Schriftenreihe Der Abteilung "Normbildung Und Umwelt" Des Forschungsschwerpunkts Technik - Arbeit - Umwelt Am Wissenschaftszentrum Berlin Für Sozialforschung

Schriftenreihe der Abteilung "Normbildung und Umwelt" des Forschungsschwerpunkts Technik - Arbeit - Umwelt am Wissenschaftszentrum Berlin für Sozialforschung

FS II 92-304

Catalyst versus Lean Burn, A Comparative Analysis of Environmental Policy in the Federal Republic of Germany and Great Britain with Reference to Exhaust Emission Policy for Passenger Cars 1970-1990

by Sonja Boehmer Christiansen* Helmut Weidner**

This report is based on research undertaken by the authors between 1988 and 1990 on vehicle emission regulation in Britain and West Germany. It was written and slightly updated by Sonja Boehmer- Christiansen in 1991 and early 1992. The authors would like to thank the Anglo-German Foundation for the Study of Industrial Society which funded the vehicle emission project, as well as a large number of people in Germany and Great Britain, from government, the automobile industry and non-governmental environmental groups who gave freely of their time and information to make this study possible. The project benefited from two broader studies, of the acid rain debate and its impact on the energy sector undertaken by SPRU, and of the nature and development of environmental policies in the Federal Republic and market economies at the W ZB.

* Energy Programme, Science Policy Research Unit (SPRU), University of Sussex * * Abteilung ''Normbildung und Umwelt, Wissenschaftszentrum Berlin für Sozialforschung

Wissenschaftszentrum Berlin für Sozialforschung gGmbH (WZB) Reichpietschufer 50, D-1000 Berlin 30 Tel. (030)-25 491-0 Fax (030)-25 491-684 CATALYST VERSUS LEAN BURN. A COMPARATIVE ANALYSIS OF ENVIRONMENTAL POLICY IN THE FEDERAL REPUBLIC OF GERMANY AND GREAT BRITAIN WITH REFERENCE TO EXHAUST EMISSION POLICY FOR PASSENGER CARS 1970-1990

Summary

In December 1990, the Council of Ministers of the European Community agreed, for new cars, to the mandatory introduction from 1993 of emission limits for exhaust gases requiring world-best practice emission abatement technology: the fully regulated autocatalyst. Exhaust carbon monoxide and the combined hydrocarbons and nitrogen oxides values are to be measured by a new European driving cycle. Agreement was reached after a decade of considerable controversy, which this research project undertook to analyse and understand.

Differences in the perception of national interest in the early 1980s set Great Britain and the Federal Republic of Germany on a collision course over the regulation of large combustion plants and vehicle emissions. Emissions from both sources were abated reluctantly in Britain and contributed to its label as the 'dirty man of Europe'. German action to abate acid emissions was the prime mover of European Community policy on air pollution sources and endowed the Federal Republic with a much higher environmental profile and better reputation for air pollution control.

This report deals exclusively with the regulation of emissions from petrol-fueled passenger cars. It is also a study of barriers to technological diffusion, for the German initiative involved little more than introducing into Europe a technology which had long been in use in North America and Japan but which had been rejected in Europe.

Viewing this case study of the motor industry as part of a larger debate about the capacity of Western industrial states to cope with environmental problems, the hypothesis is put forward that such states necessarily differ in their perception of environmental problems and hence their readiness to respond to technological opportunities. Their capacity to direct or guide corporate policy also varies. The reasons for technological weakness leading to competitive disadvantage are briefly explored. It is concluded that such weakness relates, in part, to the failure by government of harnessing domestic political and institutional structures to encourage and utilise social movements favouring environmental change, in part to less concern with air pollution and especially the car as an environmental threat. This discouraged Britain from realising the potential of environmental regulations for stimulating technological change. However, the broader environmental benefits in both countries remain uncertain because emission policy has so far largely remained isolated from transport policy. KATALYSATOR VERSUS MAGERMOTOR. EINE VERGLEICHENDE ANA LYSE DER UMWELTPOLITIK IN DER BUNDESREPUBLIK DEUTSCHLAND UND GROSSBRITANNIEN AM BEISPIEL DER ABGASBEGRENZUNG BEI PKW, 1970-1990

Zusammenfassung

Im Dezember 1990 beschloß der EG-Ministerrat die ab 1993 EG-weite Einführung von Abgasgrenzwerten für neu zugelassene Pkw. Die Realisierung dieser Werte erforderte den Einsatz des derzeit fortschrittlichsten Standes der Abgasverminderungstechnik: des geregelten Dreiwegekatalysators. Kohlenmonoxidwerte sowie die Kombinationswerte für Kohlenwasserstoffe und Stickoxide müssen in einem neuen EG-weit einheitlichen Fahr test gemessen werden. Diese Regelung konnte erst nach einer zehnjährigen, teilweise heftigen, Kontroverse erzielt werden. In der hier vorliegenden Untersuchung werden diese Kontroverse und ihre Hintergründe analysiert.

In den frühen achtziger Jahren brachte die unterschiedliche Wahrnehmung nationaler Interessen bei der Regulierung von Großfeuerungsanlagen und Kfz-Emissionen Großbri tannien und die Bundesrepublik Deutschland auf einen harten Kollisionskurs. In Großbri tannien wurde die Reduzierung von Emissionen aus stationären und mobilen Quellen nur sehr zögerlich in Angriff genommen, was dem Land den Ruf eintrug, Europas 'dirty man’ zu sein. Die Bundesrepublik dagegen wurde durch ihre Maßnahmen zur Emissions senkung die Hauptantriebskraft für die Luftreinhaltepolitik auf EG-Ebene; sie verbesserte ihr Umweltschutzimage und erwarb sich international einen guten Ruf in Sachen Luft reinhaltung.

Der vorliegende Bericht befaßt sich zwar ausschließlich mit der Abgasregulierung bei Pkw mit Benzinmotoren. Er ist aber auch eine Studie zu den Verbreitungsbarrieren, die innovativen Umwelttechnologien allgemein gesetzt sind, denn die deutsche Initiative war im Grunde kaum mehr als die bloße Übernahme einer Technik, die in Nordamerika und Japan schon seit geraumer Zeit angewandt worden war.

Die Autoren stellen diese Fallstudie zur Automobilindustrie darüber hinaus in den breite ren Zusammenhang der Debatte über die Fähigkeiten und Kapazitäten westlicher Indu strieländer, mit Umweltproblemen fertig zu werden. Dabei ergibt sich, daß sich diese Länder in der Wahrnehmung von Umweltproblemen aufgrund verschiedener politisch kultureller, technischer und ökonomischer Voraussetzungen zwangsläufig unterscheiden, was sich auch auf die Bereitwilligkeit auswirkt, technische Lösungsmöglichkeiten wahr zunehmen und umzusetzen. Ebenso unterscheiden sie sich in ihrer Fähigkeit, Untemeh- menspolitiken direkt oder indirekt nach Umweltgesichtspunkten zu steuern. Die Gründe für entsprechende Fähigkeiten des Staates, die beispielsweise für erhebliche Wettbe werbsvorteile oder -nachteile der betroffenen Industriezweige relevant sein können, werden ebenfalls kurz beleuchtet. Die Autoren kommen zu dem Schluß, daß die Ursa chen für umwelttechnische und damit verbundene Wettbewerbsschwächen zum einen in Zusammenhang mit dem Versäumnis von Regierungen zu sehen sind, innenpolitische und institutionelle Strukturen zu schaffen, die es Umweltschutzinteressen ermöglichen,

II Umweltthemen auf die politische Agenda zu bringen und auf den politischen Willensbil dungs- und Entscheidungsprozeß relevanten Einfluß zu nehmen; zum anderen in der in einigen Ländern sehr eingeschränkten Wahrnehmung von Luftverschmutzung im allge meinen und dem Auto im besonderen als Umweltgefahren. Letzteres führte dazu, daß Großbritannien das Potential von Umweltschutzregelungen als Stimulans für technologi schen Wandel verkannte. Ob letztlich größere und nachhaltige Umweltqualitätsverbesse rungen durch die EG-Abgasregulierung für Kraftfahrzeuge erzielt werden können, bleibt nach wie vor offen, denn in beiden Untersuchungsländem wird Luftreinhaltepolitik immer noch isoliert von der Verkehrspolitik betrieben.

in CONTENTS

PART ONE: INTRODUCTION AND ANALYTICAL FRAMEWORK

Page

Tables v Executive Summary vi Acknowledgements viii

I INTRODUCTION

i The subject matter 1 ii Basic research questions 2 iii Structure of the report 3 iv Methodology 4

n THE REGULATORY BACKGROUND

i The international political and legalframework 5 a) The evolution of European emission standards compared 5 b) Legal status of EC directives 8 c) European regulatory history 9

ii The scope of the regulations 14 a) Lead content of petrol 15 b) Stringency of emission standards 15 c) Test procedure or driving cycle 15 d) Timetables for compliance 16 e) Economic incentives 16

iii Environmental impacts 16 iv Impacts on industry 18

in THE DECISION-MAKING PROCESS

i The nature of technical regulation 20 ii Problems of technology choice 21 iii Uncertainties in environmental science 22 iv The institutional base 23

ii PART TWO: THE PROCESS OF POLICY FORMATION

IV THE TECHNICAL BASIS OF THE ANGLO-GERMAN CONTROVERSY

i Emissions produced during combustion 24 ii Technology choice 26 a) The leanbum engine 26 b) The autocatalyst 28 c) Technology choice as politics 29

V GERMAN DEVELOPMENTS 1970 - 1990

i Introduction: Cabinet promises 31 ii 1970-1973: Antecedents 31 a) History and perceptions 31 b) The legal base for activism 34 iii 1974-1981: Persuasion succeeds for low-lead petrol 35 iv 1981-1983: Waldsterben and the 1983 election 37 v 1984-1985: Confrontation in Europe - unilateralism or speed limits? 40 a) Events and decisions 40 b) The role of industry 47 c) German views of Britain 50 vi 1985-1990: Defeat in Luxembourg and the conversion to voluntarism 51

VI BRITISH RESPONSES 1974 - 1990

i Introduction: the decline of the motor industry 56 ii 1970 - 1989: policy persistence 57 a) The response to the 1984 Commission proposal 58 b) The institutions responsible for air pollution 61 c) The legal base 63 iii Temporary victory in 1985 64 a) Luxembourg is celebrated 64 b) The 'greening' of Britain in 1988 65 iv Institutional and legislative change in the late 1980s 68 a) Integrated pollution control 68 b) The 'greening' of transport policy 69 v Conclusions 70

VII THE ON-ROAD SITUATION AT THE BEGINNING OF THE 1990s

i Total emissions compared 71 ii Conversion procedes in Germany 73 iii Resistance continues in Britain 74

iii PART THREE: ANALYSIS AND EXPLANATIONS

VII MAJOR FINDINGS

i Environmental threat perception 76 ii Institutional capacity 78 iii Political interests 78 iv Economic considerations 79

Vm EXPLAINING ANGLO-GERMAN ENVIRONMENTAL POLICY

i Corporate and industrial policy and culture 84 ii 'Acid rain' and public opinion 87 iii The nature of environmental policy 87 a) The creation of environmental awareness 88 b) Technology or science as driving force 92 iv The evolution of environmental policy 96 a) A three stage taxonomy 96 b) Continued industrial decline in Britain but ecological modernisation in Europe? 99 c) Can market economies solve regional and global environmental problems? 100

IX CONCLUSIONS

i Anglo-German negotiations 102 ii The role of social movements 105

iv TABLES Page

Table 1 Exhaust emission limits: USA and EC compared 6

Table 2 The evolution of European passenger car emission standards 7

Table 3 NOX emissions: totals and transboundary deposition 17

Table 4 Low emission cars and unleaded petrol in GB and FRG (1990) 18

Table 5 German economic incentives for low emission cars - the federal government's concept of 19.9.1984 43

Table 6 German emission regulations for the purpose of classification into low emission and reduced emission vehicles 53

Table 7 Emission estimates for UK and FRG, 1989 72

FIGURES

Figure 1 The relationship between emission abatement technology, speed and emissions 25

Figure 2 The effect of the air to fuel ratio on engine operations 26

Figure 3 Perceptions of what constitutes competitive advantage 86

V Executive Summary

In December 1990, the Council of Ministers of the European Community agreed, for new cars, to the mandatory introduction from 1993 of emission limits for exhaust gases requiring world-best practice emission abatement technology: the fully regulated autocatalyst. Exhaust carbon monoxide and the combined hydrocarbons and nitrogen oxides values are to be measured by a new European driving cycle. Agreement was reached after a decade of considerably controversy, which this research project undertook to analyse and understand.

The perceptions of national interest can be broken down into a number of different strands: judgements about the causes and impacts of acid rain, national technological capacity and the general economic strength of the industry to be regulated in, differences in the nature of environmental policy, in political priorities and institutional commitments already defined in relation to industrial, energy and macro-economic policies. Dis agreements over the large combustions plants issue were resolved in 1988 with the adoption of the Large Combustion Plant Directive. The conflict over vehicle emissions for passenger cars ended in December 1990 with the virtual abandonment, for the 1990s, of an engine technology aimed at improved fuel efficiency and hence with the potential for carbon dioxide emission reduction.

This report deals exclusively with the regulation of emissions from a point source which is also mobile, individually owned and traded in highly competitive markets. It is a study of barriers to technological diffusion, for the German initiative involved little more than introducing into Europe a technology which had long been in use in North America and Japan but which had been rejected in Europe. Largely because of concern for fuel efficiency.

In West Germany, environmental policy was firmly established as an independent policy realm during the 1970s, when the legal and programmatic basis for stringent US type emissions regulations was created and the transition to very low lead petrol achieved. With the 'outbreak' of forest die-back (Waldsterben), the political system was sufficiently activated to demand technological change from a successful export orientated industry. The German car industry nevertheless succeeded in ensuring that Bonn would not introduce mandatory standards unilaterally. Instead, a voluntary scheme was adopted after 1985 based on the subsidisation of the purchase of low and reduced emission cars. Europe then gradually adjusted to the demands of the powerful German market.

vi In Britain the demand for change came largely from abroad. This provoked a defensive response which contributed to the delay in reaching agreement in the European Com munity. Britain's range of options was more circumscribed than that of Germany given overriding commitments to privatisation, reductions in public spending and deregulation.

Anglo-German differences were most fully revealed in EC negotiations because here these had to be resolved in a bargaining context involving a considerable amount of tactical behaviour. These intergovernmental negotiations also reveal the technical complexities of policy-making for pollution control of major industries and the overriding importance of commercial considerations. This promises to be typical for technical standard setting as part of 'harmonisation' procedures under the Single European Act.

Time was needed for the collection of environmental, economic and technological data bases. Environmental and economic risk assessments had to be made, disseminated and established as valid. Major changes in corporate investment and marketing policy had to take place in both countries. An alliance between several governments and industry ensured that the most powerful industrial nation in Europe would not reap undue benefits from the diffusion of a higher value-added product throughout the Community. European industry would, in the end, move forward together. The primary roles of government was to ensure markets for the new product and coordinate policy responses.

Given the scepticism with which both British society and government approached the acid rain issue in general, a market for cleaner cars necessarily emerged more slowly than in Germany. This can be traced, in part, to the more active role played by the German government in environmental policy formation, which included the vigorous promotion of new products and tax breaks for industry and consumers. Regulatory and other pressures on industry helped to stimulate innovation and investment.

The reasons for technological weakness leading to competitive disadvantage are briefly explored. It is concluded that such weakness relates, in part, to the failure by government of harnessing domestic political and institutional structures to encourage and utilise social movements favouring environmental change, in part to less concern with air pollution and especially the car as an environmental threat. This discouraged Britain from realising the potential of environmental regulations for stimulating technological change. However, the broader environmental benefits in both countries remain uncertain because emission policy has so far largely remained isolated from transport policy.

v ii Acknowledgements:

The following organisations supplied valuable documentary information or granted lengthy interviews with individuals in charge of policy, policy advice, lobbying or technical implementation:

In Germany: Federal Environment Ministry (BMU), Federal Environment Agency (UBA), German Association of Automobile Manufacturers (VDA), German Institute for Economic Research (DIW, Berlin), Porsche Research, BMW, Opel, VW, ESSO, Institute for Energy and Environment (IFEU, Heidelberg).

In Britain: Department of the Environment (DoE), Department of Transport (DoT), Society of Motor Manufacturers and Traders (SMMT), Johnson Matthey, Ford UK/Europe, British Leyland/Rover Group, Tickford, BP, OCTEL, Transport and Road Laboratory (Crowthome), National Society for Clean Air (NSCA), Clear and Greenpeace. Dr. Ian Turner of Henley Management College made research data available : which proved most useful for understanding British thinking in 1984 -1986.

Since most interviews took place on the understanding that any information received was given in confidence, the names of individuals interviewed, often at great length, are omitted. Any errors or misinterpretations which remain are of course entirely our own.

v iii "The gravity of the situation is shaped by our appraisal of our capacity to meet challenges rather than an estimate of the knowable external challenges of the future." (R. Heilbronner)

PART ONE: THE ANALYTICAL FRAMEWORK

INTRODUCTION

i. The Subject Matter

The relations between Britain and Germany concerning environmental issues has long been characterised by conflict. When Britain insisted on quality objective for controlling water pollution, the Federal Republic demanded additional discharge standards and succeeded. At the most recent North Sea Conference the German delegation strove for an ambitious "Schutzprogramm" which the British government refused to accept. While the FRG belongs to the foundation members of the so-called "30 per cent Club" aimed at reducing total SO2 emissions by at least this amount, Britain will be among the very last join and by its inability to reduce these emissions faster, has in fact prevented the European Community (EC) from becoming a member. The first modem fluegas desulphurisation plant is still under construction and may well remain one among very few as British utilities "dash for gas". During the global climate debate, Germany made the most ambitious proposal and Britain one of the weakest.

The vehicle emission debate is therefore only one chapter in a much longer story. It probably led to the most intense arguments between the two countries, arguments which for Britain at least touched on questions of sovereignty and the survival of the British car industry. At the core of the debate was the future of leanbum engines, but the issue being negotiated was exhaust emission reduction for petrol engines. For the British government, a solution based on leanbum engine technology was considered technologically more robust and economically more rational.

In 1990 all new cars in Norway, Sweden, Austria and Switzerland, the four non-EC members, were equipped with autocatalysts, while the uptake in the Federal Republic was 98.2 per cent compared to only 3.9 per cent in Great Britain. Two countries, Italy and France with 0.7 per cent and 3.2 per cent, had performed even worse and the Netherlands slightly better than Germany.1 The adoption of autocatalysts had clearly divided Europe and not only Britain and Germany.

The diffusion of a specific pollution abatement technology had clearly been resisted very differentially in Europe. This report will explain this resistance and how it was overcome in Germany. The policy formation process in each country is analysed in its institutional setting and in the context of two major concurrent European debates; one environmental and the other technological.

The Guardian, 29 March 1991, p 25.

1 The starting point of the debate, for Whitehall, was the decision of the German Federal government in July 1983 to register from January 1986 only those new cars with petrol engines, which were equipped with fully regulated (or closed-loop) threeway autocatalysts. This decision, to be heavily contested in the Republic itself, marked not only the beginning of a dispute with the UK, but soon involved the entire European Community.

The environmental debate concerned the causes and impacts of 'acid rain'. The technology choice debate was about the car engine of the 1990s, had considerable commercial implications and led to fierce rivalry between manufacturers. In the mid-1980s Britain manufactured almost 1 million new cars per annum, largely in the medium size range, and its exports had been declining significantly for over two decades. West Germany produced about 3 million cars, mainly in the larger size range and exports were flourishing. Britain tended to produce for the cheaper, Germany for the top end of the market.

Under the impact of German environmental policy, the acid rain debate merged with one over technology choice. In its resolution inter- and intra-govemmental, as well inter- and intra-industry negotiations were essential. The need for policy coordination, and thus effective as well as trusted communication, would become decisive. The acid rain debate is well enough known and is here largely taken as understood; the technology choice issue is analysed in more detail because it explains the considerable involvement of industry, and industrial rivalry, in the regulatory process. It should, however, be noted at the outset that neither the German government nor the European Commission ever claimed to prescribe a specific technology. Regulation was to be by uniform emission standards and these were to reflect best available technology. The issue was to agree what was 'best' and to justify this choice as 'environmentally friendly'.

ii. Basic Research Questions

Vehicle emission regulation, when viewed in the broader context of the general evolution of environmental policy in each country, is a test case for the ability of modem capitalist states to cope with major environmental problems created by its very success in providing mobility and individual comfort. The first set of questions raised are why

(1) Germany and the European Community took so long to adopt emission regulations approaching US and Japanese standards;

(2) Britain in particular opposed their introduction, and

(3) even the German government, which had aimed to follow the US example in the early 1970s, only persuaded industry with some difficulty.

In order to answer these questions, an analysis of the institutions charged with environmental protection will be essential, as well as of the structure of the state itself. The centralised state in Britain allows for little genuine freedom of action at the communal level. This in turn may well mean that central bodies face much more difficulty than their German counterparts in taking local environmental problems into account in the national decision-making process. It will be asked whether the above mentioned difference in institutional capacity, other environmental priorities and technological traditions (ie 'engine

2 philosophies') account primarily for the different preferences of the two countries, or whether economic considerations underpinned by cultural perceptions were largely responsible.

The case study is then used to test the hypothesis that technocratic crisis management has successfully avoided the need for deeper structural change in developed capitalist economies. Ecological transformation has been replaced by ecological modernisation, ie adopting the latest clean technologies. This may have prevented political destabilisation brought about by intensifying domestic environmental problems.

This hypothesis further suggests that successful crisis management becomes possible because of the impact of social movements on technocratic decision-making. Given sensitive political structures, social movements may be able to bring sufficient political pressure to compel remedial and even precautionary environmental action. As this analysis does not apply fully to the UK, two additional questions of interest to political scientists are raised:

1. Why did social movements in Britain fail to have a similarly 'precautionary' impact on industrial environmental policy?

2. What are the international effects of 'successful' crisis management by only a small number of capitalist states?

A judgement had to be made of the capacity for action in each country, given certain relatively fixed macro-economic and macro-political variables which necessarily have impacts on environmental policy. If this capacity was larger for German society, it can be considered to have coped more successfully with the environmental pressures created by modem, industrial society. Does this mean that political stability in Britain is therefore more endangered? Will industrial integration with Europe solve British environmental problems? iii. The Structure of the Report

PART ONE deals with the background and analytical framework for the study of vehicle emission regulation in its international context. It outlines the nature of decisions involved and their institutional origins.

PART TWO outlines the essential technical background to the regulatory controversy, describes policy formation in each country chronologically and in some detail, and concludes with the current on road emission situation in each country.

