Comment & Debate
Global Competitiveness in Fuel Economy and Greenhouse Gas Emission. World Resource Institute. 10 Feb. 2005 – The European Union (EU) and Japan have the most stringent standards in the world. The fuel economy and greenhouse gas emission performance of the U.S. automobile fleet — both historically and projected based on current policies — lag behind most other nations. These GHG and fuel economy regulations create financial risks and opportunities for automobile companies. In our analysis, we found the financial implications of these regulations to range from +10% to -14% of operating income. Overall, the automobile industry is becoming increasingly global in scope with these regulations are becoming increasingly stringent (with the exception on the U.S.). Therefore fuel economy will become a major driver in the financial performance of automobile companies.