The Political Economy of Emission Standards: Politics, Business and the Making of Vehicle Emission Regulations in Sweden and Europe (1960-1980)

Notes:

Mattias Näsman, Umeå University Umeå University

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Drawing on his doctoral work on the making of emission standards in Sweden, and inscribing the analysed case into the European context, Näsman provides us with valuable inputs that can enrich the broader debate on environmental regulations, on the current Green Deal and on a Just Transition in the automotive industry.

He traces the historical trajectory that led Sweden from the first serious discussions on environmental standards in the 1960s to the approval of European emission regulations based on the use of three-way catalytic converters in the 1980s. Through his case, Näsman highlights several, crucial issues. Firstly, he sheds light on the political economic environment that may affect the design and the implementation of new regulations – including political institutions, business and technical authorities. Secondly, he delves into the relationship between national and European institutional forces, and into the way this can either facilitate or hamper the advancement of progressive policy regulations. Thirdly, he shows how the development of emission standards may encounter technical obstacles, like the actual availability of material infrastructure (ex. fuel infrastructure).

In order to disclose some of the political economy aspects that affect the formulation of environmental regulations, Näsman engages with key questions related to the governance of vehicle emissions, such as the role of trade and economic integration (EEC), the power of the international car industry and the function of technical experts. For this purpose, his analysis follows three sets of actors – business organisations, governments and techno-scientific experts, and their positionality within the debate on technological fixes to environmental problems.

In his historical reconstruction, he describes how, within an overall delay in European standard setting compared to the US, France and West Germany were the first countries discussing and researching the health and environmental effects of air pollutants coming from vehicles emissions. Sweden was one of the pioneers in establishing a proper Expert Group on Exhaust Emissions already in 1965, with a clear mandate to discuss standards and test new technologies. The Swedish laboratory was state-funded and independent from the industry. In the late 1960s (WP29), first strong disagreements between European countries came to the light, with Sweden proposing uniform emission limits, France advancing a system based on vehicle weights, and Germany proposing a system of emission limits depending on fuel consumption. Eventually, while France and West Germany agreed to compromise, Sweden adopted its own regulation system. The European Regulation 15 was then passed in 1970s. In the same year, the US adopted the Clean Air Act (CAA), which further pushed the technological frontier and had an impact on the European industry and policy debate. OICA (then BPICA) argued for harmonisation. Before further European developments, Sweden adopted the US standards in 1972.

Following the economic shocks in 1973 and 1979, pressure to reduce emissions, to increase safety and to improve fuel economy increased. The Swedish industry strongly mobilised against Swedish unilateralism. In 1979, WP29 started evaluating emission reductions against fuel consumption penalties, causing higher tensions between progressive countries claiming stricter standards (ex. Sweden, Switzerland, Norway) and ‘laggers’. Sweden and Switzerland started bilateral negotiations over stricter standards in 1982. In mid 1980s, the UK also significantly shifted towards a ban on lead, previously opposed for supposed lack of sufficient evidence of harmful effects. 1984 saw the formation of the Stockholm group, with Sweden taking the lead, strongly pushing for the adoption of catalysts and for international coordination around stricter emission standards.

Overall, Sweden played a strong role in showing Europe that it was possible to introduce stricter standards and to drastically reduce emissions, despite criticism and oppositions by the EEC and the global market. However, the case also shows how national efforts to establish protective measures for the environment were strongly conditioned by the international trade discourse. In the Swedish case, according to Näsman, the state-led expertise acted as a counter power to business power, limiting its interference with the standard-setting process. At least in the period analysed, rather than from business power, major obstacles to the advancement of stricter emission standards and to the adoption of catalysts actually derived from different structural reasons, like the existing fuel infrastructure and associated costs.

Näsman’s work, in Klebaner’s words, importantly reveals the linkages between different national regulations, but also the crucial role national paths can have in leading the standard setting process. It also interestingly sheds light on a wide range of political and economic factors that affect the formulation of standards and the adoption of new technologies, including price elasticity considerations and international trade dynamics. In this regard, national cases fit into a ‘bigger puzzle’, that strongly determines the direction of the policy process. Overall, the standard setting process shows how regulations are not always the most rational choice, but the outcome of political economy factors combined with the ‘best available technology’ adoption.

In addition, the presentation triggered a series of important questions, such as:

• Volvo’s company history and business model in introducing new technologies and setting standards
• The role played by West Germany in the harmonisation of European regulations
• The current debate on CO2 emissions, at EU level
• The discussion of technicalities about fuel consumption calculations and types of emission measurements that affect the design of regulations
• The historical debate on a global institution where standards could be agreed between states (what became the United Nations Economic Commission for Europe, UNECE) (S. Ramirez)
• The importance of studying the history of technology and the history of standards (S. Ramirez)
• The role of experts within the regulation setting process, and how this changed over time. The difference between public and private sector acting behind the experts, and how this affects the policy process, especially in the European case
• The idea of state controversies opposed to a homogeneous industry vs industry fragmented along national champions, in line with states (historical opposition) (T. Pardi)
• The presence of industry coalitions, as in the case of the collaboration between Sweden and Germany in advancing standards and the technological frontier (T. Pardi)
• The fundamental contradiction between air pollutants and consumption (in which the Diesel is a compromise), and the debate around it. Such a contradiction re-emerges today, in the case of the electric car (T. Pardi)
• Different regulation trends and needs in Europe and US
• General reflections and conclusions on the power balance between industry and the state: can we say this exclusively depends on the strength of the state, does it also depend on the nature of the standards under discussion (environmental, labour etc.) that affects the degree of lobbying power the industry exercises, or perhaps also on the ownership of the industry (local/foreign) in relation to the state? (L. Monaco)
• The need to conduct more studies on the impact of the European/Western standard setting process on extra European/Developing countries – this not only affects the type of production assigned to manufacturing nodes outside of core industrial countries, but also phenomena like the dumping of used cars, often highly polluting, to countries that embrace the standards later (ex. inflow of used, polluting cars in Africa) (L. Monaco)
• The impact of the development of the Japanese car industry, also in terms of technology adoption, on the European standard setting process (H. Bungsche)
• The notion of ‘technological power’ and the case of corporatist states (M. Näsman)