PART THREE deals with analysis and explanation. The respective roles played by industrial and corporate policy, the acid rain debate and public opinion, and especially the nature of environmental policy, its evolution and interaction with other policies are elaborated to provide an understanding of the events and policies described in Part two.

3 Finally, CONCLUSIONS are advanced both to summarize the insights gained from the vehicle emission study about the national and international regulation of a major industrial pollution source, and to further the discussion of the relative impact of social movements on environmental policies and political stability. iv. Methodology

The methodology underlying the case study is transdisciplinary policy analysis. This requires, as recognised by Hucke and Wollman,2 the parallel use of a wide range of research techniques which cannot be determined a priori but arise during the research process itself. If was found that domestic, intergovernmental and corporate policies had to be analysed in their societal context for underlying interests, perceptions and objectives. Official policy justifications had to be traced to their institutional origin and examined for any linkages or trade-offs (or resolved 'goal conflicts') with other policies. The micropolitical processes at the administrative level and inside firms proved to be of major significance.

The identification of obstacles and positive feed-backs in the adoption of cleaner car technology has been a central aim in this search for understanding of environmental policy-making processes and their effectiveness. Literature review from a range of disciplines, documentary and newspaper analysis, as well as semi-structured and open interviews were the major research tools used. This approach was supplemented by 'participant observations' of numerous conferences when the parties involved explained their positions.

At least one of the researchers had to spend much time and effort gaining a sufficient understanding of the technical aspects of the emission control debate. Such understanding proved to be absolutely essential for political analysis. She expresses her gratitude to the large number of engineers in Britain and Germany who explained and demonstrated the mysteries of the internal combustion engines and its functioning with and without a catalyst.

in R Mayntz (ed) 1980, Methodenprobleme der Implemationsforschung.

4 n THE REGULATORY BACKGROUND

i. The International Political and Legal Framework

a) The evolution of European emission standards

The regulations analysed here concern gaseous exhaust emissions from passenger cars and small vans (less 3.8 tonnes) which are fuelled by petrol, ie use direct ignition engines (Ottomotor). Negotiations on particulates from diesel cars and the lead content of petrol took place concurrently with those on gaseous emissions, but did not create major disagreements. Diesel cars could automatically comply with gaseous standards as defined ; their emissions problem relates primarily to 'smoke' and was regulated separately until 1992. The introduction of unleaded petrol throughout the EC was directly linked to, but not dependent on, that of autocatalysts.

In addition to the two quite distinct domestic debates3 , two intergovernmental regulatory debates came to impinge directly on Anglo-German efforts to regulate vehicle emissions. Negotiations took place first within the United Nation's regional body for Europe, the UN Economic Commission for Europe (UNECE) and later at the European Community level as well. Three gaseous pollutants, carbon monoxide, CO; unbumt hydrocarbons, HC; and nitrogen oxides, NOX are now regulated in the EC by prescribed emission standards measured as they are emitted by new models when tested by a standardised procedure, the European test or driving cycle. This has now been amended to include an extra-urban (higher speed) component. The testing of on-road vehicles for emissions is of major importance for air quality, but this has not yet become a subject of European regulation. EC regulations now also cover lorries and commercial vehicles and the range of regulated pollutants continues to increase.

EC vehicle emissions regulation turned into lengthy and repeated bouts of bargaining among member countries, with Britain and Germany as major antagonists at least until the middle of the 1980s. At the heart of the Anglo-German dispute was the reduction of NOX emitted from the tail pipe of new passenger cars, ie. of gases produced during the combustion of petrol in the presence of air.4 This pollutant is of less significance in diesel engines of similar size. Impacts on the commercial competition between petrol and diesel cars thus became a secondary aspect of the politics of emission regulation, the primary ones being between different petrol engine types and classes of vehicles.

Behind the more transparent intergovernmental debates, less readily observable but equally 'real' battles took place between car manufacturers and fuel suppliers. American regulations and the outcome of the regulatory debate there during the 1970s impinged on Europe in two ways. Firstly, a bitter argument between General Motors (Vauxhall in the UK, Opel in Germany) and Ford, and decided during the 1970s in America, continued in Europe with the North American loser (Ford) taking the initiative by pressing Europe to

The domestic debates were subdued and largely technocratic in the U K , but noisy, politicised and participatory in West Germany, for details see Part Two of this Report.. This mixture o f nitrogen oxide does not specify the greenhouse gas N 20, the emission of which, it

has since been discovered, actually increases when autocatalysts are used.

5 become a market for leanbum engines. Secondly, the more specifically European small car, for which the proposed catalytic technology would present the most serious financial and technical challenges, entered the fray firmly on the side of more lenient emission regulation for fear of declining overall market shares. Not surprisingly, therefore, a strong 'anti-German' front formed during the initial phase of EC negotiations.

In December 1990, seven years after negotiations to introduce US style emission standards officially began in Brussels, the Environment Ministers of the Council of EC Ministers finally agreed to such standards for all new passenger cars (petrol and diesel fuelled; gaseous and particulate emissions) to come into force from the beginning of 1993. Table 1 below indicates the stringency of these values (measured during an amended standardised test cycle) compared to US standards and what was considered technically achievable in 1990. EC and US 1983 standards are now considered roughly comparable. The figures differ because the driving cycles by which emissions are measured are not identical.

Table 1: Exhaust emissions limits: USA and EC compared (in g/km)

CO NOX+(HC) Particulates

EC standard for 1993 2.72 0.97 0.14 US 1983 standards 2.2 0.8 0.1 US 1993 standards 2.2 0.4-0.5 0.05 (proposed) Most advanced technique* 0.9 0.16 <0.05

Source: Environment Business, 16 January 1991 ♦Unofficial sources indicate that Japanese standards are approaching these limits. The Japanese have also succeeded in producing a leanbum engine which can comply with 1983 US standards.

The style of European vehicle emission regulation altered when, in the early 1980s, it became part of a larger set of negotiations over ‘acid rain' abatement and forest die-back. It therefore took place about decade later than in the USA and Japan, where concern had related less to acid rain than to urban health and photochemical smog problems.

Table 2 summarises the history and increasing stringency of gaseous emission standards in Europe. Until 1983 the EC had simply adopted UNECE values which were in fact voluntary. In the Luxembourg Agreement of 1985 it was decided that the introduction of emission-abatement technologies was to be staggered so that industry had time to adjust without fear of competitive disadvantages. However, the technological rivalry between the threeway catalytic converter and cheaper ways of coping with emissions, could not be resolved in this way. The Luxembourg standards, had they come into effect, were to be implemented by 1993, beginning with new large models in October 1988, medium sized ones in October 1991 and in October 1990 for small cars, stage I. The very tough stage II standards were to become mandatory from October 1993. In each case new vehicles, but not new models, had to comply one year later. Regulatory efforts were therefore continuing and the door to revision remained wide open.

6 Table 2: The Evolution of European Passenger Car Emission Standards (in gms per test)

Regulated pollutant CO HC NOX (HC: & nox) 1976 ECE1 15-02 80 6.8 10 no observable improvement 1979 ECE 15-03 65 6 8.5 in air quality, suitable 1984 ECE 15-042 58 19 for leanbum (l.b.)

1984 EC Commission threat to large proposal, (Stage II 45 15 6 l.b. engine to be US equivalent2

1985 Luxembourg > 2 litre 25 6.5 3.5 3 way catalyst only; 1 .4 -2 litre 30 8 leanbum + oxidation <1.4 litre Stage I 45 15 6 suitable for l.b.

1988 Small Car Stage I 30 8 uncertain for l.b.

1989 Small Car Stage II 19 5 3 way catalyst only3 « 1989 Council Promise: All cars to comply with the 19 : 5 standards to be agreed by 1990 and measured with the addition of a high speed component to the European test cycle.

December 1990 19 5 3 way cat for all cars Consolidated Directive from 1993/4 agreed(+ high speed component)

1 ECE average value, as differentiated by weight of vehicle 2 cf 1978/1981 German proposal to ECE (in g/test) weight of vehicle (kg) CO H C and h

1250 30 10

1 2 5 0 -1 7 0 0 36 10

1 7 0 0 -2 1 5 0 4 2 10

2 1 5 0 4 8 10 3 Combined with a new driving cycle, British leanbum engines can no longer comply.

Source: Compiled and simplified from several official sources cited in text and without details of timetables for compliance

7 b) The legal status of EC directives

Status concerns the question of whether standards are binding in law and whether any one country is entitled to adopt standards lower than those agreed by the Council of Ministers. Only the British government raised the legal status of the directives as of major significance to its own policy and the issue itself changed with the Single European Act of 1987.

Vehicle emission standards were first adopted by the European Community in 1970 as directive 70/220/EEC. This simply incorporated UNECE norms agreed and occasionally amended in Geneva since the early 1960s. EC Directive 70/220 and its numerous amendments are also described, in the UK literature, as 'permissive' or 'optional' meaning that member states are not obliged to make these standards mandatory in national law, but may not refuse national or EC type approval to a vehicle if it meets its requirements. The directives were seen as regulations for removing barriers to trade rather than enhancing environmental protection, for a country would be permitted to produce vehicles without any emission regulations for its domestic market. A company accepting such norms would have given up any intention to enter inter-European trade.

The fundamental legal question later raised on environmental grounds was whether national norms lower than those agreed for the EC would comply with the spirit of Community law and the goal of harmonised environmental standards. The British governments position was that a permissive directive would allow the setting of lower emission standards at home. The EC vehicle directives now in force, however, are based on Article 100a of the amended Treaty of Rome. This article, according to authority, serves both the completion of the internal market but also requires the Commission to take a "high level of (environmental) protection" into account.5 The Single Market would therefore appear to have made the concept of optional technical standards adopted under article 100a redundant, although under article 130t non-uniform environmental standards above an agreed minimum remain possible for non-traded goods and if compatible with the Treaty.

An interview at the EC Commission indicated unfamiliarity with the concept of permissive directives. Current directives are certainly not considered permissive in any sense in Brussels. Recent Community legal texts that have been consulted do not mention the category of permissive directive. Rather, they state that national unilateralism is only permitted with respect to more stringent but not weaker measures.6 Britain would therefore only be allowed to adopt more stringent standards but would not be allowed to exclude vehicles from other countries on its roads which comply with a 'permissive' standards. The difficult issue raised here (but never tested in court) is how emission standards are in fact linked to environmental quality.

L Krämer, 1991, EEC Treaty and Environmental Protection, Sweet & Maxwell, London. Krämer, ibid, states that the "Luxembourg standard did not become mandatory because Denmark and Greece rejected it as unsatisfactory..." (p 8) that Court rulings indicate that environmental decisions prior to SEA could be based on Article 100 and that Article 100a has not altered this and this report assumes that permissive directives no longer exist under the Single European Act.

8 A more permissive natural environment may indeed require less stringent standards to achieve uniform environmental quality. It is generally argued in Britain, and scientific data supports this, that the British environment is less affected by acid rain and especially by NOx deposition than the centre of a continent. The standards to produce equivalent environmental quality would therefore not require to be as stringent for a West coast island. However, this then raises the question of transboundary pollution and, more importantly for the EC, that of trade barriers and hence non-environmental justifications for uniform technical standards. These of course gained in strength with the approach of the Single Market.

For cases of EC decisions made under the majority rule, of which vehicles were the first case, only tougher national standards are permissible. Krämer has argued, it is futile to speculate whether the primary objective of vehicle emission regulation was the completion of the internal market or improved environmental protection: different interests would have had different priorities. In practice, the special legal status of the vehicles directives appears to have been irrelevant to the industry. Industry never referred to it and the subject was never raised in Germany. In Britain, however, it seems to have strengthened official determination to resist damage. c) European regulatory history

British emission policy and German policy after 1984 were primarily determined at the European Community level. The following describes the outcomes of these negotiations with only brief reference to the two countries. Their roles, and especially the reasons behind them, are described in detail in Part Two.

Vehicle emission regulation in the EC begins with Community directive 70/220/EEC of March 1970, which initially applied only to Germany. The First Community Environment Action Programme of 1973 considered it necessary that "all Members adopt the same requirements...for measures to be taken against air pollution by gases..".7 The Directive also mentioned that its annexes 'shall be adapted' to technical progress. When Britain joined the EC in 1973 it must have become aware almost immediately of German concerns about vehicle emissions and a desire to introduce US type standards, and that the Community's aim was to adopt uniform, non-permissive standards.

As mentioned, until 1983 the UK and the EC simply adopted voluntary standards developed under the UNECE system set up in the 1960s to further inter-Europe trade. For example, the standards to be implemented by 1986 and enshrined in ECE Regulation 15-04 are almost identical to those contained in directive 83/351/EEC.8 (See Table 2) The UNECE regime tended to produce 'lowest common denominator' technical standards and through its 'global approach' to regulation allowed for trade-offs between energy efficiency, safety and environmental standards.9

OJ No L 76/1 of 6.4.1970, proposed in 1969. The full title is 'directive on the approximation of the laws o f member states relating to measures to be taken against air pollution by emissions from motor v e h ic le s '. OJ No L 197 (83.351) of 20.7.1983, directive proposed April 1982. For early details, see G R Heaton and J Maxwell, Patterns of automative regulation: An international comparison, Zeitschrift für Umweltpolitik. Berlin, January 1984, pp 15-40.

9 In Brussels, however, environmental standards were being pursued more single-mindedly. The First Environment Action Programme called for the latest scientific advances in combating air pollution to be taken into account; an even more urgent call came from the Third Action Programme.10 In 1974 (74/290/EEC) the limits for CO and HC were reduced and in 1977 (77/102/EEC) nitrogen oxide became the third regulated pollutant. All three limits were tightened in 1978 (78/665) and again in 1983 (83/351).

Because of their voluntary or relatively weak nature both the UNECE and early EC regimes were considered inadequate by environmentalists. Regulation had remained largely in the hands of industry, with standards negotiated inside the CCMC, the French dominated Committee of European Community Automobile Makers.11 The early UNECE/EEC regime allowed for significant differences between cars manufactured in different countries and provided little incentive for car companies to develop their R&D capacity for vehicle emission abatement. This incentive existed only for firms exporting to North America, which were required to comply with the US Clean Air Act of 1970, and this applied primarily to higher value cars.

Because the European car market in the 1970s and 1980s was still largely organised nationally, allegation of transfrontier pollution damage proved to be politically powerful. Pressures for uniform technical standards above those acceptable to the weakest member, so far fairly subdued, began to affect international relations. Trade in vehicles was increasing, but this was favouring Germany while British exports were declining.

Preparation for the Single European Market and the European environmental movement began to have significant impacts on vehicle emission regulation after 1985. However, even before Europe as a whole became interested in uniform, more stringent vehicle emission standards, Germany had revised its policy sharply under the impact of domestic developments, including the growing awareness of Japanese competition.

German pressure then gave rise to a Commission proposal in June 1984 (COM 84/226) which contained two related draft directives, one dealing with the lead and benzene content of petrol, and the other with gaseous emissions. The latter formed the basis for the negotiations described in detail below and was similar to a German proposal which had been developed earlier by the Federal Environment Office (UBA) for the Federal Interior Ministry. The issue of bezene was dropped at that time, but lead content became an important subject because of a direct technical link with emission abatement.

The Commission's 1984 proposal was not well received in Europe and was rejected almost out of hand in Britain, France and Italy (all major competitors for cars), but not in Denmark and the Netherlands. It forced a number of countries to have a close look at their

S P Johnson and G Cocelle, 1989, The Environmental Policy of the European Community, Graham and Trotman, London, pp 11-24. This lobbying organisation came early under French influence, particularly that o f Peugeot, and formed the major source of technical information for European governments. It dissolved itself in 1990 in protest against Peugeot's domination of this body. Ironically, Peugeot, a 'villain' of the acid rain story, now courts favour with the EC Commission by being the only car company supporting European fuel efficiency standards. (Die Zeit no 12, 15.3.91). It also hopes to comply with EC emission standards one year before this becomes mandatory, ie in 1992 rather than 1993.

10 vehicle emission policies and started a lengthy bargaining process which is by no means completed. The date of the original German proposal to the Commission for the implementation of stricter gaseous emissions limits for new models was 1989 and 1991 for all new cars. This provides a baseline for measuring the eventual German success. Neither the German nor the Commission proposal at that time divided the vehicles to be covered into three classes by engine capacity but, following earlier ECE regulations, related emissions to a considerable number of weight categories. (See Table 1, note 2) All the Commission was able to obtain in 1984 was a general agreement that, by 1995, the EC would fix limit values "which will produce the same results as those obtained in the United States and Japan", i.e. be US equivalent.12

Lead in petrol

The lead content of petrol is linked to the emission debate for technical reasons (see below), but it need not be. Regulating the emission of lead involves agreeing on product standards for petrol. This was achieved in 1985. The Council of Ministers had agreed in December 1984 , not to replace leaded petrol, but to make unleaded widely available throughout the Community to those who might need it. Directive 85/210/EEC was adopted in March 1985 when all EC countries agreed 'to ensure the availability and balanced distribution within their territories from 1 October 1989'. The original aim of the 1984 Commission (and German) proposal, however, had been more ambitious, namely that all petrol engines of vehicles covered by the emission directive should be designed to run exclusively on unleaded petrol. New engines unable to run on unleaded can still be used and will continue to be 'legitimate' at least until 1993. However, a small step towards the autocatalyst had been taken.

The Luxembourg Agreement June 1985

Subsequent agreements of major importance were the Luxembourg Compromise of 1985, which eventually became Directive 87/76 of December 1987, the Small Car Agreement of 1989 (directive 89/458), and the draft Consolidated directive of February 1990, which was finally adopted in early 1991.

Directive 87/76 contains the Council's 'common position' agreed in Luxembourg by all members states except Denmark. It divides cars into three categories on basis of their engine capacity, with the most stringent limits for the largest cars (equal and above 2 litre engine capacity) and the least stringent for the smallest. Limits for medium sized engines would have enabled these to comply by a combination of leanbum engines and simple oxidation catalysts.(See Table 2) It did not satisfy a number of countries, but reflected available technology and what was considered cost effective by industry.

The UK considered the 1985 agreement a victory for its cause because it would allow a continuation of a NOX abatement policy based on the leanbum engine. British industry appeared to assume that these standards were final. In Germany, Luxembourg was widely experienced as a defeat. The directive was not finally agreed until early December 1987 and then required the Commission to make a further proposal by the end of the month for

OJ, C 178, 6.7.1984.

11 more stringent small car standards by 1992 . The Commission complied in February 1988. In spite of repeated and often acrimonious meetings of the Council of Environment Ministers, especially between 1984 and 1988, the Luxembourg Compromise and the lead directive remained unsatisfactory to several member countries. They did set, however, a timetable for industry to adjust to catalytic technology by allowing most time for the smallest engines, and time for the required fuel distribution systems to be set up. While gaseous emission limits remained a subject for further negotiations, they also remained subject to revisions brought about by technical developments.

The Small Car Directive 1989

After 1986, the vehicle directive no longer required unanimity for its adoption, but was decided in Council by majority voting, the first directive to do so. The Single European Act had come into effect. This meant that any one member state had now lost the power to veto the directive on small cars.13 This directive too proved controversial and was not adopted until 1989. The stringency of the standards, the costs of their introduction, the legitimacy of economic incentives and the timetable all proved controversial.

In February 1988 the Commission made a new proposal to the Council, but now had to submit it to the European Parliament (EP) for approval. The proposal included the value adopted for middle sized engines, ie 8g/test for combined NOX and HC emissions. The Commissioner for Environmental Protection, Stanley Clinton-Davies recommended the proposal as follows:

" It is my firm view that this proposal represents the best available compromise from the point of view of the environment, the consumer and the industry."14

The proposal would not have required threeway catalysts for small cars and hence would have kept down the cost of small cars and the need for electronic components. The Commission argued that otherwise the price of small cars would increase by 13 per cent.

The Environment Committee of the EP, however, considering the proposal inadequate refused approval and countered it with a proposal of its own, suggesting a standard of 5g/test for NOX and HC. The Commission now had to redraft and arguments continued among the experts until 1989. In June 1988, under a German chairman, the less stringent proposal was discussed and accepted by Germany, but not by Denmark, Greece and the Netherlands, all countries without domestic car industries who supported the 5g/test standard. Negotiations continued.

Political pressures in support of stricter limits continued to grow. In December 1988, Belgium, the Netherland and Germany agreed to cooperate in the effort to introduce emission standards at least as strict as those of the US and promote public transport. In this they were supported by the Scandinavians, the Swiss and Austrians who had already

For details, see N Haigh, 1989, Environmental Policy and 1992, European Cultural Foundation, London, pp 52-56. Europe Environment. No 304 1988, p 12.

12 adopted US standards or were about to do so. It was realised that Japanese cars could satisfy any standards Europe might propose.

In February 1989, Germany adopted the unilateralism it had so long rejected and made the threeway catalysts compulsory for all new cars from 1991. It had moved away from the Commission proposal and closer to the position adopted by the three dissenters mentioned above. In July the Commission followed suit. Under directive 89/458 , adopted on 28 July 1989, small cars with an engine capacity of less than 1400 cubic cm would in future have to satisfy emission values much tougher than those already agreed for large cars in 1985, including the 5g/test standards earlier proposed by the EP.15 The directive was to come into effect from July 1992. According to the Commission, these 'small car' standards are "based on the performance of the best available technology, i.e. the threeway catalytic converter with closed-loop control" and under paragraph 2, from 1 July 1992 Member states "shall refuse national type approval for a type of motor vehicle, the emissions from which do not meet the requirements ..."

The 1989 Council decision also confirmed that a new test cycle including a high speed travel component should be agreed in future and applied to all car sizes. The 1985 and 1987 agreements therefore fell apart largely due to technological progress and political persistence. Leanbum technology was now likely to be defeated unless it could significantly reduce NOX emissions.

The Consolidated Directive 1991

After 1989 the Commission responded to the commitment associated with the Small Car decision, to propose uniform limits for all car sizes, broaden the range of controlled pollutants and add a high speed element to the European test cycle. A draft consolidated directive was agreed in December 1989 and published in February 1990.16 Germany insisted on the further tightening of emission standards by December 1993 to be made on the basis of further proposals from the Commission by December 1992.17 The standards agreed prior to 1990 were to be scrapped in favour of a single set of standards for all passenger cars (and in future vans as well), diesel or petrol fuelled, and measured by a revised test cycle.18 Durability tests for emission abatement devices were also proposed, as were charcoal filters in the shape of small canister to reduce evaporative (VOC) emissions.

