million in 2000 and a mere 53 million in 1950.¹⁰ China continues to expand not only its production but also its domestic car ownership. There are now an estimated 43-47 million vehicles on the road there-about as many as the United States had in 1947.¹¹ India's love affair with the automobile is taking off too. And when the country's Tata Motors unveiled the "Nano" in 2008-a no-frills vehicle advertised as the world's cheapest car-it made a splash around the world.¹²

The transport sector, which relies heavily on cars and trucks for freight movement, is responsible for about a quarter of the world's energy use and has the fastest-rising carbon emissions of any economic sector.¹³ Road transport cur­rently accounts for 74 percent of the world's total transport-related carbon dioxide (CO₂) emissions.¹⁴

Improved fuel economy not only limits energy consumption but translates directly into reduced emissions of carbon dioxide. It can also help reduce air pollution from vehicles, although fuel economy and lower emissions of sulfur and nitrogen oxides or particulate matter do not necessarily go hand in hand.¹⁵ Lowering air pollution depends on both improvements in engine technology and the production of cleaner fuels (especially those with lower sulfur content). Japan and the United States, followed by the European Union, have the most stringent emission limits.¹⁶ China and India are introducing regulations that follow those of the Euro­pean Union, though with a time lag of several years.¹⁷

Hybrid vehicles are generally seen as a key means to achieve higher fuel efficiency, although this technology can be equally applied to boost acceleration and horsepower. In 2007, a total of 541,000 hybrids were produced.¹⁸ Pricewater­houseCoopers projects that by 2015 some 2.2 million of these vehicles might be produced.¹⁹

Toyota, the company that popularized such cars with the introduction of the Prius in 1997, in 2007 reached the milestone of a cumulative 1 million hybrids produced.²⁰ The company sold half of these vehicles in the United States, where it commands a cumulative 73-percent share of the hybrid market.²¹ All in all, 2.2 percent of U.S. light-duty vehicle sales were hybrids in the 2007 model year.²² By 2015, hybrids might reach a U.S. market share of anywhere between 5 and 11 percent.²³ In Japan, car companies sold close to 89,000 hybrid passenger vehicles in 2006, for 1.6 percent of all cars sold.²⁴

European countries have embraced diesel-powered cars (which account for 50 percent of total sales there), since diesels consume 30 percent less fuel than gasoline engines and emit 25 percent less CO₂.²⁵ Worldwide, demand for diesel-powered light vehicles is projected to increase from 16 million in 2007 to 29 million in 2017, resulting in an increase in market share from a current 23.6 percent to 31.5 percent.²⁶ Evolving engine technology and cleaner fuels have rendered diesel passenger cars substan­tially cleaner than in the past, especially with regard to sulfur dioxide emissions. However, they still emit far more nitrogen oxides and particulate matter than cars that use gasoline do.²⁷

A 2007 report by the International Council on Clean Transportation concludes that Japanese and European factories produce the most-efficient vehicles available today, with new passenger vehicles scoring roughly 40 miles per gallon (mpg) on average.²⁸ The United States is at the bottom of this international ranking, while countries like China, Canada, and Australia are in between and working to increase efficiency in coming years.²⁹

In 1998, European, Japanese, and South Korean companies selling vehicles in Europe entered into a voluntary agreement with the European Commission to lower the amount of carbon emitted by new passenger cars.³⁰ The goal was to reduce the 1995 level of 186 grams of CO₂ per kilometer to 140 grams by 2008/2009.31 According to Commission reports, just over 26 percent of European-produced vehicles met the goal in 2004.³² For Japanese- and Korean-made cars sold in the European Union, the numbers were 21 and 29 percent, respectively.³³ Because cars have become heavier and more muscular, the industry is not expected to achieve its voluntary aim. In response, the European Commission adopted a proposal forcing manufacturers to produce cars that emit 130 grams per kilometer by 2012 and said it would present further measures in pursuit of a goal of 120 grams.³⁴

The United States has scorned higher fuel efficiency for more than two decades.³⁵ Following the first oil crisis of the early 1970s, sales of the biggest gas-guzzlers-those achieving 15 mpg or less-declined dramatically, from 67 percent of sales in model year 1975 to just 4.5 percent in 1982.³⁶ (See Figure 3.) But the bulk of vehicle sales remains in the interval between 15 and 25 mpg, and the recent popularity of SUVs has even led to reversals of fuel economy gains.³⁷ Just 1.2 percent of all U.S. light vehicles in the 2007 model year could be categorized as truly fuel-efficient-that is, achieving at least 35 miles per gallon, and thus roughly on a par with European carbon limits.38 On average, new U.S. cars in 2007 emitted about 180 grams of carbon per kilometer.³⁹

Leadership in pursuing fuel economy and reducing carbon emissions is essential if the industry is to avoid a head-on collision with climate stability. The motor vehicle industry is a cornerstone of modern economies and an important source of jobs. But a relatively small share of the industry's current output-and thus its employment base-can be considered sustainable. Using the 120 grams of CO₂ per kilometer limit as a threshold, about a quarter-million of the automobile manufacturing industry's global workforce of 8.4 million jobs can be considered a shade of green: 150,000 out of more than 2 million jobs in Europe, 62,000 out of 820,000 in Japan, 10,000 out of 250,000 in South Korea, and 13,000 out of 1.1 million in the United States.⁴⁰

Thailand's government is encouraging effi­cient vehicle production in an innovative way.⁴¹ The government decided in June 2007 to grant tax incentives to auto manufacturers that pro­duce small, fuel-efficient "eco-cars."⁴² In order to receive tax breaks, a company must, among other things, produce cars that get at least 20 kilometers per liter (47 mpg), generate no more than 120 grams of CO₂ per kilometer, and meet Euro-4 air emissions standards.⁴³ The country's 182,000-strong auto industry workforce produced just under 300,000 cars and 896,000 commercial vehicles (mostly small pickup trucks) in 2005.⁴⁴ Thailand has the potential to become a regional hub of "eco-car" production, with plans to serve markets in other Asian countries, Australia, and Africa.⁴⁵

Due to a lack of data, calculations on "green" jobs are not possible at the moment for other major vehicle-producing countries, such as China (with 1.6 million employees), Russia (755,000), Brazil (289,000), and India (270,000).⁴⁶ But China and India are targeting small car production, with China's Chery compact model reportedly achieving a fuel rate of 27 kilometers per liter, equivalent to 63 mpg.⁴⁷