OJ L36, 9.2. 1988, pi; and OJ L226, 3.8. 1989. CO M (89) 662 final, Brussels 2 February 1990. The draft Directive covers 165 typed pages, including 9 appendices, an indication of the technical complexity o f these regulations. The new emission standards had to be transposed to the new test procedure in a neutral manner so that 'lim it values as severe as the standards of Directive 89/458' were achieved. Arguments about which engines w ill 'survive' the new tests and which w ill not, were clearly continuing. The proposed standards are expressed in g/km as CO : 2.72; HC and NOx: 0.97; particulates 0.19. The conformity of production tolerance limits was also reduced at the suggestion of the European Parliament. Concessions would be allowed until the standards become mandatory. Pollution abatement devices would have to satisfy reliability tests. BM U, Umwelt No 1, 1991, p 8. Interviews with vehicle emission engineers in the U K indicated that the combination o f these standards with the new test cycle was causing serious 'headaches' and that leanburn engines would have to be 'reduced' for compliance.

13 The major remaining problem was that of very small, largely Italian cars for which the resistance to very stringent limits continued on both technical and economic grounds.

In October 1990 further negotiations produced consensus only to the effect that emission limits yet to be agreed would require future review. After further debates about standards and tax incentives for cars cleaner than required under EC law (to which the British and others maintained very strong objections), Environment Ministers finally agreed on December 21 1990 to a common position to be put to the European Parliament for a second reading.19 A final directive had not yet been published at the end of 1991, but is expected to set emissions standards for new cars which are at least as tough as those already enforce in the USA and elsewhere since 1983, and which are already in the process of being tightened further under the US Clean Air Act of 1990, (so tight in fact in California that petrol and diesel cars will no longer able to comply).

This long drawn-out process of vehicle emission regulation is therefore bound to continue as technology advances and new environmental threats and or commercial advantages are perceived. By 1990 the Federal Republic of Germany had achieved an objective first proposed in 1970 not only for itself, but more gradually for the EC as well. It remains very doubtful that such an agreement could have been reached against the continued resistance of the powerful European car industry.

The Geneva Convention

The passenger car negotiations were influenced not only by the European Commission's commitments to environmental protection and the Single Market, but also by UNECE. Under the impact of the Geneva Convention on the Long-Range Transport of Air Pollution (1979), East and West Europe began to be increasingly concerned with NOX emissions, something which could not have been foreseen in the early 1980s. Negotiations under the 1989 Sofia Protocol to the LRTAP Convention reached agreement that 1987 NOx emissions should be stabilized by 1994. The UK has accepted this target, while Germany committed itself to an informal 30% reduction by 1998, thus adding to the pressures for 'denoxification' in the transport sector.

ii. The Scope of the Regulations

Looked at more closely, the EC vehicle emission regulations described above cover five technically quite distinct matters: the lead content of petrol, stringency of emissions as measured during a prescribed procedure, the test procedure or driving cycle itself, timetables for compliance for new models and new cars and rules about economic incentives. Looking at these individually explains the technical complexity of the negotiations. a) Lead Content of petrol

The lead content of petrol became an issue for the control of gaseous pollutants because autocatalysts require unleaded petrol. The deposition of lead in the converter makes the

Environmental Data Services Ltd, ENDS Report 191. December 1990.

14 essential chemical processes ineffective. The marketability of 'cat' cars therefore depends very much on the availability of such petrol.20 The removal of lead can also be justified purely on health grounds. Because of the more widespread use of high compression engines in the UK, the lead questions also became tied to octane levels, with British engines needing higher levels than most German ones.

The lead content of petrol had already decreased significantly in Germany during the 1970s from well over 0.4 microgramme per litre to 0.15.21 Similar developments in the UK took place during the 80s and were justified only on health grounds, but against considerable scientific and industrial opposition.22 Achieving these reductions much later than Germany in itself became a factor which increased the compliance costs of the transition to catalytic technology in Britain. b) Stringency of emission limits

Emission limits relate both to engine technology and the test procedure with speed and engine temperature as major factors, (see Chapter IV). These limits are measured in g/test (or g/km) for three gaseous pollutants omitted from the tail pipes of new models or newly purchased cars. Two sets of standards are in fact prescribed, the more demanding one for type approval and a slightly less severe one for production conformity. This report cites only the former. c) Test procedure by which the gaseous pollutants are measured

Because emissions relate very directly to driving behaviour and especially speed, it is this test rather than the emission standards as such, which determine the ultimate stringency of the abatement technology required. A great deal of expert controversy was therefore associated with it. The European urban test used since the 1970s was based on Paris traffic in the 1960s and is still mandatory for current EC standards. It reflects low speed, low acceleration travel typical of urban, fairly uncongested traffic and hence measures fewer emissions than are likely under motorway/autobahn and congested urban driving conditions. There is therefore a technical link between the setting of speed limits and emission control. The realism of the driving cycle itself was a matter for debate. The newly agreed one is said to be a 'reasonable' reflection of traffic on the Continent. Since speed limits remained unacceptable to Germany, one option for emission reduction did not become available.

Availability means much more than production in refineries. It includes a safe delivery sytem at the level of individual pumps, including special nozzles which only fit 'cat' cars. Significant costs were incurred by the owners of petrol stations, as well as the oil companies. H Gabriel and K Zimmerman, 1978, Strategien zur Regulierung von Automobilemissionen, Aton Hein, Meisenheim, documents the successful introduction o f low lead petrol during the 1970s in spite o f opposition from the oil industry. The introduction o f unleaded petrol was vigorously opposed on energy efficiency (high octane number) grounds by the industry manufacturing lead additives, Associated Octel Co, see Unleaded Gasoline, January 1979. Also, D Hughes-Evans, 1983, Lead-An End to a Controversy?, The Environmentalist, no 3, pp 167-171.

15 d) Timetables of compliance

The Luxembourg Agreement and subsequent delays can be understood as methods by which industry was given time to adjust and innovate provided it would read the regulatory signals correctly. Timetables are of major importance for investment, R&D and design strategies of the industries concerned (car manufacturers, component and fuel suppliers) who generally argued for more time, if only to not break ranks with weaker members.

Time is needed not only for new investment, but also for achieving satisfactory returns on investments already made. Companies prefer the slow diffusion of a new technology so that 'old' models can be sold in 'pollution havens' while new ones can be tried in relatively risk-free commercial environments. It is therefore in the interest of industry to ensure both types of environments, something which this case study well illustrates. The area where the German government had to make major concessions (and accept most of the commercial risks) were timetables. It had initially hoped to introduce mandatory USA type emission standards by the end of the 1970s, something which then became January 1986 and is only being achieved after 1992. e) Economic incentives

This issue arose because several European countries, and especially the FRG, became frustrated by slow progress being being made in Brussels. They insisted on the right to encourage the voluntary introduction of low emission vehicles and unleaded petrol in their home markets by compensating buyers for additional costs until the new standards had become mandatory. Economic incentives can also been interpreted as one means by which risk freer environments are created for industry. The demand for incentives provided a major bargaining counter throughout the EC negotiations. The policy itself was most strongly advocated by Germany and the Netherlands which had to rely, until 1993, on voluntary means to implement domestic programmes. Government intervention in forfeiting tax income thus ensured a market for cleaner cars as long as industry could claim to be disadvantaged by unfair competition.

Britain consistently opposed the idea as a breach of the polluter pays principle, although it came to rely on tax reductions for the uptake of unleaded petrol. The considerable power of the European Court in influencing policy through its judgements most probably encouraged voluntarism and hence the adoption of incentives in Germany. The Court would probably not have accepted attempts to make stringent emissions standards mandatory ahead of the agreement. iii. Environmental impacts

The Anglo-German controversy was not primarily about what the environment could cope with in terms of vehicles and vehicle emissions. It could not be so because the overall air quality for NOX was better in the UK, total NOX emissions in Britain being less than half of those in Germany, (See Table 3). This meant that even the adoption of the most stringent abatement regime for vehicles was expected to have only relatively minor effects on regional air quality in Britain. As Table 3 illustrates, the problem of transfrontier NOX pollution was limited for the UK, but much less so for Germany.

16 Table 3 Estimated NOX deposition in 1989 (in '000 tonnes)

NOX from NOX from Exports to total sources own sources

FRG 2456 1173 UK 47 UK 922 626 FRG 229

FRG Sweden & Norway 276 UK Sweden & Norway 261

Source: Acid News, January 1990 (based on EMEP model)

The environmental benefits of the low emission car were questioned mainly in Britiain and must remain uncertain as long as car numbers and congestion remain uncontrolled. In neither Japan nor North America has the introduction of catalytic technology brought about sufficient improvement in urban air quality because car numbers and milage driven have kept on rising. Past and expected further growth in such numbers, the refusal so far by Germany to accept speed limits on the autobahn and the slow replacement rate of cars (made much worse by the recent acquisition of five new car hungry Länder) have prevented an absolute decline in NOX emissions even in the FRG. Instead, the car industry in Europe as a whole experienced a boom period during the second half of the 1980s which was based, in Germany, on the sale of higher quality, if 'environmentally friendly' vehicles. Table 4 illustrates this uptake in Germany compared to a much weaker response in Britain.

Table 4 Low emission cars and unleaded petrol 1990/91 (as % of total fleet or consumption)

UK FRG

PASSENGER CARS with fully regulated AUTOCATALYST < 1 > 15 complying with 1985 Luxembourg limits not known 79 unleaded petrol total (in mid 1991) 36 74

Total car stock 22 million 35 million

Source1. UK estimates from unofficial sources; FRG, BMU 1991

17 In both countries, concern about growing car ownership and the general dependence on private transport encouraged a closer look at the environmental impacts of cars and car use. However, given the economic and political significance of the car industry, the issue was redefined into a single dimension, that of emissions from individual vehicles. This could be 'solved' profitably by technological change involving, potentially at least, significant emission reduction per distance travelled. More genuine 'ecological restructuring' could be avoided for several more decades. This allowed a debate which was primarily about the future of the European car industry, what costs national car companies, national economies and ultimately what the Single European Market would accept as economically feasible, and about the need to restructure the European car industry in competitive world markets. This raised the question of how fast technology forcing and dissemination through regulation was politically and industrially feasible in an EC context.

vi. Impacts on Industry

Sophisticated autocatalysts are not simple add-on devices, but require a new type of car. They have become essential for most new vehicles in order to comply with prescribed emission standards. Since the stringency of these standards and the nature of the test cycle has far-reaching implications for engine design, emission abatement technology, fuelling system and even car design, their adoption not only seriously clashes with existing R & D trajectories, but also threatens to wipe out investments already made. If sufficiently 'tough', entire technologies may be doomed by pollution abatement requirements. This alone explains the determination of industry to influence the regulatory process. Fuel quality and speed limits also have major implications for engine type and performance and hence marketing strategies. Tax incentives have a positive impact on the sales of new, more expensive products as long as cheaper alternatives are still available.

From the American experience of the 1970s it was well known that emission abatement would involve major compliance costs to industry. This was especially so for the producers of smaller, lower value cars and hence for a sector of the European vehicle market where competition was particularly fierce. Given the difference in North American and European urban environments, the small car could call upon environmental arguments of its own which were not directly related to technical emission standards. At the very minimum, the producers of small cars would need most time to adjust to demands for reducing their gaseous emissions significantly. Britain, as a major producer of relatively cheaper, medium-sized cars wanted to prevent standards which would require this more expensive type of technology. The European car industry in general i resisted the autocatalyst throughout the 1970s on the grounds that it was inappropriate for smaller European cars and different environmental conditions. Only the exporters of cars to North America, mainly luxury producers, gained early experience with catalyst technology.

However, catalytic technology would also create major new 'winners' in the component supply sectors of the motor industry. Catalyst technology was adopted in the USA at the

18 advice of the British based precious metal firm Johnson Matthey in the early 1970s.23 The not entirely satisfactory experience in the USA, where unleaded petrol was not made cheaper in turn influenced many Europeans against this 'add-on' device which for some engineers belonged to the past.

From the industrial perspective, therefore, the European vehicle emission debate was both about technology choice and commercial competition. Investment plans, component supplies and timetables were the underlying concerns rather than environmental damage and NOX dose limits for ecosystems. Real or perceived impacts on profitability and international competitiveness rather than environmental virtues came to dominate the bargaining tactics of government and industry. This was realised in the 1984 Commission proposal which had argued that the directive was necessary also "for reasons of innovation and industrial competitiveness".

Interview with D r Acres, Director of Technology Planning, at Johnson Matthey, the world's major producer o f the catalytic coatings for the converters. It has been suggested that since JM stood to gain higher royalties from the threeway converter than from the oxidation catalyst, its lobbying also turned against the leanburn option. After 1985 the producers of catalysts formed a European lobbying organisation - Automobile Emission Control by Catalyst (AECC) based in Brussels. Its German newsletter provides some evidence about the degree o f collaboration between car and fuel industry prior to regulation.

19 in THE DECISION-MAKING PROCESS AND ITS INSTITUTIONAL BASE

The Anglo-German differences over passenger car emissions date back to the 1970s but did not emerge as an international issue until the early 1980s. With environmental policy in the UK generally being science-based, reactive and responsive to industrial interests, official pressures on industry to innovate in the field of pollution control generally remained weak, especially so for vehicles. In contrast, in the Federal Republic administrative, legal and social pressures had been gathering strength since the late 1960s and eventually became strong enough to change corporate policies.

To understand the subsequent political controversies fully, a considerable degree of technical and institutional knowledge is required in four distinct areas: (i) the nature of technical regulation; (ii) the technological choices involved and the implications of these choices for industry; (iii) the environmental arguments used in justification of policy and (iv) the roles played by the institutions involved as fora of decision-making with particular cultures and interests. i. The Nature of the Technical Regulation

As described in more detail below, the technical regulations involved here govern, firstly, the emission behaviour of various engines types under different running conditions and in association with different emission abatement techniques, and secondly, the measurement of these emissions by prototype engines during prescribed but highly manipulative testing procedures. Engine emission behaviour in turn is dependent on fuel quality and the effectiveness and robustness of the abatement devices used. This in turn relates to car design, engine and fuel management, as well as other 'values' which engineers must strive to achieve, especially safety, fuel efficiency, performance and 'marketablity'. A wide range of industries, and hence potential actors and conflicts of interests and coordination in the policy formation process are indicated.

The need for trade-offs between emission abatement and fuel efficiency was widely asserted during the emission debate and became a major argument against catalytic technology. It was concluded not that these assertions were false, but that they were exaggerated and therefore tactical, as well as subject to revision as technological progress (and hence investment into R&D activities by companies) overcame any major incompatibility that may have existed. Faith in the capacity of technological change to provide solutions (and hence industrial culture) thus became one variable of policy. The capacity of making new investments into R&D activities proved to be another, even more crucial one.

The size, power and performance of a vehicle rather than its emission abatement technology are major factors influencing fuel consumption and the marketability of current vehicles. The economic significance of fuel efficiency and hence its role in marketing was, however, low during the 1980s. The argument for fuel efficiency therefore reflected past investment trajectories which companies did not want to alter, rather than a response to 'new' environmental concerns. The argument was particularly attractive to companies in a poor competitive situation, as well as to governments with a strong institutional commitment to fuel efficiency, such as the UK. In the German debate, fuel efficiency

2 0 played hardly any role, although green groups tended to be attracted to it. In neither Britain nor Germany were there indications that government would readily respond to car related environmental problems in ways which might harm the domestic car industry and weaken the demand for vehicles. The vehicle industry was highly valued by both governments for its ability to provide employment, satisfy the desire for individual mobility, absorb new components and generally act as a major engine of technological innovation and economic growth in industrial society.24

While the world car industry was generally plagued by declining sales in the early 1980s, the situation was far worse in Britain where exports were declining sharply and a withdrawal from US markets was under way. In the area of technical reputation, therefore the producers of high value products (ie. BMW, Daimler-Benz) had a distinct advantage over the producers of small and medium-sized cars, especially 'down market' ones, ii Problems of Technology Choice

Throughout the 1970s the European car industry had managed to avoid the adoption of an 'American' technology, autocatalysts, for a number of reasons: costs, antipathy to its origin and 'add-on' nature, and simple inertia enabled by protectionism still widely practised. Governments had been putting pressure on the industry to produce more fuel efficient cars after the oil crises of the 1970s and, in the absence of US type emission controls, had created an R&D emphasis on fuel efficiency which was traded-off against increased NOX emissions, the very cause of German environmental concerns as these emissions rose steadily throughout the 1970s. All this could not be reversed easily, least of all by companies in financial difficulties and without export experience to the USA.

The technology choice debate over the 'leanbum' engine versus the use of 'add-on' catalysts was fundamental to the dispute between Britain and Germany. It was a matter of 'engine philosophy' with major economic implications, as well as a dispute between two rival US companies with strong European bases: Ford and General Motors (Opel and Vauxhall).

Competing technologies for the reduction of emissions came to play a major role because of their different impacts on industrial costs. Technological change may make one firm more or less dependent on outside suppliers, and different technologies tend to allocate compliance costs in different ways between industries. The corporate strategies of individual firms had to respond to a range of new demands and pressures involving not only engine and vehicle design, but also fuel, precious metal and electronic component supplier.25 Before the industries involved could negotiate with government, technology alone required that individual firms, often competitors, should adopt common positions, something which was often difficult and did not always succeed. The demands of industry to be allowed sufficient time to adjust to new regulations are therefore often well founded,

see D Ross and A Altshuler, 1984, The Future of the Automobil, M IT. In the mid 1980s, Bosch was almost the only supplier o f the electronic components required for three way catalytic converters in Europe. This raised suspicion and alarm, especially in France, and led to the German government advising Bosch to increase its investments abroad. US owned companies were less affected as they could import from their parent companies.

21 but are not always understood by decision-makers and environmentalists unaware of the workings of industry.

The leanbum engine was promoted as a nationally satisfactory solution to emission problems by the UK government primarily at the request of Ford UK and Rover (formerly British Leyland) and in response to its own environmental assessment. UK based companies were developing this type of 'clean' engine in response to the second oil 'crisis' of the late 1970s. Similar efforts were taking place in Germany, but were abandoned or at least shelved when engineers realised that this engine could not deliver sufficient NOX abatement without catalytic systems and was, in addition not likely to be in production soon enough.

The British government, however, had been persuaded that the future belonged to leanbum, arguably because the range of interests and institutions consulted was too narrow to suggest any other conclusion. Because of its commitment to this engine type, it was also committed to ensure that leaded petrol (or fairly high octane unleaded fuel) would remain widely available. The UK had to face that, in the mid 1980s, even a number of new British models would not be able to run on unleaded fuel.

Since catalysts require a range of new, electronic components, 'fitting' one to the average car using carburettors is not possible. Industry thus initially quoted very high costs for the adoption of the new technology.26 Ford in the UK opted for a different octane number for unleaded petrol than the rest of the British car industry and some German companies wanted to accept autocatalysts much earlier than others. iii. Uncertainties in Environmental Science27

The relevant science base relates primarily to the broader environmental and human health impacts of NOX. These tend to be assessed on the basis of national data, which was probably poorer in the UK than in Germany in the early to mid-1980s. The evaluation of air pollution science was also much more sceptical in Britain as there was relatively little concern about 'acid rain'. Britain paid little attention to NOX until the mid-1980s and generally accepted a 'disperse and dilution' philosophy for air pollutants longer than Germany. This is judged to have been a reflection of 'environmental' reality as perceived by the public.

Germany accepted more powerful threat images related to air pollution for a variety of reasons. General images of ecological doom were imported from North America in the late 1960s and found a fertile soil for growth in the 'anti-nuclear' Germany of the 1970s.

E J Cutting (Ford U K ), European automobile exhaust emissions - the fifth amendment, in Proceedings o f the Institution o f Mechanical Engineers. Vehicle Emissions and their Impact on A ir Quality, London 1987, pp 43-54. This article not only clearly demonstrates the lack o f an agreed technical data base, but also the optimism o f Ford to create technological superiority for European cars by rejecting catalytic converters. The costs of these have gone down considerably as electronic engine management and fuel injection are now widely used.

The environmental science base is not fully discussed here because it only had an indirect impact on vehicle emission regulations.

2 2 Germany tended to develop its own science base and policies accordingly. In Britain, on the other hand, a well developed science base closely linked to government tended to be used to examine these threats and alleged British responsibility for polluting Europe empirically as well as critically. It often rejected them as either emotional, exaggerated, or unsupported by scientific evidence. In Germany, NOX emissions (about a third of which derive from petrol cars) were very soon implicated in the widely observed forest damage. Expensive abatement action, which the senior environmental bureaucracy and scientific advisers had been advocating since the early 1970s, was quickly perceived as fully justified provided it would not lead to commercial difficulties for the motor industry. While the science base improved considerably during the 1980s, especially in the UK, it remained necessarily controversial and imbued with uncertainties for the most complex problem, such as forest decline.

Uncertainty is intrinsic to complex ecological systems heavily affected by human impacts and will always permit scepticism and differences in assessment, especially when combined with differences in economic and political evaluation. Attitudes and values (and thus the political priorities of governments), rather than the shared rationalities of science and economics, therefore determine national positions. These tended to compel action in Germany (where state owned forests are privately owned and highly valued), while advising caution in Britain where forest damage related to NOX emission is still considered with scepticism and where forests are less valued. iv. The Institutional Base

Three distinct but linked decision-making processes each with its own sets of institutions had to be analysed: two at the national level and the third in Brussels. Each proved to be complex, involved many institutional actors and had to change over time. The actors included not only the national ministries in charge of vehicle emissions, ie the ministries of transport in both countries, but a number of other ministries, especially those with responsibilities for the car industry and air pollution. The nature of these responsibilities and relationships with this industry differed significantly in each country, as did the legal frameworks upon which their regulation was based. In both countries, however, the ultimate decisions on European vehicle emission regulations were taken in Cabinet, but with much broader parliamentary and extra-parliamentary support in Germany.

In principle, lobbies can direct their messages at government, political parties or the general public. The latter two audiences remained much less involved in the UK where most messages were directed at a politically firmly entrenched single-party government and its bureaucracy in Whitehall. In Germany, the political centre was less well defined and the general public, the regions and political parties were the major targets of environmental pressure. The organisation, priorities and lobbying styles of environmental groups also differed in each country and politicians listened to them with different degrees of attention. Industrial lobbying was a major activity in both countries, with various car companies, fuel and components suppliers active because of their stakes either in current strategies or expected benefits arising from future regulation. The pressures which the car industry in particular could bring to bear on the domestic and European regulatory process were of major importance. In Britain, government defended industry's position until faced with a supranational decision it could no longer veto; in Germany the story is much more complex.

23 PART TWO: THE PROCESS OF POLICY FORMATION

The electronically managed, catalyst-equipped higher value-added passenger car will become the mandatory norm in Europe from the beginning of 1993. This section outlines the technical background to the technology choice debate and deals in detail with policy formation in Britain and Germany.

IV THE TECHNICAL BASIS OF THE CONTROVERSY i. Emissions Produced during Combustion

Vehicle exhaust pollutants derive from the burning of fossil fuel in the engine. Pollutants may be a part of the fuel itself, e.g. hundreds of volatile (eg. benzene) and particulate (black smoke) hydrocarbons compounds, or the product of chemical reactions, usually oxidation. Oxidation, combination with oxygen from the air, generates the pollutants carbon monoxide (CO), sulphur dioxide (S02, not significant for petrol) and carbon dioxide, (CO2).

Nitrogen oxides (NOX), which were at the very core of the controversy, form when oxygen in the air combines with the nitrogen which is also present because of high temperatures. The nitric oxide in the engine quickly combines with air and ozone to create secondary pollutants implicated in 'photochemical smog' and plant damage.28 These oxides are now even more firmly linked to harmful effects on the human respiratory system, ozone formation and acidification of soil and water than the were in the early 1980s.

The nature and quality of the fuel, as well as the temperatures achieved in the engine, are also major determinants of the pollutant mix produced. Both are closely related to engine type and behaviour. The mix of pollutants produced depends particularly on the air to fuel ratio of the petrol and air mixture which is burnt in the engine.

A third type of pollutant, e.g. lead compounds, oxygenates, detergents, is added to the fuel for a variety of reasons Lead compounds are added to petrol to boost its octane rating (and hence reduce 'knocking'), and detergents to clean the engine. The substances are later expelled through the exhaust system in altered form. Most exhaust gases are considered harmful to human health, especially in concentrations experienced in congested urban areas. NOX and SO2 are 'acid' gases because they combine with water to form acids; CO2 is a greenhouse gas. This leaves only water vapour as an end product of combustion which is still considered to be harmless.

A fourth type of pollutant (volatile organic compounds, VOC) is emitted as the fuel

28 G J K Acres, 1990, Catalyst systems for emission control, in R Harrison (ed), Pollution; Causes, Effects and Controls, Royal Society of Chemistry, London.

2 4 itself evaporated in the car or during fuelling. It is not considered here, but is now also subject to regulation through the use of carbon filters or canisters.

Many variables determine the production of the mix of pollutants even for the same engine: speed, acceleration (ie. load) and engine temperature. For example, the emission factor for NOX at high speed be twice that of urban travel. (See Figure 1) High speeds in particular require the control of NOX emissions.

Figure 1: The Relationship between Emission Abatement Technology

NOX

without with catalyst

Note: This demonstrates the persuasiveness of the catalyst. In practice, performance declines over time from about 90% to 50% emission reduction. Emissions over short distances as the engine warms up also remain high. Source: Umweltmagazin, May 1985

25 ii. The Issue of Technology Choice

a) The leanbum engine

To understand the controversy over leanbum and stoichiometric engines (the latter are 'conventional' and required for autocatalysts), the impact of the air to fuel ratio on emissions needs to be appreciated. (See Figure 2) The concentration and mix of pollutants produced during combustion is largely determined by the air to petrol ratio because of basic chemistry. At the stoichiometric ratio, the various compounds are present in the right proportion for the fuel to be burnt completely. Only 'harmless' water vapour and carbon dioxide should escape.

Complete combustion is only achieved in an engine which works when the fuel mix consists of 14.7 parts of air to one part of petrol. To maintain this ratio is a major engineering achievement and requires electronic sensors as well as fuel management systems. During the 1970s, however, new engine designs, especially smaller ones, deliberately moved towards using leaner mixtures, ie. less petrol and more air. The result was increased NOX production.

Figure 2: The Effect of Air/fuel Ratio on Engine Operations

Source: Arces, in Harrison (ed), (1990)

26 When the mixture is richer, (as it must be during warm-up or when accelerating even for stoichiometric engines) more HC and CO are formed than can be removed by chemical processes. They are therefore emitted unless removed by 'reduction', ie. combination with hydrogen which may be achieved with the aid of a dual-bed or unregulated catalyst. When the mix is leaner (and as fuel efficiency improves) both HCs and CO, decline as well as engine power, until HC increases again quite sharply and the engine tends to stall. In this situation oxidation converts the HCs into water vapour and C02. The leanness of the fuel is therefore a major factor in the creation of both NOX (which declines rapidly if speed and acceleration remain low) and HCs. The decline of HCs and NOX with increasing leanness of the fuel explains the view that the leanbum engine too is as a major step forward in pollution abatement.

Really significant NOX emissions only take place when the mixture is very lean indeed, around 20 to 1. Very lean engines, however, create new problems because of misfiring. The choice for pollution control is therefore one between three options:

(a) a conventional engine with a fully regulated catalyst (closed loop or three way) to maximize the removal of NOX and HC;

(b) a leanbum engine combined with and oxidation catalyst (to remove mainly HC), or

In theory at least, (a) is the most effective, environmentally and proved to be the German favourite. A combined HC/NOX value became necessary for Britain when (c) proved to be unable to achieve the combined standard.

In Europe, the leanbum engine species was still at the development stage in the early 1980s but had already been abandoned in the USA (but not in Japan) as incapable, by itself, of delivering sufficient pollution reduction. The engines commercially available in the mid-1980s had only achieved an air to fuel ratio of 17/18 to 1 and thus hardly deserved to be called lean. Engineers called them high compression fastbum engines, a type not widely used in Germany, but about to become commercially available in Britain and presented to government as a leanbum engine by Ford and Rover. Unfortunately, it also preferred high octane fuel and hence leaded petrol. Preventing the success of this engine would itself have been a success for its larger competitors.

Improvements in British leanbum technology since the early 1980s remained insufficient to satisfy the 5gm/test combined NOX and HC standard. It most probably could have satisfied the Luxembourg standards and the Small Car ones Stage I (8g/test) with the help of more simple oxidation catalysts and provided that the test cycle was not altered significantly, (See Table 1 in Chapter II for details). The argument that the emission weakness of leanbum should be 'traded-off' by its improved fuel efficiency

27 was strongly made during the debate. However, fuel efficiency was not an issue for the public and manufacturers at that time. Rather than emphasising efficiency, the fastbum engine was in fact being developed to achieve high performance in small and medium sized cars.

The more stringent NOX limits as required under Stage II of the Small Car Directive brought about the downfall of the British leanbum design. With it went the carburettor and any small engine not as yet combined with fuel injection. Car technology would have to underdo a significant sea change.

b) The autocatalvst

The promise of the fully regulated catalytic converter is its capacity to ensure that the fuel-mix for conventional engines is kept at the stoichiometric air to fuel ratio as often as possible. This is done with the aid of an electronically controlled air to fuel management system incorporating the use of an oxygen (the lamda) sensor which continuously monitors the mix and informs the fuel supply system. This is then adjusted, thereby allowing the 'right' chemistry to take place in the presence of catalysts.

In the presence of precious metal catalysts (platinum, rhodium and palladium) inside the 'can' fitted into the exhaust system, very little CO, HC and NOX are produced, ie. levels of over 90 per cent reduction are achieved on the test stand. With the fully regulated device, all three pollutants are minimised.

The following equations indicate the chemical changes taking place inside the converter:

oxidation reduction

2CO + 02— > 2CO2 2CO + 2NO2— > 2C02 + N2 HC + 0 2 — > C02 + H20 HC + NO— > C02 +H2O + N2

The precious metals coating the honeycombe structure inside the can provide the surface conditions across which these chemical reactions take place very fast. However, this process is readily 'poisoned' by lead and some other fuel additives, hence the emphasis on the fuel quality. More tolerant catalysts and improved durability are being developed.

The ideal low emission car would clearly be one which uses all available devices to minimise pollutants, especially during acceleration and engine warm-up, while during cruising, it would use a very lean mixture to reduce C02 emissions and save fuel. The technology of the future therefore combines complex catalytic systems with leaner engines in order to reduce C02 emissions as well. This is not a cheap option and those

28 manufacturers who were fighting for leanbum during the 1980s certainly did not have such combinations in mind for commercial reasons alone. c) Technology choice as politics

A debate over which was 'best', tested but expensive catalytic technology 'added-on' to conventional engines or a cheaper, intrinsically clean and efficient engine type yet to be fully developed, was one underlying cause of the Anglo-German emission controversy because of its commercial implications.

The attractions of leanbum to the British government are obvious given its commitment, during the mid-1980s, to energy efficiency and a low cost environmental policy not directed at minimising NOX emissions. The German car industry, on the other hand, had been persuaded by that time that it was in its own interest to reduce these emissions to the extent that this was technically achievable.

Early in the debate, the British government was told (wrongly in our judgement) that the leanbum engine of the future would reduce NOX emission by 80 per cent compared to 97 per cent achievable by autocatalysts.29 As stated, the actual emissions of NOX depends on many factors and comparisons are difficult to interpret because of the different baselines/ engines/ mensuration techniques that may be used. 'Facts' therefore became a playground for policy advocacy.

The ambition to create a cleaner and cheaper European emission reduction system was a genuine one and deeply felt throughout Europe.30 The mechanical engineering profession in particular supported the leanbum engine. Others were more readily prepared to accept the help of the chemical engineer, precious metals and new electronic components. The suppliers of these components, like Bosch and Johnson Matthey themselves became interested parties and hence important 'actors' lobbying the political system which was formally responsible for the decisions.

The European car industry itself was deeply divided and in the early 1980s generally favoured the leanbum option. Later the supporters of the leanbum engine, (including VW) realised that the British government was their most reliable ally and lobbied it intensively. The message given to the British government in 1984/1985 by industry, that there had

29 Evidence by M r E J Cutting (at that time working for Ford) for the SM M T. He explained 'That is worst against the best' and argued strongly against catalysts. His view was very influential in Britain, House of Commons Environment Committee Session 1983-84, Acid Rain, Minutes of Evidence 18 June 1984, p.182. 30 Interviews with engineers from Ford, Opel, VW , Porsche, BMW , Rover and BM and other smaller firms, mainly undertaken in summer 1989. Daimler-Benz declined to be interviewed.

29 to be a choice between leanburn engines and fully regulated catalysts, has nevertheless been described as fiction. The two can be used in combination, but only at considerable cost. The claim that it had to be one or the other was not therefore a technical one, but related to commercial competition. At one level, Ford and General Motors were continuing their struggle for market shares in Europe.

It was also noted that much of the pioneering research and the R&D basis for the autocatalyst was undertaken by the individuals employed by organisations either already committed to clean technology (eg. UBA, the Dutch government) or standing to gain by it commercially, eg. Johnson Matthey. Policy and interest helped to create new knowledge through targeted R&D which in turn moved the regulatory debate along.

30 V GERMAN DEVELOPMENTS 1970-1990 i. Introduction: Cabinet Promises

German developments need to be traced back to the early 1970s when the original policy orientation - to follow the American and Japanese example - was laid down. In July 1983 the Federal Cabinet decided to register, from the 1st of January 1986, only new cars with fully regulated catalysts. In making such a statement of intent, it did not say something very new but in contrast to Britain, such a 'decision' does not automatically become government policy. It merely expresses an intention which government hopes to translate into policy provided it can gain sufficient parliamentary support. This was not fully understood in Britain.

Why and how was the 1983 Cabinet decision taken? What were its impacts in Germany and Europe? One stumbling block to this policy proved to be EC membership, which requires that national legislation for vehicle emissions must be based on EC directives, the other was parliament. In order to turn the decision of 1983 into policy, it first had to be accepted by both Houses. ii. 1970 -1974: Antecedents a) History and perceptions

As a result of early environmental initiatives, the Federal government took from the Länder significant new legislative powers for the protecting the environment, especially for air pollution control.31 Given the appropriate political opportunities and economic conditions, government was enabled to adopt and pursue environmental policies based on the best available technology. This goal had to be pursued, however, without threatening, in the words of the Association of the German Automobil Industry (VDA), the car as 'a symbol of individual freedom and independence, of our wealth and economic power'.

Two cultural factors made the acceptance of active emission abatement relatively easy in Germany. Firstly, there is the tradition which perceives environmental damage less in terms of understood effects than as a physical burden or stress (Belastung). Pollution lies in the quantity of pollutants emitted and in making dirty (Verschmutzung) rather than in observed damage effects in the environment, as tends to be the British tradition.32 Pollution abatement for exhaust gases was soon described exhaust gas

31 S A Boehmer-Christiansen and J F Skea, 1991, Acid Politics, Belhaven, London, chapter 6.

32 This quantity approach makes the measurement of pollution and hence abatement 'success' easier and also appeals to bureaucrats and polticians rather than scientists. But note the full German title of the A ir Quality Act of 1974 in note 9 below.

31 detoxification (Abgasentgiftung) and justified with reference to saving the forest. Secondly, German perceptions also differed in that catalysts, by not being compared with a future engine design, were not seen as involving a 'fuel penalty'. Rather, the German government advocated as a means of improving fuel efficiency, citing in support declining fuel consumption in both the US and Japan after their introduction.

Early German efforts to promote the abatement of vehicle emissions were not based on popular demand, but on initiatives by senior administrators and politicians influenced by events in the United States. These efforts led to the wide acceptance of the idea of environmental protection (Umweltschutz) as an important and independent policy goal and, in contrast to events in Britain, to the development of ambitious environmental programmes by political parties, beginning with the small Liberal Party (FDP) and the Christian Democratic Union (CDU) in the early 1970s.

Environmental protection immediately gained widespread popular support in both the media and among citizen groups. Many of such groups were formed during the 1970s in order to encourage the implementation of environmental promises against considerable opposition from industry and, somewhat later, government itself. While responsibilities for federal environmental protection where shared among several ministries, the powerful Interior Ministry (BMI), at the time in the hands of Hans- Dietrich Genscher and supported by Chancellor Willy Brandt, played leading supportive roles.

The Federal Environment Office (UBA) was set up in 1971, and provided an expert advisory body for the BMI and, later, the Environment Ministry (BMU). It is able to challenge environmental information received from industry and sees the environmental movement as part of its constituency.

The first government environment programme was adopted in 1971 and included most of the major principles and commitments upon which German environmental policy has since been based. The underlying assumption is that harmony between the goals of environmental protection, technical progress and economic growth are possible. One practical expression of this was a promise

"...to reduce in steps and by 1980 the pollutants emitted from vehicles with petrol engines to one tenth of their 1969 average."33

This proposal had been worked out by a BMI working group concerned with 'Verkehr' (transport and communications) in 1969 with the participation of industry. It was recognised that the 90 per cent reduction would depend on the availability of unleaded petrol and on an as yet immature technology, catalytic conversion of exhaust gases. The Interior Minister, Mr. Genscher, told the Bundestag in 1971 that the aim was to create 'in the near future' the conditions for the use of catalysts.

33 Aus dem Umweltprogramm der Bundesregierung, in Winzer, op cit p.62

32 The highly influential German Secretary of State for the Environment at the Interior Ministry, Günther Hartkopf defined the relationship between state, environment and economy as follows:

"Environmental protection provides industry and business with a framework for orientation. How individual problems are solved within the confines of technical feasibility remains the decision of the responsible entrepreneur."34

It was realised from the start that the success of this policy depended on cooperation with industry, but the state accepted its responsibility to ensure that improved environmental protection would not weaken the competitiveness of the German economy. The instruments, according to Hartkopf, were to be specific measures such as fiscal incentives and R&D funding, especially for the development of new technologies.

After the announcement of the ambitious 1971 goals for emission reductions, the car industry at first showed few signs of wanting to assist government in their implementation. The goals were, however, strongly supported by the government- appointed Council of Experts for Environmental Issues ( the Rat der Sachverständigen für Umweltfragen, SRU), which has remained a major adviser to government on environmental matters.

In 1972 experts from the oil and car industry met with representatives from three ministries (Interior, Economic Affairs and Transport) in Baiersbronn in the Black Forest to define the average emission behaviour of vehicles in 1969 as the baseline from which to measure progress. The numbers which were agreed on the basis of information from industry, according to later UBA reports, significantly overestimated actual emissions. This was later interpreted by the Berlin Environment Office (UBA) as an attempt by industry to weaken forthcoming regulations by making subsequent abatement achievements look more positive.35 Industry claimed at Baiersbronn that it could achieve 80 per cent reductions without catalysts and without unleaded petrol, arguments still heard in Britain in 1985.

These early BMI/UBA efforts to introduce autocatalysts did not succeed, nor did other attempts fully to develop an emission abatement policy in the latter part of the 1970s. Reliable data about emissions were still lacking and it was by no means certain what a 90 per cent reduction in the laboratory actually meant for engineering. Ties with other European firms made German companies only too aware of the opposition to 'American' technology, (including precious metals from South Africa and USSR), and

3 4 ib id .

35 U B A R e p o rt, 7 /7 6 ,

33 of its cost implications. b) The legal base for activism

The legislative framework for action to curb gaseous emissions was created during the 1970s. In the early 1970s government could already regulate emissions through the amended Road Transport Act (Strassenverkehrsgesetz) of 1952 and the road transport licensing order (Strassenverkehrs-Zulassungsordnung) which together empower the Federal Ministry for Transport (BM Verkehr) to set emission limits for vehicles and alter the financial requirements of using public roads. Early ECE and later EC limits are implemented through these regulations. The Lead in Petrol Act (Bezinbleigesetz) of 1971 and 1975 ensured the phased introduction of low lead petrol. This responsibility was entirely with the BMI.

The legal base for the setting of 'technology forcing' emission standards was further strengthened in 1974 with the adoption of the Federal Immissions Control Act (Bundesimmissionsschutzgesetz, BImSCHG).36 Last amended in 1986, this gave the BMI co-responsibility with the BMV. This did not prevent conflicts between the two ministries about the sharing of responsibilities, but for vehicle emissions BMI managed to 'hold the pen'. This contrasts with the British Control of Pollution Act (COPA) of the same year which had nothing to say on gaseous emissions and which kept vehicle emissions the undiluted responsibility of the Transport Ministry.

BImSchG part IV, deals specifically with the construction and use of mobile sources on road, rails, as well as in air or water. It refers to international obligations and empowers regional governments to restrict traffic during certain meteorological conditions and even requires drivers not to let engines idle unnecessarily. Consultation is defined more widely than in the British legislation as 'beteiligte Kreise' (ie all interested parties compared to British requirement to consult only the motor industry), and the consent of the Federal Council (Bundersrat), as well as of the Bundestag, are required before government can introduce new regulations. Paragraph 38 empowers both the BMV and BMI ministers, after listening to these 'Kreise', to propose regulations (Rechtsverordnungen) with the consent of the Bundesrat for the construction (Beschaffenheit), equipment (Ausrüstung) and testing of mobile sources. The setting of future emission limits taking technical developments into account is specifically permitted. Probably also significant for comparative purposes was the less direct involvement by the BMWi. None of the German car oligopoly (Daimler-Benz, VW, BMW, Porsche, Audi, Ford and Opel) were nationally owned by the end of the 1970s and, during the early 1980s at least, the FDP-led BMWi was in a relatively weak political position.

36 Gesetz zum Schutz vor schädlichen Umwelteinwirkungen durch Luftverunreinigungen, Geraüsche, Erschütterungen und ähnliche Vorgänge (lit: Act to achieve protection against air impurities, noises, vibrations and similar processes),BImSchG, of 15 March 1974, in force from 1.1.1982, Federal Law Gazette (BGBL) III 2129-8.

34 In 1974 the international legal dimension was already firmly on the agenda. The VDA demanded what the European car industry has called for ever since, uniform international regulation as a precondition for the effective reduction of polluting emissions.37 The stage was therefore set as early as the mid-1970s for both domestic and EC political battles over vehicle emissions. The 'battle' is described in four stages emphasising domestic events but with reference to developments in Brussels. There is therefore some overlap with Section I. After 1985, German policy was constrained by decisions made in Brussels. iii. 1974 - 1981: Persuasion succeeds for Low-Lead Petrol38

The first step towards the goal of emission abatement was taken by 1974, when the lead content in petrol was reduced first to 0.4 g/1 (1974) and 0.15 g/1 by 1976. As in Britain later, these changes were taken with reference to human health. Industry remained opposed any further changes in lead content on the basis of arguments heard in the UK until 1989.

The oil industry had accepted the introduction of low level lead by 1976, provided the government would delay its plans to introduce unleaded petrol until the end of 1982, a compromise which was accepted by the BMI. In spite of this agreement, the introduction of unleaded petrol was not entirely welcome to industry. Both the oil industry and the Bundesrat criticised the proposed legislation, but from opposing positions. The Federal Council thought the timetable for the introduction of unleaded petrol too permissive, while the oil industry warned of higher refining costs and would have preferred more time. The industry implemented the German legislation reluctantly, claiming that it would lower the anti-knock properties of petrol, a claim which the car industry and the car lobby in general echoed, but which government experts could refute with reference to the industries' own research efforts. Government was also supported by SRU with reference to research done abroad, including in Britain.

The industry's claim that there would be a shortage of unleaded petrol was also refuted on the basis of BMI research. In its reply to the oil industry, government stated that it considered the needs of environmental protection to have priority over economic consequences. The oil industry is not, afterall, a German industry, again in contrast to Britain where the industry manufacturing lead additives put up a sustained fight against unleaded and even low lead petrol. In Germany, powerful institutions acted to widen

37 VDA Annual Report 1973/74, Frankfurt a.M. 1974. p.33.

38 The following is based on Winzer, op cit, and Westheide, Die Einführung bleifreien Benzins und schadstoffarmer PkWs in der BRD m it Hilfe ökonomischer Anreize, Erich Schmidt Verlag, Berlin, 1987, and a detailed study of the lead legislation in Britain by D Collingridge, The Social Control of Technology, Pinter 1980, Chapter 3, and L Hooper, The regulation of lead levels in petrol, Essex Papers in Politics and Government, March 1987.

35 rather than narrow the political opportunity structure (Handlungsspielraum) of the BMI. On the lead question, the German government experienced a smooth and problem free transition to low lead petrol between 1972 and 1976. This gave Germany a major psychological advantage in the introduction of catalysts.39

The European Commission, however, was not happy with the German legislation and argued that the 'Bleigesetz' was in breach of a 1969 agreement not to erect trade barriers. It called for delayed implementation, but Germany refused with reference to public health considerations, a strategy which would provide a possible model for vehicle emissions a decade later. The EC then joined the German effort by introducing a draft directive to reduce the lead content of petrol to 0.4 g/1 from 1976 and to 0.15 g/1 from 1978, but for regular petrol only. The car industry had expressed fears about the creation of extra costs for car producers selling in non-uniform markets, arguing instead for compliance with the draft EC directive.

During this episode and for low lead petrol only, government had been prepared to abandon consensus. The financial impacts fell largely on the oil industry, impacts on the car industry were minor and less so than they would later be in Britain. For gaseous emission abatement, the costs would have to be bom directly by a German industry and a new set of factors therefore influenced the negotiations with industry over gaseous emissions. In Britain, both costs and their impacts would have directly affected national industries.

The second half of the 1970s is generally considered to have been a period in which German environmental policy stagnated.40 Until 1981 at least, there was little change in government-industry relations on the emission issues. Consensus politics dominated, government did not dare a major conflicts with the car industry. Economic recession, internal security problems and the energy crises have been blamed. Environmental protection came to be perceived as a break on economic growth, although legislative, media and research efforts in its support continued unabated.

The German car industry did not even support the change to ECE regulation 15-02, apparently worried already in 1975 that add-on devices would be needed to reduce NOX emissions. By 1977 it had changed its mind, however, and appeared to support the UBA proposal to the ECE provided a five year period was allowed for its adoption and increased costs of 20-30 per cent were considered acceptable, demonstrating the reluctance of industries to agree to technical limits which are not as yet part of current technology for fear of taking commercial risks.41

39 The German government was clearly not dependent on expertise from industry and this 'victory' over industrial knowledge is judged to have been an experience which the British Government lacked. 40 E Muller, 1986, Innenwelt der Umweltpolitik, Opladen. 41 VDA Annual Report 1977/78, p 39.

36 In 1977 Herr Hartkopf confirmed his support for the 1970 emission reduction target, but expected that these could be reached without further changes in petrol quality, ie. without catalytic converters. He agreed that unilateral changes in emission standards would not be acceptable because of trade impacts Germany could not afford.42 By 1977 about one half of German cars were sold within the EC and the demand for uniformity of standards grew stronger.

But NOX emissions kept on rising even though weak NOx control standards came into effect under ECE 15-02. UBA has argued that these values were so lax that the industry had to make no extra effort to comply. Together with Switzerland, Bonn then tried to obtain tougher limits through the ECE, but failed. The idea of a combined NOx/HC test was accepted, however, as well as a new measuring system for these emissions. Both became the basis for ECE regulation 15-04. There was no attempt to adjust these values to catalytic methods as unleaded petrol was not yet available. Towards the end of the 1970s, Germany therefore also looked towards the genuine leanbum engine as a means for reducing both emissions and fuel consumption.

In 1978, an EC lead directive was adopted and it became illegal to import unleaded petrol, thus making German unilateralism on this issue more difficult. In 1979 the car industry experienced a recession and began looking for ways to improve the demand for cars. Being labelled the environmental villain number one, as claimed by the BMI Minister Herr Baum at that time, would not help the car's image in difficult times. iv. 1981 - 1983: 'Waldsterben' and the 1983 Election

Typically for the German decision-making process, wide-ranging discussions between the coalition partners and with society follow rather than precede legislation. The emission reduction benefits of speed limits, technology, the legality of unilateral action and the nature and extent of economic support for low emission vehicles were all subjects of open controversy widely discussed in the media. Ministers and senior public servants, spokesmen for industry and environmentalists were disagreeing with each other openly, and a complex 'game' of persuasion, education, as well as threats and counter-threats began. The following describes this process in some detail to show how the educated reader would have experienced this decision-making process.

Until 1982 the arguments of the German car industry against catalytic converters and its associated problems and costs still differed little from those heard in Britain, although the breaking of ranks, behind an official front of unity, was beginning. As political parties battled over the environment, the German public was increasingly taking the 'green' side and, not surprisingly in the light of history, awareness was stimulated by government rhetoric and legislation.

42 Umwelt, no. 59, BMI, Bonn, 1977, p 6-8

37 A change in political conditions then reawakened environmental policy and brought about a mobilisation against industry. Green Parties had grown up at the Lander level during the 70s and were now threatening to take votes from other small parties even at the federal level. The federal Green Party had done well in the European election and was expected to do much better than it actually did in the 1981 general election.

In 1981 the Federal Interior Minster, Herr Baum, returned vehicle emission abatement to the agenda, making it a central task of official environmental policy. He had already decided that this goal was not in conflict with that of improving fuel efficiency. Industry, already complying with foreign regulations in order to export to Sweden and the USA, was expected to follow. Germany began to see itself increasingly as leading Europe in 'environmental awareness'.43

In July 1981 he met with representatives of the car industry for the consultations about the reduction of exhaust emissions. It was agreed that voluntary reductions in keeping with ECE 15-04 would continue and that industry would try to further reduce these emissions keeping in mind the need for improved fuel economy. The harmonisation of such limits in the EC would remain the government's goal.

Later that year Bonn tried again, on the basis of the 1977 UBA proposal, to achieve a tightening of these emission standards at the ECE and EC level by 1985/86. It did so in spite of German industry's claim that these proposals were not achievable at the current state of technology. However, this was disputed by BMI experts. Industry and government then agreed to discuss this in a joint expert commission. The precise nature of the 1981 proposals to the European Commission was still being discussed when forest die-back (and re-armament) captured media and public attention. The green movement saw its worst case scenarios of approaching ecological catastrophe confirmed. Angst acted as lubricant of politics and policy.

The German government began to threaten unilateralism, ('Alleingang') in the adoption of stringent emission limits in Europe. It was an option widely supported by environmental groups. In 1980/1981 the justification given was still the interest of human health, but this was soon to change.44

The SPD/FDP coalition government lost power in the autumn of 1982 on the basis of a non-confidence vote after they FDP had decided leave the coalition. A Bavarian Lawyer and close associate of the late Franz Josef Strauss, Dr Friedrich Zimmermann, replaced Herr Baum in the Interior Ministry. The new, as yet unelected coalition government of Christian Democrats (CDU), Christian Social Union (CSU) and Liberals

43 For example, Reports of European opinion polls reported in Umwelt (BM U), No. 91, 1998 p.3; also Boehmer-Christiansen and Skea, op cit. chapters 4 and 5

44 BMI, Umwelt, no. 81, 1983 p.5

38 (FDP) now had to prepare itself for a general election in early 1983. The Green Party was preparing for jumping the 5 per cent hurdle and enter the Bundestag.45

Environmental protection soon formed a major policy platform for all parties. It was well known that the environment would attract voters and that the CDU and CSU were considered vulnerable in this policy area. All political parties now proposed strategies to save the forest. In mid 1992, Germany ceased supporting Britain in opposing Scandinavian demands to reduce acid emissions.

In November 1982 and again in early 1983, Dr. Zimmermann expressed his full agreement with his FDP predecessor that vehicle emissions needed to be reduced drastically. The FDP, also in charge of the Economics Ministry, was in a relatively weak position after the 1983 elections and the Minister himself, Graf Otto Lambsdorff, politically vulnerable and thus unable to press the interests of industry as hard as he might have. The BMI, on the other hand, began to skilfully use the problem of the German forests, which had been apparent to scientists for some years, to justify emission policy. If at all possible, emission should be reduced through uniform standards set in Brussels.46 The VDA now realised that the situation was becoming serious. The Greens were seen as having an effect on the BMI minister and the ruling coalition. By the end of February, as the March 1983 general elections was approaching, Bonn announced that a tightening of vehicle emissions was one of its measures designed to protect the forests. While no formal discussions had as yet taken place with the VDA, the Bavarian government had already informed the Interior Minister about its consultation with BMW, the 'up-market' Bavarian car producer. BMW had advised that the acid emission problems could be solved with the aid of autocatalysts. The good name of the German industry was at stake.

In March 1983 BMW called for the introduction of unleaded petrol and US emission limits in Europe. Also in March, the Kohl government was confirmed in Office and the Green Party entered the Federal Parliament.

NOX emissions as part of 'acid rain' had already been linked scientifically to fresh water damage throughout Europe and hence encouraged international agreements to combat air pollution. Acid rain, and especially its alleged responsibility for the ill health of the German forest, now allowed Bonn to take its vehicle emission proposals to Brussels with some hope, at last, of pushing European industry towards better technology and global competitiveness.

In April 1983 the BMI minister and industry met again, this time with senior representatives from both the car and oil companies. The possibility of unilateralism

45 ibid, no.95, p.20, see also Boehmer-Christiansen and Skea, op cit, chapter 10 for more detail on the politics o f this period.

46 BMI, Umwelt. No 95, p 20.

39 was rejected because Germany expected to be able to get its way in Brussels. Dr Zimmerman expected the progressive improvement of catalyst technology in order to dispel fears about its unreliability.47 Industry agreed to this, but insisted firmly on European regulatory uniformity and warned of the increased costs the new technology would involve. In Munich the official use of three way catalytic converters in a number of test vehicles began in early 1983. In Hessia and NRW, tests took palace under UBA auspices in 1984.

In June 1983, two days before the annual gathering of the CSU, Dr Zimmermann announced that he would make proposals on the introduction of unleaded petrol and the registration of only new vehicles with threeway catalytic converters from 1986 to the Federal Cabinet. With the full support of his party, the Bavarian CSU, the small and large forest owners of Southern Germany and the Federal President (depressed by a much publicised hike through sickly forests), Cabinet accepted the Zimmermann proposal unanimously in July 1983. Only the Transport Ministry (BMV) argued for delay in the introduction of US emission standards. As pointed out, the 1983 decision was no more than a statement of intent and now needed to gain the support of both Houses of Parliament.

Some ministers soon came to regret their support for the 1983 decision because of EC legal problems, the implications of which soon persuaded Dr Zimmermann to propose economic incentives to overcome the continued opposition of industry.

In the meantime, at the EC Commission, the Luxembourg Compromise (see Chapter II:) was emerging based on US equivalent emission limits, economic incentives to be approved by the Council of Ministers, and the idea that only large cars should have to comply with standards requiring fully regulated converters. These positions were not yet acceptable to the German government. This had to wait until early June 1985. Major domestic battles preceded this compromise and laid the foundation for future developments. v. 1984 - mid 1985: Confrontation in Europe: Unilateralism or Speed Limits? a) Events and decisions

After the 1983 Cabinet decision, the BMI faced the difficult task of convincing Europe that Germany was determined to win its case, even though government understood that its real aim was to gain maximum concession in return for a rejection of unilateral action. Bonn could not afford to turn the powerful auto industry into an enemy at home.

47 BMI, Umwelt, no.94, 1983, p.16

40 Three related issues were widely debated before the 'final' decision in Brussels in June 1985: unilateralism, economic instruments (meaning subsidies to car buyers) and speed limits. All three proved to be useful bargaining counters. As decisive EC negotiations were approaching and the German government had to handle domestic as well international negotiations simultaneously, it began to speak with several voices. Government statements addressed either European institutions, the public or German industry. They reveal a fierce, confusing but very public debate about the pros, cons and means of unilateralism, about alternative ways of reducing vehicle emissions and the best way of persuading industry itself to challenge the European opposition to the introduction of mandatory standards requiring 'best available technology'. In fact, Bonn was now seriously preparing to shift from mandatory regulation to a regime of fiscal incentives. The car industry itself, and employment, were to benefit.

In January 1984 Cabinet decided to support the idea of fiscal incentives for low emission cars in principle, but the issue remained controversial. The BMI intensified its public campaign linking 'Waldsterben' directly with vehicle emissions. For example, when visiting the TUV North Rhine Westphalia, Herr Zimmermann listed the harmful impacts of vehicle emissions on forests, buildings, monuments and human health. He promised to work hard to ensure that US standards would be accepted in the EC and announced that the oil industry had already given assurances that it could provide both regular and super unleaded petrol from January 1986. Government would soon decide on the details of its fiscal incentives.48

Not surprisingly, in March more than half the people asked in an opinion poll for the BMI considered the combating of air pollution to help the forests as most urgent. Fifty per cent of car owners declared their willingness to pay more for a cleaner car, eighty per cent if tax relief on its purchase were granted. Also in March, the organisations concerned (oil, cars, suppliers, the ADAC and government) agreed on a DIN standard for unleaded petrol (91 RON for normal, 96 for super). The change over in the distribution system and the refitting of petrol stations had begun.

This period was a particularly busy one for UBA. Its technical experts were revising the applicable emission regulations to ensure the introduction of US limit values (2.1 g/km CO; 0.25 g/km HC and 0.62g/km NOX) and to adjust the driving cycle to real driving behaviour. UBA had to expand its technical information base on a large number of matters, such as the improved quality control of serial production and the durability of autocatalysts, subjects under discussion at least since 1982.49 TUV Rhineland, asked to generate an emission scenario based on BMI proposals, concluded that a reduction of NOX emissions by 20 per cent between 1983 and 2000 should be achievable.

48 BMI, Umwelt No 101, 1984, p.7

49 UBA Annual Report 1983. Berlin, 1984, pp.53-54

41 In May 1984 the motorists' association ADAC called upon industry to support government policy requiring unleaded petrol and catalysts from 1986. Thus strengthened, the BMI intensified its public attacks on the car industry by appealing to the public for support. A first success came when the EC Commission accepted the introduction of unleaded petrol as a Community goal, but its proposed time table for gaseous emissions regulation (1989-1991) was felt to be far too dilatory.50 Government expressed its determination to persuade the EC of its error, but Cabinet remained divided on the question of whether to go ahead unilaterally.

The threat of doing so certainly played a role prior to negotiations with, in mid-1984, the CSU publicly supporting the idea, but the FDP opposing it. Foreign Minister Hans- Dietrich Genscher is reported at that time to have opposed unilateralism (which was promoted by Dr Zimmermann), although one year later, as negotiations approached their climax in Luxembourg, the positions of the two men were reportedly reversed. Dr Zimmermann himself later claimed that his 1984 proposal to the Commission was merely intended to activate European negotiations. Germany's bluff about going it alone was indeed called in Luxembourg, although the Bundesrat itself continued to support unilateral mandatory measures until 1986, thus acting as a major pressure on Cabinet and Parliament to continue their efforts in Europe.

After much debate, fiscal incentives were agreed in principle, the amount of tax relief to be directly related to emission behaviour as indicated on the vehicle documents. Table 5 shows government's concept of how a graduated system of economic incentives might work, indicating that considerable tax exemptions were invisaged over a three year period. As mentioned earlier, this met with considerable opposition in Brussels and the concessions accepted there were not only reduced, but would apply to all cars conforming with the Luxembourg standards until these were to become mandatory.51

50 BM I, Umwelt No 103, 1984, p.35; also UBA. Annual Report 1985. Berlin 1985, p 53.

51 B M I, Umwelt no 104, 1984, p 17. An even more complex system based on seven categories of vehicles was worked out in 1985 to include retrofitting. For details see H Westheide, op cit.

42 Table 5: Fiscal Incentives (in DM) for low emission cars: the Federal government's Concept of 19/9/1984

Capacity exemption period exemption period exemption period (ccs) 1/7/85/86 1987 1988

yrs mths gain yrs mths gain yrs mths gain

1.000 10 2160 7 6 1620 5 1080 1.100 10 - 2370 7 6 1777 5 - 1185 1.200 10 - 2990 7 6 1942 5 - 1295 1.300 10 - 2800 7 6 2100 5 - 1400 1.400 10 - 3020 7 6 2265 5 - 1510 1.500 9 4 3024 7 - 2260 4 8 1512 1.600 8 9 3018 6 7 2271 4 5 1523 1.700 8 3 3027 6 2 2263 4 2 1529 1.800 7 9 3006 5 10 2263 3 11 1519 1.900 7 4 3006 5 6 2255 3 8 1503 2.000 7 - 3024 5 3 2260 3 6 1512 2.100 6 8 3028 5 - 2265 2.200 6 4 3000 4 9 2236 2.300 6 1 3017 4 7 2273 2.400 5 10 3021 4 5 2207 2.500 5 7 3015 4 2 2250 2.600 5 5 3038 4 - 2224 2.700 5 2 3012 3 10 2234 2.800 5 - 3020 3 9 2265 2.900 4 10 3025 3 7 2243 3.000 4 8 3024 3 6 2268 3.100 4 6 3010 3 4 2230 3.200 4 4 2994 3 3 2245 3.300 4 3 3026 3 2 2254 3.400 4 1 2997 3 1 2263

Source: Environment Europe No. 2218 (1984)

Agreement was reached on these incentives in Cabinet just prior to Luxembourg, but could not be implemented in law until Brussels had consented. In July 1984 Cabinet confirmed its intention to quickly introduce unleaded petrol and made major concessions to the Zimmermann plans. It held on to its intention to insist on 1986 as the date for mandatory autocatalysts and decided to change the vehicle licensing and taxation legislation accordingly.52 The proposal was 'to bribe' both consumers and

52 Bulletin of the Federal Government , 13.11. 1984, no.138, p 1221, also UBA Annual Report 1983, Berlin 1984.

43 industry not only with economic incentives, including tax relief, but also with direct subsidies for the purchase of low emission vehicles, low at this stage meaning compliance with US standards. Cabinet would not implement the 1983 decision, however, because not enough information was as yet available from Brussels.

The core of this proposal was a limited period during which low and reduced emission cars would have to pay a graduated, reduced road tax. From December 1984, vehicles were to be tested annually, diesel and 'cat' cars excluded. The incentives for the individual motorists were clearly to be maximised.

UBA experts underpined Cabinet decisions by challenging the data provided by VDA on the costs of catalyst equipped cars. These were considered to be considerably exaggerated. Government experts were able to give their reasons : the VDA figures were applicable to very large cars only and replacements costs had been included.53 This contrasts with Britain where, to our knowledge, government accepted the figures provided by industry rather uncritically.

In mid-October the Federal government decided on a 'concept' to introduce the low emission car in two stages.54 Firstly, there was to be a system of tax incentives coming into force from the 1 June 1985 and secondly, from 1988/89, the mandatory adoption of stringent standards in harmonisation with Brussels. Draft legislation to this effect, based on a submission from the Finance Ministry, was accepted by Cabinet in November.

Also in October 1984, renewed discussion began in Brussels which Bonn entered with a demand for mandatory standards by 1989 or else. Not surprisingly, little progress was made. Zimmermann held bilateral meetings with the governments of France, Italy and Britain in which general agreement was reached only on unleaded petrol. Britain made some concessions, however, it put forward the oxidation catalysts in combination with the leanbum engine.55 Having been pressed on the speed limit issue as a faster and cheaper way to reduce NOX emissions by the Green Party and UBA, the government also decided to run a major test lasting almost one year on an stretch of autobahn. The aim was to measure the reductions that could be achieved by TEMPO 100, ie. a speed limit of 100km/hr. The concern about forest die-back in Germany remained intense, with government reports stressing its continuing spread.

In October Economics minister, Herr Bangemann took German proposals to Brussels in the form of a memorandum, and in December 1984, not having received further

53 For detail and the role of UBA in general, see K Becker (UBA), Der weite Weg nach Luxemburg, Berlin, 1988

54 Umwelt No 104, 1984, p. 17

55 Umwelt No 107, 1985, BMI, Bonn, pp 56-57

4 4 support from Italy and France on gaseous emissions (with catalysts acceptable only for large engines) or on unleaded petrol availability (only from 1989, not from 1986), Zimmermann is reported to have broken up an EC meeting of environment ministers. Nevertheless, in December the EC Council agreed to the introduction of unleaded petrol from 1989. Support for the German position, on the other hand, now came from the European Parliament when it voted one week later for the introduction of unleaded petrol in 1986 as well as more stringent emission standards from July 1986! A mandatory speed limit on motorways and trunk roads was also rejected. Debates continued throughout Europe, but the European Parliament's opinions at this stage had little influence.

In January 1985 the CSU blamed both the Chancellor Helmut Kohl and the Finance Ministry for failing society and the forest on the question of catalysts. Cabinet once again debated the complex system of tax incentives for low and reduced emission cars and the Federal Council was urging changes to encourage retrofitting of old cars. Diesel cars now entered the debate, their sales were increasing rapidly.

In early February 1985, the Commission of the EC published new proposals on timetables but remained opposed to catalytic technology for small and medium sized cars. In March 1985 the Bundestag also agreed that tax relief for catalyst cars was to begin on July 1 of that year and the competitiveness of unleaded petrol was to be further improved. From April 1 an annual emission test for cars other than those defined as 'low emission' was to be introduced.

While Germany tried to win support for its views abroad, opposition to the introduction of unleaded petrol remained strong, except in Britain where for largely domestic political reasons, a policy change seemed opportune. In March both countries succeeded in obtaining a promise from EC partners that this fuel would soon become available throughout the Community. Catalyst cars would then be able, in principle at least, to cross national frontiers and the popularity of diesel cars dampened.

Later in March the EC Council issued its directive introducing unleaded petrol from 1989; national measures could be taken to encourage its uptake. The octane quality of this was fixed above the German normal unleaded at RON 95, a concession to engine types predominating outside Germany. However, different octane numbers were not ruled out, which explains why in Germany three types of unleaded petrol are now available compared to two in Britain. The German timetable for mandatory catalysts was seriously delayed however.

A little later in June 1985, in Luxembourg, the Council of Ministers finally accepted a concept put forward by the Commission with the help of industry ERGA relying on its experienced working groups. This involved dividing passengers cars into three classes on the basis not of their weight (as had been customary), but of engine size and thus the expected costs of conversion to catalytic technology, (see Table 2). Each class was to have different emission standards, which together would be US equivalent in their

45 effect. Large engines would have to comply with the toughest standards, small cars with the most lenient. There was hope for leanbum yet, but only in the lower two classes! Limited economic incentives were to be allowed for all cars complying ahead of time with these 'Luxembourg' standards. However, a new test cycle was to be negotiated in future. While only limited incentives were agreed (which benefited many more cars than Germany had expected), there would also be further negotiations on small cars, the issue over which concern in Germany was still strong and where technological improvements held out much promise. The prospect of a Europe increasingly addicted to dirty small cars rather than clean, large ones had little appeal.

The final 1985 decisions were taken a few days before relevant German legislation would enter into force. Germany now needed almost any decision. It wanted the green light for the mandatory introduction of stringent emission standards for large engined new cars by 1 January 1988 and for tax relief becoming permissible for low emission cars from 1 July 1985. It received neither.

As the June meeting was approaching the German debate revealed the large number of actors and deep commitments involved. Viewed through the German press, a battle appeared to be raging in Brussels about the very future of the European and German car industry, as well as European forests. Herr Zimmermann repeatedly threatened unilateralism, but promised that there would be no speed limits. The Parliamentary Secretary of State for the BMI Herr Spranger told the CDU that the federal government was increasingly interested in including 'market-economic' instruments into its environmental policy in order to maximise efficiency, performance, individual responsibility and freedom.56

As official news about the forest had remained gloomy, a chorus of voices again called for the introduction of speed limits on major roads, but Die Zeit predicted that Germany would have to adapt to the slow speed of Europe.57 Growing excitement and unhappiness prevailed as a meeting in Brussels approached, industry again loudly raising its voice against unilateralism. Germany was warned of paying no attention to the interests of other countries and 'dass Europe nicht am deutschen Wesen zu genesen denkt,' (that Europe did not dream of curing itself the German way).58

As the EC negotiation continued throughout the first half of 1985 Herr Zimmermann travelled again to European capitals in search of support, but continued to experience hostility and allegations of self-interested dogmatism, arrogance and hysteria. Criticism

56 Umwelt No 7, 1985, BMI, Bonn, p.l

57 Die Zeit. March 29, 1985. See also F Vahrenholt (ed.), 1984, Tempo 100: Sofort Hilfe für den W ald?, Spiegel Buch, Spiegel Verlag. Herr Vahrenholt worked at UBA between 1976 and 1981, and then as a senior environmental public servant in Hessia and Hamburg.

58 ib id , D ie Z e it

46 of his tactics and assumptions were increasingly heard. German policy clearly had to change, and such a change be justified to an alarmed public.

Even before the special March 20 meeting, Finance Minister Stoltenberg let it be known that Germany was ready for compromise on timetables for emission standards and tax relief, thus contradicting Herr Zimmermann.59 After the March meetings, Per Spiegel reported that the BMI now wished to downgrade 'Waldsterben' as a public issue. Indeed, a little later the official description became 'Waldschäden', forest damage was replacing forest death in official parlance.60

As defeat loomed at the approaching June meeting, some politicians maintained a brave front and party politics continued. In March a speaker for the CDU/CSU in the Bundestag not only declared (correctly in the longer term) that the European future belonged to unleaded petrol and the low emission car, but also blamed the SPD for having delayed this for so long. As unemployment was rising, the SPD had indeed become more sympathetic to industry and hence compromise in Europe. In return it was now blamed by the CSU for having in the 1970s decoupled the US market for small and medium sized cars and was therefore bearing an 'Erblast' (inherited guilt) for the misfortunes befalling both the forest and the economy!61

On June 20 a Cabinet meeting agreed to accept the Commission's March proposals provided the German economic incentive scheme was approved. This change in position was justified with reference to legal opinion on the German case in EC law, although the deutsche Naturschutzring (a nature conservation organisation) made an emotional last minute appeal to other countries and called for a German veto. More realistically, the CDU environment committee called on government not to accept anything less than the March agreement and Chancellor Kohl was asked to take the issue to the summit in Milan, if necessary. Herr Strauss even wrote a personal letter asking for support for Herr Zimmermann and his policy. The BMI minister was blamed for hectic and confusing strategies and having failed to make forest death a European issue. b) The role of industry : impacts and responses

Although the German car industry had declared its general acceptance of official goals in the autumn of 1983, it also tactically called for the introduction of US emission values and the US test cycle rather than new European limits, something it knew to be unacceptable elsewhere in Europe. The German car industry had in fact remained unconvinced of the value of these proposals, felt rushed and insufficiently consulted but

59 Die Welt. 12 March 1985. 60 Per Spiegel, no. 14. 1985. 61 Press reports 26-27 June 1985.

47 also under growing societal pressure to respond positively.62 Even after 1983, the German motor industry understandably refused to go ahead unilaterally until protected from foreign competition in its home market.

In 1984 the trade associations for the oil and car industries both spoke out against a unilateral policy, but the fear of industry was clearly not its inability to produce catalyst cars in time, but that it might not be able to sell them, in part because such cars could not be driven abroad, in part because of retaliation from countries unable to export freely to Germany, the most important European market. In contrast Britain, therefore, industry's objections were clearly expressed as being commercial rather than technological. The government responded as described by allaying these fears through the provision of tax relief which would make low emission cars no more expensive than 'dirty' ones and by disseminating a powerful environmental threat image to motivate buyers.

When the Green Party, many environmental groups, UBA, some independent research institutes and universities inflamed the debate calling for speed limits, the industry launched a massive and emotional counter-attack warning of 'Kriechkolonnen' (crawling transport columns) and 'communist' attacks on personal freedom. The attack on powerful cars was perceived as a direct threat to German high performance engineering and hence a major global market niche. In the case of Germany adopting US standards in advance of the EC, industry argued, it would have to insist on sufficiently long transition periods. Probably better aware of the enormous opposition elsewhere in Europe, German industry could afford to do what it was often accused of, speak with two voices.

As sales of new cars with petrol engines fell, the oil and car companies accused each other in public for being responsible that not enough unleaded petrol was available. Buyers were uncertain about what to buy and this further increased pressure on industry. It responded by increasing its demands on government to ensure a market for 'cat' cars.

In early July 1984, prior to a major Cabinet decision, the car industry, through the Deutsche Verein der Automobilindustrie (DVA), an organisation dominated by Mercedes and VW and of which Ford and Opel are not members, spoke up against economic incentives because German cars were already ahead of EC regulations. The real problem, VDA argued, was not the increased of cost of buying a 'cat' car, but its subsequent larger running costs.63 Government took the hint and offered more permanent concessions, ie reductions in road tax for low emission cars and further

62 From VDA Annual Reports and interviews. Most senior industry people interviewed admitted that they had serious reservations about catalytic technology and the need for it at that time. Persuasion appears to have come less from regulatory threats as such, but from social pressure, especially if exerted from within the family.

63 Frankfurter Allgemeine 10.7. 1984

48 reductions in the tax on unleaded petrol. Diesel cars were making 'unfair' inroads into the petrol car market. Consumers continued to buy expensive, but low emission diesel cars which could be driven across frontiers and were also attracting subsidies.

In August 1984 industry suggested its own compromise. Promising to prepare gradually for full conversion to catalysts, unleaded petrol would have to be made available throughout Europe. Faced with growing uncertainty and societal pressures, industry realised that it could not resist the low emission vehicle for much longer. Because of falling domestic orders, the car industry even threatened a shorter working week, which in turn led to major disputes among government departments, and between politicians and the administration.

By early 1985 industry was strongly lobbying for a decision and welcomed the proposed tax concession for low emission cars. It claimed that German technology would be ready for the catalyst by the end of that year. Before the March meeting in Brussels, BMW accused Ford of lying about the emission virtues of the leanbum engine, even if equipped with oxidation catalysts. Clarity, BMW argued, was urgently needed about standards so that engineers could get to work, as well as about the tax relief scheme to be implemented and paid for by the Länder. A compromise with Europe was essential in order to find a way out of the 'Katalysatoren Chaos'.64

Industry knew, at the latest by March 1985, that Herr Zimmermann could not win in Luxembourg. The agreement which had been reached in March clearly stated that 'control had to be achieved at reasonable costs and with the aid of several techniques'. Germany had already accepted the division of cars into three classes on the basis of engine size. Agreement on the legality and extent of tax concessions was still outstanding, but a four pfennig differential for unleaded petrol had been introduced.

According to press reports, the German car industry was content with the Luxembourg agreement. Small cars were not really its problem and even Ford Germany had by then decided to adopt catalytic technology for all its new models.

When the controversy about speed limits revived after Luxembourg, industry had to respond quickly to face the option it disliked most. It has also been suggested that the threat of supporting speed limits was used by weaker German firms to restrain those companies who could have complied with official wishes more quickly. Industry now had no choice but to be seen to quickly accept voluntarism. It began marketing environment friendly cars enthusiastically. A common interest with Bonn and the EC Commission had developed, and the low emission, higher value-added car was soon promoted jointly. Ford began selling its old models very cheaply.

Similar arguments were put to us in Britain in 1989.

49 The German firm Degussa had become a major producer of catalysts and Bosch, standing to gain much from the switch to a technology requiring many more electronic components, especially the lamda sensors for the fully regulated catalyst for which it possessed the patent. Aware of the feeling abroad that Bosch was about to capture the entire European market and that this motivated German emission policy, Bosch was informally advised to invest abroad.

By mid 1985 German industry had achieved what it needed, a potentially secure market at home for the new technology, a timetable for diffusing this technology throughout Europe and the continued good will of fellow European companies. The taxpayer rather than industry had paid. It therefore greeted the Luxembourg decisions with relief, which was primarily a response to the achievement of European uniformity, although a contribution to the reduction of transboundary pollution is mentioned as well.65

By 1985 the European car lobby, CCMC, was also fed up with the emission argument and pointed out that time was now needed most, time to adjust investments and R&D efforts to the new regulations. Without any reference to permissive directives, it argued that the time had come when:

"All political bodies must show the greatest willingness to reach a common position and to continue their efforts to reach a common solution for Europe as a whole." 66

CCCM seemed willing to agree to catalytic technology, but not yet on its immediate introduction for all types of cars. c) German views of Britain

During the domestic debate prior to the EC decisions of March and June 1985, Britain was perceived as Germany's major opponent because of the insistence on the same permissive regime for medium-sized as well as small cars, something Germany had no intention to concede. Instead of bargaining over timetables, the British announced that a more advanced technology would soon be ready for mass production. The Society of Motor Manufactures and Traders (SMMT) was reported in disbelief when it described autocatalysts not only as being bad for the UK balance of trade, but as old-fashioned.67 Interviews revealed, however, that the German government fully appreciated the commercial and financial difficulties facing the British car industry, but found the technology based arguments rather less acceptable. Germany was particularly upset by British support for a French argument which claimed that the European test cycle

65 VDA. Annual Report 1984/85, Frankfurt a.M. 1985, p.50

66 European Environment, no 223, 1985,p.3

67 Die Zeit. March 7 and 8, 1985

50 produced US equivalent emissions, a blatant technical untruth to German engineers. Somewhat later, Herr Zimmermann himself told the press that the outdated British industry was largely to blame for his lack of success, and also that Chancellor Kohl could not bear the idea of having to negotiate with Mrs Thatcher on the issue.68

The British also received a bad press for questioning the legality of German intentions to grant tax relief to low emission cars. The definition of a low emission car thus became very important, with Europe wanting and Germany resisting the inclusion of all cars complying with Luxembourg instead of the more demanding US standards, vi. Mid 1985 - 1990: Defeat in Luxembourg and the Conversion to Voluntarism

Final agreement was reached on June 28 and, according to German sources, repeated telephone calls between Mrs Thatcher, who was at the Milan summit conference, and British negotiators. The Luxembourg agreement, while applauded by German industry as a much needed decision, was widely reported in the press as a defeat for Germany. The environmental movement and SPD blamed the government and UBA challenged the meeting's assertion about the 'US equivalence of effect'.69

Germany would be allowed to subsidize, but both reduced and low emission cars. The German market was not to be left to German firms. Officially, of course, the agreement was considered to be an success and it was even argued that the effect the Luxembourg standards would indeed be US equivalent. Luxembourg thus produced little change from the March 20-22 Council agreement. Like the 'faule Kompromiss' of March it was condemned as a political failure, even by UBA employees publishing openly, as a minus for employment opportunities with an estimated loss of 27,000 jobs in Europe, and of course as a disaster for the environment.70 Nevertheless the door had been kept open over the question of standards for small cars. Behind closed doors the battle for stringency could continue, especially over the test cycle.

After Luxembourg Germany learnt from its mistakes, a diplomacy which had tended to generate resistance rather than cooperation by asking for too much too soon. Bonn became more conciliatory, leaving much of the renewed pressure for the catalysts to the members of the car industry and other countries, especially the Netherlands, Denmark and, in the end, France.

Domestic battles again took the centre stage and concerned the voluntary introduction of the low emission car given the restraints imposed by Brussels. In July the Bundesrat agreed to an economic incentive scheme which included diesel cars. This in turn

68 Interview with Herr Zimmermann, Per Spiegel no.28. 8.7.1985

69 K Becker (UBA), Der weite Weg nach Luxemburg, Berlin 1988, p.10

70 Bernd Schäfer, Abgaskatalysators - ein schwacher EG-Kompromiss, Umweltmagazin. May 1985, pp 25-27; Horst Bieber, in Die Zeit. 5.7.1985.

51 encouraged a campaign against diesels as particulate emissions were now examined from a highly critical perspective. The search for a technology to reduce these emissions began as threats were made to regulate these in the near future.

Unleaded petrol became even cheaper and attention was paid to the actual emission behaviour of on-road vehicles. But there would be no speed limits on the autobahn, although this was still widely advocated after 1985. Bonn announced that the results of the autobahn test measuring emission reductions brought about by a 100km/hr speed limit (and on which it had spent DM 15 million) 'proved' that the emission reduction thus achieved was insignificant. The test was quickly alleged to have been designed to prove just this. Government then argued that speed limits would slow down the rate at which new clean cars would be bought, that this alone would lead to less NOX reduction and that speed limits would do nothing against hydrocarbon emissions.71

In October the TUV Rhineland issued a second emission scenario taking into account the Luxembourg decisions. It concluded that the rapid introduction of low emission cars, without speed limits, could lead to significant reductions, eg. of a 57 per cent fall in NOX between 1985 and the mid-1990, provided the uptake of these cars thanks to economic incentives (including retrofitting) was maximal.72 * It may be pointed out that these debates rarely concerned reduction in environmental impacts or improvements in air quality: the goal of environmental protection remained clearly defined as reduced emissions per distance travelled and could thus be readily measured, modelled and reported.

By 1985 most of the necessary investments into catalytic technology had been made, legislative changes completed and the public made aware of the national need for the purchase of more forest friendly cars. Industry and government had become interdependent allies in the gradual introduction of the new technology in Europe. By autumn 1985 the German car industry was reported as prospering again.

In 1986 Her Zimmermann was moved to the Transport Ministry (BMV) and replaced by Professor Klaus Töpfer now in charge of the newly founded Environment Ministry. Vehicle emissions and forests did not disappear from the environmental agenda, but had lost their pre-eminence. As may befit the stronger partner in a community of nations, Germany had accepted the early risks of a major technical change in Europe. It had also created a much needed new market for its electronics industry and had done so with aid of public opinion and an officially supported major environmental threat. It had skilfully created an alliance of green emotions with official environmental management and green commercialism. The instrument used was technology forcing.

71 Umwelt no 8. 1985. p.31

72 Institut for Energy Technology and Environment, Abgas - Emissionsszenario, TU V Rhineland, Cologne, October 1985

52 Table 6 shows the complex regulatory system in place in Germany by 1989, with a clear distinction based on measured emission values between low emission and reduced emission vehicles being required for tax purposes. Simplification was desired by all parties.

UBA and BMU continued to work on technical details concerning the extra-urban driving cycle and emission testing of on-road vehicles, as well as quality control of emission control components.73

The directive on unleaded petrol was amended in July to allow for the more rapid introduction of this fuel in Germany. German legislation was revised and leaded normal petrol banned from February 1988.74 Unleaded petrol was gradually becoming available elsewhere. In 1988 the differential between leaded and unleaded petrol was set at 8 pfennings until 1991. In Brussels, Germany continued to press for regulations further improving the environmental quality of petrol, such as limiting benzene content and a ban on 'scavengers'. Emission policy debates moved outside Germany and increasingly from governments into boardrooms. Public policy had given clear signals about the way the motor industry was to develop. Adjustments to the German market and the prospect of the Single European market had been made. EC policy, outlined in Part I, was progressing by bargaining between many countries and European institutions. Negotiations about the small car continued as described and Germany accepted the 1987 proposal by the Commission (as discussed by the Council in June 1988). Other countries without car industries, the Netherlands, Greece and Denmark all wanted more rapid progress and were now disappointed by futher delays. Germany was in the chair of the Council of Ministers at the time and clearly wanted the negotiations to succeed, but limit values and economic incentives remained controversial subjects.75 Britain was still fighting for the leanbum engine. Further negoations concerning the small car and the new test cylce were not completed until the end of 1990.

In February 1989, Herr Töpfer declared that from 1991 all new cars made in Germany should have fully regulated catalysts so that emission limits in force in the USA could be complied with.76 In March 1989 he held discussions with the VDA in which the industry is said to have offered to comply provided government would assure that the relevant emission standards were adopted in the EC. The offer was apparently withdrawn when VW refused to go along. In October 1989 the EC Commission made its new proposal based on agreement agreed in December 1990. This formed the basis of the Consolidated Directive and finally brought victory. It included new limits to be expressed in grammes per km rather than per test (2.72 for CO .97 for HC and NOX combined) and also a

See UBA, Annual Report. Berlin 1987, p.59 and BM U, Umweltbericht 1990. Bonn, p.114.

7^ The Lead in Petrol Act of 18.12.1987 (Federal Law Gazette.BGBl I, p.2810).

75 See European Environment no. 300, 1988, p.8.

76 ibid no. 316, p.6.

53 durability requirement for catalysts of 80,000 km. Future proposals for reducing CO2 emissions were promised, 'global warming' was at last making an impact.

On 1 January 1990 German legislation to futher improve the tax incentive scheme for low emission cars entered into force. In particular, concessions for cars merely complying with US norms will receive a tax break of DM 1100 for a limited period. The tax break for small cars was significantly improved, with retrospective concessions provided they too would comply with US standards. Retrofitting with catalysts was also supported by up to DM 1100.77

Unilateral action was at last being taken. By comparison with the tax breaks of past years, the purchase of small and medium-sized vehicles was now actively encouraged.78 This may well explain, in part, why the German car industry was not affected by recession but enjoyed its ninth consecutive year of boom.

For details, B M U , Umweltberieht 1990. p. 11.

7 ° See UBA, Annual Report 1989. Berlin 1990, p.127.

54 German Emission Regulations for Passenger Cars for the Purpose of Classification into Low and Reduced Emission Vehicles, 1989

Fahrzeuge mit Otto-Motor und mit Diesel-Motor (vehicles with spark and compression ignition engine) Vorschrift u.

Einstufung nach Anlage X III nach Anlage X X V 8)* nach Anlage X X IV 1?)

(O p tio n )^ )

schadstoffarm nach schadstoffarm nach bedingt schadstoffarm bedingt schadstoffarm bedingt schadstoffarm E G -N o rm Stufe B8)12)15) Stufe C8)14) U S -N o n n Stufe a 8)15) Schadstoff E T F -7 5 Dim. 7 0 /2 2 0 /E W G D im . 7 0 /2 2 0 /E W G D irn . 7 0 /2 2 0 /E W G D im . 7 0 /2 2 0 /E W G D irn . HC 0 .2 5 I§ > g /k m - s 16) g /T est - - CO 2 .1 18> g /k m 25W )/30’5)l9) g /T e s t x 9> g /T e s t x 16) g /T e s t 3 8 .2 5 19) g /T est NOX 0 .6 2 18> g /k m 3 i5S)20) g /T e s t 6.OO19) g /T est - 3 0 % 13) 19) - 6.0019) g /T est g /T est g /T est g /T e s t E ( H C + N O X) - 6 -5 5)20)/8 ö)20) 1 2 .7 5 10) 19)/ 1 2 .7 5 19) 1 5 ll)i9 ) g /k m Highway-NOx 0 .7 6 18) LT1 g /T e s t cn 2 .0 2) E vap . g /k m X?) PM .4) 0 - 0 - KGH-Emission 0 0 0 Bemerkungen: 1) Entspricht US-MJ 83-Standards ohne PM; für Fahrzeuge mit 3) gilt für Fahrzeuge mit Hubraum VH > 1.4 1; für Diesel ab 12) gültig nur für Fahrzeuge mit Otto-Motor (3 Jahre Steuerabsen einer zul. Gesamtmasse von 400...2500 kg und V_ > 50 km/h. 19.9.1984 kung) Dauerlauf oder wahlweise feste Versehlechterungsfaktoren bis 4) für Diesel-Fahrzeuge bis 19.9.1984: PM = 0.124 g/km 13) bezogen auf Meßwert vor Umrüstung (Meßwert < NOX nach 30.9.1987: 5) Fahrzeuge mit Otto-Motor mit Hubraum Vjj > 2.0 1 15/03) Otto-Motoren: 1.3 für HC, 1.2 fur CO, 1.1 für HCY, 6) Fahrzeuge mit Otto-Motor mit Hubraum 1.4 I < Vjj > 2 .0 1 und 14) gültig für Fahrzeuge mit Otto- und Dieselmotoren und Vh < 1.4 1 bei Erstzulassung vor dem 1.20.1990 (Steuerbefreiung) Diesel-Motoren: 1.0 für HC, 1,1 für CO, 1.0 für MG„. 1.2 für PM alle Diesel-Fahrzeuge mit Hubraum V g > 1.4 i 15) gültig für Fahrzeuge bei Erstzulassung vor dem 1.10. 1986 ab 1.10.1987: 7) ohne PM-Festlegung Bei einer Jahresproduktion je Fahrzeugtyp 16) HC und CO dürfen nicht signifikant ansteigen 8) gültig bei Erstzulassung oder Nachrüstung 17) zulässige Verbrauchserhöhung 5% (ECE/90 km/h/120 km/h) < 10 000 Fahrzeuge: Faktoren wie bis 30.9.1987 9) entspricht ECE R 15/03 bzw. 15/04 (Typprüfwert), für Erstzulas- > 10 000 Fahrzeuge: Faktor 1.3 für alle Komponenten, gilt für 18) mindestens 70% der Stichprobe der Produktion muß unter sung nach 1.3.85 ECE R 15/04 Berücksichtigung der Verschlechterungsfaktoren diese Werte erfüllen Otto- und Diesel-Motoren 10) für Fahrzeuge mit Bezugsmasse < 1250 kg 2) nach SHED-Methode; gültig ab 1.10.1986 19) die Serienproduktion darf diese Werte um 20% überschreiten 11) für Fahrzeuge mit Bezugsmasse > 1250 kg 20) die Serienproduktion darf diese Werte um 25% überschreiten (technical notes are not translated)

* - low emission in accordance U S n o rm ** (cars > 1 .41 ) - low emission in accordance with EC norm 70/220/EC (with 5 % lim it on increased consumption) - reduced emission in accordance with EC norm 70/220/EC (levels A, B & C for tax relief purposes)

Sorareet Umweltbundssamt, KFZ- (PKW) Abgas-Emissionen - Grenzwerte, Vorschriften und Messungen, Berlin 1989 VI BRITISH PERCEPTIONS AND RESPONSES 1974-1990 i. Introduction: the Decline of the British Motor Industry

The British story is ironic and sad. Having out-manoeuvered the Germans in 1985 and with hindsight, Britain had underestimated the power of the market and the rate of technical change desired in Europe. It became the major loser in the vehicle emission control saga.

In the late 1980s Britain developed a serious trade deficit for cars and components and British made cars lost increasing market shares to imports. With the privatisation of the small British owned sector completed, Japanese and French companies were invited to set up manufacturing plants in Britain, often taking advantages of sites and skills vacated by British firms. Until that time, however, the responsible government department, DTI, acted firmly to protect its ailing car industry,79 but given the political priorities of the time and the views of the Prime Minister, this support remained weak and did not extent to financial assistance for the leanbum engine. Rather, the last British remnant was sold cheaply (with 'sweeteners' still a subject of European judicial procedures) to British Aerospace.80

Several companies had been nationalised in 1975 to become British Leyland, which was an ailing concern throughout the 1970s and had stopped trading in North America. Ford Europe, the UK market leader, was a valued British institution, an important employer, exporter to Europe and technological innovator, but it too had a reputation for underinvestment and weak engine design. Its links with government were closer than those of Vauxhall, the GM daughter.81 Ford lobbied intensively for the leanbum engine.

Since acid rain had not become a public issue until allegations of transboundary pollution made newspaper headlines and stimulated defensive policy responses during the early 1980s, industry did not experience significant public pressure to improve the emission behaviour of its vehicles until late in the 1980s.

79 Insufficient attention to the importance of technological development, poor management and excessive protection in the 50s and 60s (for the best o f motives) were major factors.

80 For a critical comment on UK policy towards the car industry see S Wilks, Corporate Strategy and State Support in the European Motor Industry, in L Hancher and Moran (eds), Capitalism, Culture and Economic Regulation, 1989, Clarendon Press, Oxford.

81 Vauxhall policy is made in the US rather than Europe and its autocatalysts are supplied from there. Opel was persuaded to prepare for a full switch to catalytic cars in 1985 on advice from the USA. All German-made cars were adapted so that they could be sold in the USA. The strategic revision costs were therefore smallest for Vauxhall/Opel, which may explain their low profile during the debate.

56 ii. 1971 - 1989: Policy Persistence

An early, but brief period of environmental concern, especially over industrial pollution, was experienced in Britain.82 It had all but disappeared a few years later. For example, in 1970 the appointment of the first minister of the newly formed Department for the Environment (DoE), Peter Walker, has been described by a close observer as:

"...the arrival in a position of unprecedented political and administrative power of a minister specifically charged with the job of controlling pollution...who believed that the international tide of opinion against pollution could only grow stronger and higher and therefore concluded it was better to push British industry along faster in this respect than they conceded was reasonable, and that pushing them hard would prove a wise course economically in the long run. Right from the start he went about uttering deliberately tough noises on 'making the polluter p ay '."83

Peter Walker apparently wanted to adopt the same stringent standards as the Americans had done in order to cope with smog. Why then did the British political system fail to achieve what it set out to do in the early 1970s? 84

During the 1970s gaseous vehicle emissions attracted virtually no political attention. The only matter of some public concern was aroused by lorries. Thundering through old villages and towns while emitting black smoke, they induced some public anger the and prodded government into action. Early warnings about the impact of the growth in cars numbers and miles travelled fell on deaf ears, however.

Senior politicians and Secretaries of State for the Environment from both major parties perceived pollution control as a cost and brake on industry rather than an instrument for technological progress. Under theWilson government, Environment Minister Anthony Crosland is said to have lost out to other ministries representing a strong lobby which argued that Britain

82 Tony Aldous, Battle for the Environment, Fontana,Lonodn, 1972. This makes surprising reading because of its emphasis on transport as an area in urgent need of an environmental policy and illustrates that Britain 's concept of environment remained closely tied from the start to conservation and preservation. Environmental policy, were needed, was linked to scientific evidence for damage and the planning process rather than to technological innovation. Technology is viewed consistently a something negative.

83 ib id , p 3 5 .

84 For a more detailed study of the decision-making process, see Boehmer-Christiansen, 1991, Vehicle Emission Regulation in Britain: The Emerging Environmental Dimension , Energy and Environment, vo l.l, no.4.

57 "cannot allow the frills of environmental improvement, such as relatively harmless car fumes and unspoiled national parks, to stand too much in the way of a healthy balance of trade".85

Margaret Thatcher, for some time in charge of the DoE in the early 1970s, is known to have found this job rather boring and showed little interest in environmental protection until the late 1980s. The neglect of vehicle emissions continued until in the early 1980s when Whitehall had to respond to pressures from the EC Commission.

a) The response to the 1984 Commission Proposal

The UK Department of Transport, formally in charge of vehicle emissions, responded to the 1984 Commission proposal described in Chapter II as follows:

" The information in the Commission's draft document confirms our doubts about the effectiveness of US test procedure for controlling emissions from vehicles on the road, especially in the different driving conditions encountered in Europe....The US procedure takes little account of the performance of catalysts in these typical European traffic situations - in which emissions tend to be at a maximum. But addition of a higher speed driving test to the European test cycle would only be appropriate if nitrogen oxide emissions from motor vehicles were a significant contributor to long-range pollution such as acid rain. The relatively small milage done on motorways in the United Kingdom...together with the present uncertainty about long-range environmental damage from such emissions, would make such tests of comparatively little value.... (emission testing) is unsuitable for the average service station or garage ..(and would) add substantially to the costs of annual tests., and data from the United Environmental Protection Agency ...do indeed show very large rates of deterioration in use, even for cars whose catalyst systems have not been subject to tampering or poisoned by the use of unleaded petrol. "86

The above remained a fair summary of UK policy until Britain was outvoted in Europe. The missing ingredient, at that stage, was the official support for a commitment to reduce emissions with the help of leanbum engines. Concern with costs and a lack of faith in technological progress are demonstrated. The above ministerial statement is very similar to the arguments put to the Royal

85 Aldous, cit op, p 35..

86 UK Department of Transport, Explanatory Memorandum on European Community Legislation, submitted to the House of Lord's Select Committee on the European Communities, December 1984. It was signed by Nicholas Ridley who later became an unpopular Environment Minister. In 1989, by them Minister for Trade and Industry, he became even better known for his anti-German prejudice and lost his job.

58 Commission on Environmental Pollution by the Ford Motor Company in August 1983,87 and to which the RCEP presumably listened sympathetically but on which it would not make any recommendations.

An examination of the relevant environmental and consumer group literature, as well as interviews, indicate that with one exception (see below) British 'interested parties' supported government policy. Autocatalysts were considered appropriate, if at all, for large, high performance cars bought by rich Germans racing along autobahns. There was almost unanimously opposition to the Commission's ideas and hence UBA's plans for Europe; even one British luxury car producer was outraged.88 Fuel efficiency, speed limits and smaller cars remained the preferred option, especially for the influentical environmental lobby.89 It is difficult to argue that this was not a legitimate, environmentally responsible position. It did not suit Europe, however.

The 1984 EC proposal and subsequent amendments were therefore persistently rejected by Britain with reference to five criteria: the costs to industry and motorists (£2000 per car, according to the Society of Motor Manufacturers and Traders - SMMT); the poor American experience with catalysts; uncertain if any positive environmental impacts specific to Britain; the absence of evidence for transfrontier damage and the superior performance of leanburn technology with respect to fuel efficiency. This engine was being developed independently by both British Leyland/ Rover and Ford and allegedly nearing commercial availability.

In British official statements on the subject there are few, if any, references to the global competitiveness of the European car industry or to the European environment. If Germans were really worried about their forests, then let them introduce speed limits, was an argument widely put to us. The Prime Minister of the day might even have seen a link between the concession Britain had won from Europe over its contributions to agriculture fund and the sum Britain was now asked to spend on catalytic conversion. The estimated cost of this for the entire British car fleet was estimated as £12.5 billion annually.

87 Submission by Ford Motor Company to the RCEP on the Subject of Automobile Exhaust Emissions, mimeo, August 1983. This admits the very low emissions which can be achieved, but emphasises costs, technical problems and on-road deterioration.

88 W ith catalytic experience under the tutelage of Johnson Matthey since the 1970s, this firm informed the D T I in 1984 that the Commissions proposals for engines above 21 were unattainable for the company and that the situation was 'ludicrous' since it could fulfil US requirements.

89 Interview with Jane Dunmore of CLEAR; Greenpeace and Friends of the Earth did not come out in favour of catalysts until the late 1980s. Similarly, the National Society for Clean A ir did not concern itself with gaseous emissions until 1985 and fully support the leanbum trajectory until the late 1980s.

59 It was quite clear therefore, in 1984, that any proposal on vehicle emissions which was justified with reference to the environmental impacts of NOX on forests or health would not be accepted. Near total opposition gave government no incentives at all to consider the Commission proposal seriously. The Germans, and the Commission, had prepared their ground very poorly. Their reply to Britain, drawing emotional attention to the plight of forests, also had little impact in Britain where planted forests are not much loved and few institutional interests in forest die-back could be discovered. Scientists therefore tended to be employed to refute rather than support the hypothesis.

Neither did the UK government see much scientific reason for legislating for unleaded rather than low-lead petrol. Representatives from oil industry stood firmly behind the motor industry and the SMMT who felt that the whole issue of technical regulation should be left to the experts, ie UNECE's ERG A working groups devoted to emission regulation by the global approach. Problems were arising only because of interference by irrational politicians, such as Herr Zimmermann. There appeared to be little awareness of earlier German efforts and domestic developments in this area. As late as 1987, the SMMT told the public that:

" SMMT has continued to press for limits which would enable the benefits of leanbum engine development to be fully exploited, thus avoiding the serious economic consequences of imposing complex catalyst technology on low-cost popular cars..." and in a written submission to the House of Lords European Committee in November 1983, it had emphasised:

"the importance of harmonisation and of establishing a stable framework of legislation on the basis of a global approach. This should take into account fuel quality, noise, timing and costs in relation to environmental benefit." 90

Industry had first to realise that change was in its own commercial interest - a matter pointed out in the mid-1980s only by car experts who saw the advantages arising to industry as a whole from moving towards the electronic, higher value-added car.91

When the the Commission proposal was briefly but intensively debated in both Houses of Parliament in 1984, the almost unanimous opposition of industry, consumers and

90 SMMT, Annual Report, 1987, p.14

91 DT Jones, Measuring technological advantage in the motor vehicle industry, SPRU, Brighton, M ay 1988. Jones calls Bosch the 'value added in the German car industry'.

6 0 environmental organisations became apparent.92 There was one exception, the environment and Europe friendly House of Lords.

In Sub-committee F (Environment) of the Select Committee on the European Communities, Lord Nathan, pointed out not only that it was inappropriate for vehicle emissions regulation not to be a responsibility of the DoE, but also that the leanbum engine might well turn out to be a 'dead-end' technology. If stage I of the 1984 Commission proposal were adopted by the British government without the intention of moving later to stage II, but instead "with the view to promoting leanbum engines", he warned, this would mean that the manufacturers of these engines, unable to comply with stage II and would resist catalysts.93 This was of course precisely what happened.

One other government body that might have advised in favour of air quality, the Nature Conservancy Council, has its brief limited to the assessment of environmental damage. In its 1984 report on the implications of acid rain, after having pointed out that financial restraint were severely hampering its scientific assessment, it recommended that "the only remedy...is a reduction in emissions of sulphur and nitrogen oxides".94

Attempts to obtain a more precise policy recommendation from NCC meant referral to the DoE, who even if it had wanted to play a proactive role in the debate (and there is evidence that it did), lacked the powers to counter, far less to convert, the chorus of opposition to autocatalysts. The institutional base for emission regulation had remained very weak indeed. b) The institutions responsible of air pollution

When Britain set up a DoE in 1970, it merely merged a number of ministries, including the present Department of Transport (DTp) into a superministry which was meant to 'integrate' environmental policy into existing policies. In contrast to the corresponding German legislation, the DoE under the Control of Pollution Act (COPA, 1974) had only acquired the right to regulate air pollution through product standards for fuels, such as the lead content of petrol, but not exhaust emissions. It used these powers in the early 1980s under growing domestic and European pressure when introducing low lead petrol. 95

92 House of Commons, May 1988, Environment Committee, First Report Session 1987-1988, A ir Pollution, which includes a reprint of the Fourth Report, Session 1983-1984, Acid Rain, HC 446, HM SO , London. In 1988 the Committee was appalled at the standard of evidence received from the motor industry, but maintained its support for the leanbum engine. 93 House of Lords Select Committee on the European Communities, 1985, Session 1984-85, Fifth Report, Lead in Petrol and vehicle Emissions, London, HM SO, p.xiii. 94 NCC, Report No 7, Acid deposition and its implications for Nature Conservancy in Britain, Shrewsbury, 1984. 95 The opposition to low lead petrol was particularly strong because the major European firm O C TEL (owned by oil companies) producing lead additives is based in Britain.

61 In 1974 Transport became an independent ministry again and took with it responsibility for technical standards, including emissions from passenger cars. Still generally considered a department for road building rather than transport, the department acquired a strong commitment to the car and much expertise in building roads, but little on air pollution.

The split left the DoE with few direct powers over vehicle emissions other than those of funding a little research, proposing guidelines and raising its voice in Cabinet. In any case, the DoE has never been able to act as a single minded defender of nature, but must play, in the words of its current Chief Scientist, a mediating role between many interests, including the 'environmental concerns of the day'.96

In the early 1980s practical air pollution control from major stationary sources was in the able hands of the semi-autonomous Clean Air Inspectorate set up under 19th century and subsequent legislation. The Inspectorate was, however, attached to the Department of Employment and its Health and Safety Executive and thus largely outside the influence of both DoE and DTp. Vehicle emissions were not one of its responsibilities and therefore escaped regulation under the best practicable means principle.97 The powerful Health and Safety Executive could also ignore vehicles because they did not endanger health and safety at the place of work. Local Authorities were not responsible for mobile sources, other than perhaps by encouraging (without much effect) the police to take action against vehicles emitting visibly black diesel fumes, the only enforceable emission standards existing in Britain at that time.98 Vehicle emission control had, in fact, neither a welcoming institutional home nor a strong legal base.

For air pollution control, COP A contained only two regulations (on motor fuel and fuel content of oil fuel for furnaces), as well as provisions on cable burning. Under the Act, the Secretary of State of the Environment "may impose requirements as to the composition and contents of any fuel of a kind used in motor vehicles". Before doing so, however, only representatives for the manufacturers and users of such vehicles must be consulted. Emissions from tail pipes or other parts of motor vehicles received no mention and thus remained firmly with the DTp.

96 D r David Fisk in reply to Lord Ashby, House of Lords, Select Committee on the European Communities, Session 1984-5, Fifth Report, Lead in Petrol and Vehicle Emissions, London 1985, p. 11. D r Fisk and D r Westheide subsequently negotiated vehicle emissions in Brussels for their respective countries.

97 For a comparison of the air pollution control regimes in both countries, see Boehmer- Christiansen and Skea, 1991, op cit.

98 D Ball, 1982, Smoke from diesel vehicles, Clean Air, vol 12,2; Greater London Council, 1983, Thirty Years On: A review of air pollution in London, London.

62 A tradition of reactive and remedial legislation would later rob government of the power, of taking policy initiatives. The legislation was too poorly developed unless the DTp could be persuaded to take initiative. Unlike its German counterpart, it had no internal or legal incentives to improve air quality. The pressure to bring the DoT and DoE together on the issue came largely from Brussels.

In the earliest phases of emission debates in Brussels (1984-85), national ministries with responsibility for the car industry also held major negotiating briefs for most Member States. For Britain, therefore, the Department of Trade and Industry (DTI) was also QO involved. It remained actively involved until the mid-1985 and privately regretted that the issue had passed, via Brussels, into the hands of the DoE which was perceived as having 'an axe to grind'. This appeared to be a prevailing attitude of an administration which distrusted the explicit expression of interest and any conflicts this might create. The DTI, at that time, had its own axe to grind, which was to protect an ailing industry against foreign threats, especially after the decision to privatise British Leyland had been taken in the early 1980s. As mentioned, it had been advised that the proposed standards were technically unattainable and thus viewed the Commission as biased in favour of the German Green Party or Bosch.

Britain was in a difficult negotiating position. It did not want Germany to act unilaterally by erecting 'non-tariff trade barriers, but also saw non-uniform environmental standards as legitimate (in fact its policy elsewhere was based on this view). It therefore supported the idea of 'permissive' standards which in effect protected the British market for British made cars. c) The legal base

Prior to the introduction of UNECE emission standards, the Type and Approval Regulations and the British Construction and Use Regulation 24 were used to implements the Road Traffic Act. The former regulations apply to the manufacturer, implement ECE and now EC emission standards and were first used in 1970 to implement the ECE-1500 regulation. Regulation 24, on the other hand, is meant to ensure that car owners maintain their vehicles. As laid down in 1969, the Type and Approval Regulations required "that every motor vehicle shall be so constructed that no avoidable smoke or vapour is emitted". Under Regulation 24, a vehicle shall not be used "if the emission causes or is likely to cause damage to any property or injury or danger to any person who is or may be expected to be on the road."99 100 More restrictive enabling powers and lacking enforcement provisions are hard to envisage. There is no mention of adjustment to technical change.

99 I. Turner, 1988, Environmental Policy in Europe: Uniformity or Diversity?, CEED Discussion Paper no.7, London. This emphasises British economic interests in the debate.

100 J McLoughlin, 1972, The Law Relating to Pollution, Manchester Uni Press, p.67

63 The phrases referring to damage and injury have since been replaced by emission tables which implement the mentioned international agreements and must be complied with by the manufacturer and the owner of a vehicle. The current MOT annual test for vehicles does not yet include emissions, thus leaving compliance entirely to the good will of the car owner, but change is planned. The DTp proposals discussed in January 1991 have been criticised by the National Society for Clean Air, as applying only to CO and lenient enough to allow all but 'very poorly performing engines'.101

Until 1984 European regulations had not created any problems in the UK and did not 'produce market distortion'.102 They had, after all, been largely defined by the industry in a cooperative mode. iii. Temporary Victory in 1985 a) Luxembourg is celebrated

Before Luxembourg, the British motor industry and the oil companies had to agree on the octane rating of the unleaded they now knew would have to be introduced. They failed to reach a common position. Even the car industry could not agree among itself and hence had little choice but to accept what was offered in Brussels.

The 1985 Luxembourg agreement (or compromise, as the Germans prefer to call it) caused only brief interest in the British press. It did not please car manufacturers in Britain, but neither was it seen as a threat to the leanburn engine, especially for use in medium-sized cars. Rather, the agreement was celebrated as a German defeat.103

After 1985, the development of the leanburn engine in Britain continued and European manufacturers would sell their older models rather more profitably than on the Continent. However, the justifications upon which resistance to the autocatalyst was based were changing, thus preparing the ground for an approaching policy U-turn. In March 1986 government announced a review of its acid rain policy in the light of scientific developments. The report happened to become available just before the re negotiation of the Small Car Directive. A greater degree of acid damage was beginning to be accepted, especially for surface waters, and opposition to Europe slowly began to mellow.

101 New Scientist, no. 1751, 12 January 1991, p.73.

102 See H R Glatz, The historic development, the political background and future porspects of motor vehicle emission control regulation in Europe, in Proceedings o f the Institution of Mechanical Engineers: Vehicle Emission and their Impact on European A ir quality, London, 1988, p 4.

103 See Financial Times 27-29 June 1985; Daily Telegraph 29 June.

64 Yet, in 1987 Lord Belstead, a junior environment minister, returned optimistically from Brussels and announced that the standards still being debated

"should not be difficult to introduce for small and medium sized cars because the leanbum engines would by then be sufficiently developed." 104

The support for the leanbum engine now becoming available from both Ford and Rover as powerful, small high compression engines remained firm, even among Britain's most prestigious engineering body, the Fellowship of Engineering, though the engine stands condemned, in emission terms, by the data the Fellowship provided for the DoE.105 b) The Greening of Britian in 1988

1988, the 'Green Year' in Britain, still brought no obvious policy change for vehicle emissions policy, but the first signs that government was looking at other options. In March 1988 Lord Caithness, the minister responsible for vehicle emissions negotiations in Brussels, visited Johnson Matthey for the first time and congratulated the firm on its contributions to British technology.

In late 1988 the Large Combustion Plant Directive was finally agreed and British Leyland had ceased to exist. Its technological and commercial problems were no longer a responsibility of government, which had now shifted firmly to ensuring compliance with EC legislation, especially the introduction of unleaded petrol. Even this policy had not gained the support of the DTI until 1987 because of concern over effects on small retailers.106

The British hope of being able to produce a new generation of small high compression engines not requiring fully regulated catalysts was kept alive and work at Rover and Ford along these lines continued. Political developments elsewhere in Europe, however, should have been a warning. In July, a trade journal commenting on the small car agreement, concluded that the directive as it was developing would surely spell the end of industry's hope to meet emissions standards with leanbum engines alone.107

104 Reported in The Guardian ,22/7/87..

105 Fellowship of Engineering, Manual of Acid Emissions Abatement, vol 4, Mobile Sources, November 1987 (unpublished).

106 House of Lords Select Committee on the European Communities 1987, Particulate Emissions from Diesel Engined Cars, 7th Report 1987-1988, HM SO, London.

107 The Engineer. 14 July, 1988. This also cites a spokesperson for Rover who accuses the Commission to have mishandled the issue, arguing that the right approach is to have a clean engine.

65 In late October 1988 the DoE launched a brief but intensive publicity campaign for unleaded petrol, by now 6 pence cheaper than four star leaded petrol. Only 2 per cent of cars were as yet using it, although well over one half of cars could have done so with some adjustment. Unleaded petrol was still justified as a health measure and not as a prerequisite for autocatalysts which were now beginning to enter the public consciousness because environmental groups, with the tacit support of the DoE, began to advocate this device.

In November 1988, environmental organisations 'threw a green gauntlet' to the government and called for the introduction of three way catalytic converters for all cars. But conflict in Brussels continued as Rover hoped to save the leanbum engine at least for small cars.108

In November, the DoE's Warren Spring Laboratory revised British NOX emission from vehicles upward by over 20 per cent to 1,031,000 tonnes and the DoE strategically published its response to the Environment Committee's first Report on Air Pollution in late 1988 just prior to the Small Car decisions, stating that:

"...further research had shown that 'acid rain' was not solely a long-range transboundary phenomenon but that acid depositions were in some measure affecting the local environment in the UK.."109

In March 1989 Lord Caithness in one of the DoE's glossy 'Environment in Trust' pamphlets produced by the DoE admitted that" leanbum engines fail to deliver the greatest potential for ridding car emissions of many gases", but defended it as producing less carbon monoxide.

The first Ford Fiestas with leanbum engines appeared in the shops in April 1989 and were advertised as producing more power and using less fuel. But in February SMMT announced that one third of Britain's growing trade deficit was due to vehicle imports.110 Nissan was beginning production in Britain.

Also in April of 1989, Mrs Thatcher still defended the Luxembourg standards to a worried Tree Council fearing for the future of the British forest and forestry as:

"not quite as tight as in the United States, but (having) the important advantage

108 House of Commons, written answers 30 November 1988, col. 1278.

109 Report 'The Government's Reply to... op cit note 6, HMSO London December 1988, p.2. The House o f Commons Environment Committee based its views on reports from the DoE's Terrestrial Effects Review Group which had been studying the effects o f acidification and concluded that there was a direct link between acidification o f surface waters in Scandinavia and British emissions, but remained agnostic about effects on forest decline.

110 The Guardian. 28 February 1989; The Independent, 2 March 1989.

66 of allowing the development of intrinsically clean and fuel-efficient leanbum engines”.111

Junior Environment Minister Mrs Virginia Bottomley echoed her when she told the House of Commons Environment Committee, also in April, that:

"We have no wish, however, to rule out the use of the leanbum engines which offer very important savings in reduced carbon dioxide and in increased fuel efficiency."112

The Tree Council, in its reply to the Prime Minister begged to differ and urged government to support more ambitious proposals for small cars. These were by then before the Commission and were demanded by the European Parliament.

Interviews with scientists from a government laboratory working on the subject of emissions at that time still considered the three way catalyst to be to be associated with a 15-20 per cent 'fuel penalty' over leanbum engines. It was known, however, that the 5 g/test standard could not be achieved by these leanbum engines, while 8 g probably could with an oxidation catalyst. The battle continued.

At the June 1989 meeting of Environment Ministers in Brussels, at which Britain had by now lost the veto thanks to the Single European Act and the opinion of the EP, standards which would mean that British made cars with caburettors instead of electronic fuel injection and catalysts could not comply, had to be accepted. The Prime Minister's private secretary now wrote to the Tree Council claiming that:

"The government played a a leading role in reaching this agreement...(it) contains strict standards equivalent to those now in force in the United States." 113

A change in policy had clearly taken place during the summer of 1989, but must have been very sudden, unexpected and cannot be fully documented as it was not discussed in public. The factors behind this change in policy can be listed, however. They were increasing scientific evidence from British sources,114 the completion of the privatisation programme and the arrival of a new senior minister at the DoE (Chris

111 'The Prime Minister and Air Pollution', Tree News. September 1989,p 5. The Tree Council is a charity set up in 1974 to promote the improvement of the environment by the planting and conservation of woods. It did not became a major public actor in the debate. 112 UK Department of the Environment, Air Pollution: The Government Reply to the First Report from the Environment Committee, Session 1987-1988, HC 270-1, London, December 1988. 113 opcitnote84. 114 See the UK Review Group of Acid Rain, Acid Deposition in the U K 1981-1985, and the Second report from the UK Terrestrial Effects Review Group, The Effects of A dd Deposition on the Terrestrial Environment in the UK, HMSO, London, 1989.

67 Patten replacing Nicholas Ridley), as well as the ‘greening1 of the Prime Minister herself as she became interested in the global warming debate. All these made a policy U-turn less painful for government than for some members of industry.

Many British engineers were deeply disappointed by this outcome and speedy adjustment was now needed to ensure that some clean models at least could be offered by 1992 and preferably earlier. However, the share of British-made cars continued to fall as Japanese and other foreign makes increased in popularity. After 1993 the new leanbum engines would not be allowed to bum lean and fuel efficiency would suffer, it was argued. Its contribution to reducing carbon dioxide emission through reduced fuel consumption had been lost or at least postponed.

Britain, with Ford Europe as its main ally, had to accept defeat in 1989 at the hands of the European Parliament. This meant the demise, for the time being at least, of a potentially competing technology felt to be 'British'. Germany, together with Opel/General Motors and other car companies more successful in switching all their production lines to the new technology, emerged as the winners.

iv. Policy and Institutional Change in the late 1980s

a) Integrated pollution control

The organisation of environmental policy, including its philosophical, legal and institutional base, began to change after 1988, even if as yet without major impacts on vehicle emission regulation. This process of change actually began in 1976 when the Royal Commission on Environmental Pollution recommended the development of integrated pollution control.115 Government did not respond, however, until 1982 and then rejected most RCEP recommendations.

During the early 1980s, very much in contrast to similar bodies in Germany, the various pollution inspectorates failed to have much impact on policy. Change had to come from above, government ministers themselves had to 'green' before change was possible. In 1987, as part of a general public expenditure saving and efficiency raising exercise, the Clean Air Inspectorate was moved back to the DoE in 1987 and the various pollution inspectorates were 'integrated' to become Her Majesty's Pollution Inspectorate, HMPI. None of them have anything to do with vehicles, however.

Her Majesty's Inspectorate of Pollution remains under-resourced and understaffed, but its powers have been strengthened by legislation. Institutional change was widely discussed in 1990/91, and some changes are planned or proposed by political parties.

115 Royal Commision on Environmental Pollution, Fifth Report, A ir Pollution Control: An Integrated Approach, HM SO, London, 1976. A Commission on Energy and Environment had a life span of only two years and reported only on coal before being abolished.

68 They did not identify vehicle emissions as an area of political attention until a link with 'global warming' was established, but by 1992, even this link appeared to be weakening.

Society, to judge from anecdotal evidence and personal observation, remained rather poorly informed about major environmental issues. In July 1989, the Rover Company was criticised by the UK Advertising Standards Authority for suggesting to the public that unleaded petrol would help to protect the ozone layer. An opinion survey suggested that a majority of British drivers believed that unleaded petrol would help to abate global warming. Official encouragement, cheaper petrol and the Royal example of buying unleaded petrol, proved effective and provides some evidence in favour of our general argument that government policy and its public justification play a major role in creating environmental awareness. Legislative change, to give substance to the philosophy of integrated control, best environmental option and even best available techniques, had begun. Unfortunately, however, a major economic recession was once again frustrating investment. b) The 'greening' of transport policy

Under the impact of the vehicle emission debate, the DoE and DTp had to learn to cooperate and learn from each other, but the legal and institutional base on which they had to do so remained weak. The DTp began to realise that 'the environment’ one of its responsibilities and that it needed to polish its image and might have to talk to environmental groups. A competitive element, so noticeable in German interdepartmental environmental politics, was gradually emerging but could not express itself in public because the 'rules of the game' forbid open debates between government departments.

In September 1990 the government published its environmental strategy, 'This Common Inheritance', a heavy volume of 291 pages promised by Chris Patten to the Conservative Party in 1989.116 While prettily illustrated it was generally judged to be unsatisfactory with respect to commitments to specific policies and targets. Only four paragraphs deal with pollution from vehicles, making the admission that all vehicles are: "an important and growing source of air pollution. Standards for new vehicles have to be agreed within the European Community before we can introduce them in Britain....much tighter emission standards should be in force by the end of 1992....and the government is pressing its European colleagues to agree on a Directive applying to larger cars as quickly as possible."117

116 UK DoE, T h is Common Inheritance (UK Government White Paper), HM SO, September 1990, London. W ith reference to vehicles it is promised to improve the enforcement o f speed limits, work in the EC to improve fuel consumption and to ‘consider whether further changes in fuel and vehicle taxes are needed, p. 11 o f Summary.

117 ibid, p. 145.

69 A promise was made to extend the annual MOT test to ensure that engines remain well tuned. Pollution control action, however, emphasises heavy diesel lorries. In general, "government is committed to working with both vehicle and fuel industries to achieve further improvements" in fuel quality. v. Conclusions

In 1984, West Germany exported almost 2.4 million cars compared to Britain's 300,000. This presented an enormous reversal in British fortunes since the 1950. As in Germany, a very large number of jobs continued to depend directly and indirectly on the car and road transport, but while sixty per cent of cars build in Germany annually were exported, the British car market had become a major drain on the balance of payments and jobs continued to be lost. While Germans were extremely loyal to their own products (the German government's effort to clean the air by subsidising autocatalysts therefore benefited mainly German industry), no such benefits were increasingly likely to accrue to Britain had it acted in a similar fashion. As the English say, the boat had been missed.

Under these circumstances, the British government not unnaturally attempted to protect industry as long as possible. It did so in the context of the alleged prospects of the leanbum engine and the perceived insignificance of air pollution problems.118 There had been no sustained public outcries or little sustained pressure group activity in respect to acid rain. The Forestry Commission, a part of the Scottish Office and the largest forest owner, had no incentive to clash with the motor industry and Cabinet. Forests were not, therefore, an issue through which any government could have mobilised public opinion in support of more expensive cars. The British people prefer wide vistas, parks and bare mountains. The German government probably made a tactical mistake when it concentrated its campaign for the autocatalyst on environmental arguments. In spite of adapting to European pressures it remains unlikely that Britain will initiate major environmental policy action in Europe. Rather, Britain is likely to respond to European legislation in ways which will protect British national interests as perceived in Cabinet.

Afforestation was considered to encourage acidification and to deterioration o f water quality.

7 0 v n THE ON-ROAD SITUATION AT THE BEGINNING OF THE 1990s

i. Total Emissions Compared

New European Community standards which will soon become mandatory for new cars clearly do not affect current emissions unless efforts have been made to introduce them prior to 1993. Current mandatory emission standards in both countries are still determined by the extent to which the various ECE-15 regulations have been incorporated into national practice, especially on whether they are enforced by good vehicle maintenance and emission testing, as well as by any voluntary efforts (including retrofitting and the retirement of old cars).

Total emissions (and to a lesser degree air quality) relate not only to emission standards but also to the size of the car stock and the total number of miles travelled. For all these criteria, Germany remains considerably ahead of Britain. In 1990 the British car stock was approaching 21 million compared to 16 million in 1984, when about 3000 km of motorway were available. The numbers for Germany in 1984 were 25 millions (in the old Länder only) with 8000 km of motorway. By 1990 the number of cars, east Germany now included, had risen to almost 35 million! A rational argument can therefore be made that cleaner cars were a greater necessity for Germany than Britain simply because of its greater addiction to private motoring.

Most vehicles currently on the road in Britain still emit relatively large amounts of pollution, especially of NOX. All remain entitled to use leaded petrol, (but see Table 4). As elsewhere, transport remains the largest contributor of nitrogen oxides, emitting (but not depositing) an officially estimated 1.22 million tonnes in the UK in 1988’19 (out of a total of 2.47 million) compared to 1.8 million (out of almost 3 million) in West Germany.

Table 7 gives independent estimates of current emissions from vehicle stocks, in both countries for four pollutants and raises questions about the reliability of some official figures.

Given Germany's international 'acid rain' activism, readiness to subsidise the purchase of new cars, a general concern for health impacts related to air pollution (and growing apprehension about a predicted 35 per cent increase in NOX emission in consequence of the Single European Market), a much better performance for individual cars is predictable. However, total NOX emissions have not yet declined, not even in the old German Länder.

119 U K DoE, Digest of Environmental Protection and Water Statistics, London, 1990.

71 Table 7: Emission estimates from vehicles stock in Britain and Germany (1989) (in '000 tonnes)

UK GERMANY 20005*

CARBON MONOXIDE cars/Pkw 4413.4 5680 vans (less 3.5 t/Nutzfahrz.) 480.5 140 heavy duty (rest of road transport) 150.0 360

TOTAL 5043.9 6180 1630

NITROGEN OXIDES cars 773.4 1050 vans (less 3.5 t) 82.7 570 heavy duty 550.0 220

TOTAL 1356.1 1840 1030

HYDROCARBONS cars** 459.2 1030 vans (less 3.5 t) 49.2 120 heavy duty 23.0 120

TOTAL 532.0 1270* 410

CARBONDIOXIDE cars 65,606.2 93,500 vans (less 3.5 t) 9,959.3 30,800 heavy duty 28,600.0 23,000

TOTAL 104,165.5 147,300 166,000

NB: - no figures are not fully comparable because of unstated assumptions - includes diesel cars which contribute little to gaseous emissions other than CO2 *HC values in FRG include all losses, UK exhaust only

Source: SPRU vehicle emission model (1991, UK only); Report by Arbeitsgruppe Umwelt und Verkehr to the 35th Conference on Environment, 1990)

7 2 ii. Conversion proceeds in Germany

ECE regulation 15-04 was implemented in Germany by 1984.120 In early 1990, 15.4 per cent of all petrol driven cars registered in West Germany were equipped with fully regulated catalytic converters, a doubling since early 1989. Another 5.7 per cent were using unregulated types and the per centage of new cars not yet up to US standards but complying with the Luxembourg limits, was 79 per cent. Most new models being offered in Germany came equipped with catalysts, but usually remained available without them.121 Retrofitting, although recommended and subsidised by government was making only slow progress. Government remained dissatisfied and repeatedly called upon the public, local and district politicians to promote the adoption of the new technology. When the economic incentives associated with the purchase of low emission small cars were increased in 1990,122 the prospects of further emission reductions improved. The German government, having felt unfairly restrained by EC regulation on tax incentives decided to proceed unilaterally. With about 70 per cent of petrol sold in 1990 of the unleaded variety, Germany remained at the top of the EC league table.

The newly united Germany now has to provide fuel and space for 35 million private cars. Per capita ownership in the east has already reached 1984 western values. Road transport in general increased its NOX emissions from 34 per cent of the total in 1970 (2.35 megatonnes) to 52.4 per cent (2.95 megatonnes) in 1986 and there has been no overall decline in spite of stringent measures in the power sector.

In January 1991 there were reports of on-road tests results of catalysts which hinted that these highly valued devices were not living up to their reputation.123 Out of 18 cars being measured after 60,000km on the test stand for compliance with the prescribed standards, only five performed satisfactory (3 Opel models and 2 Japanese ones). Since German law grants tax relief only for cars which can comply after 80,000 km or five years, replacement catalysts will be needed at an estimated cost of about DW 1000. The law, component suppliers and garages are prepared for this. From July 1992, all cars will have their emissions tested and failure will require the purchase of a new catalyst.

120 A Dickman, 1985, The Automative Industry in Germany, dv, Cologne..

121 Per Spiegel. 4 April 1989

122 BM I, Um welt, 9/89, 12/1989, 8/199

123 'Katalysator: Schlechter als sein R u f, Die Zeit. 11 January 1991, p. 22

73 iii. Resistance continues in Britain

In 1990, the British car stock of about 21 million was considered to be in agreement with the ECE 15-04 regulation, but this was not formally required under British law until 1991. Until 1991, no emission testing at all was required during the annual inspection but, as mentioned above, MOT emission testing has begun for CO.124

The limited data available suggests an uptake of catalysts by the end of 1990 of only 2 per cent of new cars sold. Of about 1000 models listed in late 1989, 186 cars and two vans were fitted with some form of catalytic converter, twenty-four of these of British make. According to the UK Environment Minister, Chris Patten, twenty of the 180 cars in ministerial car fleet stationed in London had autocatalysts in October 1990 and government had decided to recommend such cars to the public.

In early 1990 a sample of motorists was reported as unwilling 'to give up their cars' or accept a general lowering of speed limits, but prepared to accept catalytic converters as a necessary gadget in any new car they might buy in future. Like their Germans counterparts, car owners would have approved of schemes to reduce the purchasing cost of clean cars. In autumn, the British Automobile Association published a survey of motorists attitudes to car pollution.125 This showed that 30 per cent claimed to have taken some action to reduce their personal contribution, while 95 per cent of respondents were aware that cars contributed to air pollution and 58 per cent suggested that 'fitting autocatalysts' would help. A surprisingly high proportion, two per cent, claimed that they had already done so.

At the beginning of the decade, therefore, the environment-friendliness of cars was still largely judged by their ability to run on unleaded petrol, which had reached about 30 per cent of total petrol sold, although an estimated 70 per cent of cars could have been using it with minor adjustments.126 The UK government had increased the price differential between leaded and unleaded petrol for a second time and the public would like to see this increased further.

In early 1991 the National Society for Clean Air (NSCA) reported "increasing interest amongst fleet operators and the public in general in the environmental friendliness of cars"127 and that some people were willing buy 'clean' cars even ahead of any legislative requirement. From the manufacturers themselves, NSCA had learnt that all 37 Audi models were available with the catalyst option, BMW reported that the take-up

124 Anecdotal evidence suggest that cars are tuned 'down' for this test, and then retuned for best performance.

125 Summary in The Environment Digest No 39 , September 1990, p 15.

126 ENDS Report No. 191. December 1990, p 26. This put the UK in the middle of the EC league, ahead of France and Italy. 127 NSCA, 1990, Clean Cars - How to Chose One, Brighton.

74 of 'cat' cars was 50 per cent but confined to the more expensive models. FIAT was not as yet offering any such models and Peugeot only four, adding that the number of such cars sold was still insignificant. FORD was supplying a 'a high proportion' of its models with catalysts and Rover sold its products with the option, but uptake 'has been disappointingly low'. For HONDA 5 out of 10 models, VW 21 out of 49 and Vauxhall 37 out of 117 had catalysts as standard equipment. For small cars the catalytic option was indeed expensive, costing up to £550 more than the conventional or leanbum option.

Industry was preparing for the autocatalyst, albeit reluctantly. It began pleading for financial incentives for clean cars in 1990, wanting such action to stimulate declining demand. Facing a deepening depression, there were calls for tax relief, greater differentials between leaded and unleaded petrol and lower duty on diesel fuel.128 Although there were rumours that some help for cars linked to emissions might be forthcoming in future, no such promise had been made in 'This Common Inheritance'. In spite of being called Britain's first attempt to define a systematic environmental strategy, it contains no major initiatives for autocatalysts but raises the possibility of carbon taxes for motor fuels.

In 1990 new MoT regulations were issued which dropped stage 1 of the Small Car regulation, thus allowing new cars complying with ECE 15-04 regulations to be sold until the stage 2 standards come into force. How this will be affected by the Consolidated EC directive remains unclear.

The gradual if unimpressive conversion to autocatalysts from the 'top' of the price range downwards has began, but without incentives and little public concern, the diffusion of the 'clean' car is likely to be slow in Britain, especially if the purchasing of new cars remains as depressed as it is in 1992. The prospect for a rapid conversion of the British car stock to low emission vehicles ahead of natural replacement by vehicles complying with EC regulations remains gloomy.129

In early 1992, the NSCA urged government:

"We are drawn to the conclusion that tax incentives are required to redress the balance in favour of the environment, and that without such intervention, the uptake of catalysts is likely to be slow until they become a mandatory requirement. Millions of polluting cars will have been sold in the interim".

128 Simon Beavis, 'Motor industry plea for help', The Guardian. 1/1/1991, p.13. 129 The replacement rate for passenger cars is usually considered to be ten years, but depends on a number of factors, especially disposal income.

75 PART THREE: ANALYSIS AND EXPLANATIONS

VIII MAJOR FINDINGS

i. Environmental Threat Perception

A general tendency to select and interpret environmental knowledge to defend perceived interests, promote expectations or advance the cause of policies preferred on non-environmental grounds was noted both in Britain and Germany. This common characteristic led to the very contrasting responses to 'acid rain'.

In Britain, to doing something against 'acid rain' would have required major unpopular or costly changes in a number of public policies. The same was true, at first, in Germany, but the constellation of political forces was different and pressures calling for change came primarily from within the country, including a sector of government. In Britain, demands for change came primarily from abroad. This led to a defensive response which further weakened environmental policy because these demands were perceived as hostile and based on unproven allegations. One major recommendation for successful international environmental policy-making, therefore, must be to ensure that threat perceptions are similar before negotiations begin.

While Britain tried to remain true to its traditional, gradualist ways of controlling air pollution control by relying on existing recipes and institutions, Germany began to 'fight for pure air' and 'combat forest death'. The government drew up action programmes and initiated a European campaign to improve air quality by improving technology rather than switching fuels. The British public and official advisers on the issue, on the other hand, remained much more sceptical about alleged health threats arising from urban air pollution and certainly had serious doubts about links between air pollution and any problems of forestry.

The English language painted a much weaker environmental threat perception, for example, 'Waldsterben', became forest decline or, at the most, forest die-back. English remained content with 'exhaust gases', when in German the term 'Abgasgifte' (exhaust gas poisons) became customary. The observed differences in behaviour therefore very directly reflect difference in threat perception as expressed in language. This includes very fundamental terms such as 'Umweltschutz' (protecting the surrounding world) und 'Umweltbelastung' (burdening of the environment), which are not fully translated by the equivalent terms of pollution control or environmental stress. 'Environment' lacks the breadth of 'surrounding world' and control lacks the implication associated with 'Schutz', which itself is often translated as conservation, eg. in 'Naturschutz'. The protection of society is a fundamental task of the German state.

This stronger language both reflects and supports the existence, in German society, of more powerful cultural and political forces clamouring for action to save the natural

76 world. Once in common usage, such 'alarmist' language invites action rather than more research. 'Acid rain' came to be perceived, by German speakers, as a most serious transfrontier (including trans-Länder) set of phenomena with costly socio-economic impacts. The threatened impacts were such that proactive, at times aggressive, responses were justified. How did such perceptions, which were clearly not shared with Britain, come about? Who created them, who communicated them and what ends did they serve? Answers are suggested by a political analysis of the debate.

In Germany, the perception of serious environmental and human health threats attributable to 'acid rain' included vehicle emissions almost from the start because the coal industry and some regional governments, in response to allegations about their responsibility for 'Waldsterben', immediately countered by introducing nitrogen oxides and tropospheric ozone into the controversy. Given the links between these allegations and energy politics, environmental arguments were widely communicated by official bodies in government, especially the Interior Ministry (BMI) and the Federal Environment Office (UBA) in Berlin.130 British environmental priorities remained much less concerned with clean air and transport. No British government minister at the beginning of the 1980s would have dared to call the car 'environmental enemy number one.' Some German ministers shared a widespread societal 'angst' of environmental catastrophe.

The meanings that became attached to the concept of environment in relation to transport were not identical either. Given the love of cars the German government preferred to perceive the environmental problems associated with cars primarily as relating to 'pure' air and the long-range transport of pollutants, while the British had to respond to concern about urban congestion and space problems. These differences in concern reflect geographical realities as well as perceptual differences.

There was also, in Germany, a lesser degree of official interest in fuel efficiency. While energy conservation almost became a British taboo word during the 1980s, fuel efficiency in engines was officially popular for it suited government rhetoric on energy efficiency. Efficiency as an engineering goal was promoted, but came to be perceived as technically conflicting with emission abatement. An argument often heard in Britain, that improved fuel consumption should be 'traded off against somewhat lower emissions reduction, could have little appeal in Germany were air pollution had become the decisive problem.

Economic interests support threat perception and vice versa. Throughout the 1970s and 1980s Britain remained a net exporter of oil and gas, while Germany was a major importer. German forests are often privately owned, Britain has few forests and the pine plantations created by the state owned Forestry Commission are not popular.

130 For more detail see, S A Boehmer-Christiansen, 'Energy Policy and Public Opinion: Manipulation of Environmental Threats by Vested Interests in the U K and West Germany', Energy Policy, November 1990, pp 828-836.

77 Culture and interest appear to merge to create language differences which 'fix’ environmental threat perceptions in the minds of people and hence influence their goals and actions.

ii. Institutional Capacity

The institutional and legal base for controlling emissions from mobile sources was better developed in Germany. This can be traced back to developments during the 1970s when energy questions, and in particularly the expansion of nuclear power, politicised energy policy and drew public attention to associated pollution problems. This in turn encouraged institutional responses, with government having to pay attention to 'implementation' gaps that had developed between environmental promises and practise. The attempt (around 1975) to disengage the state from environmental responsibility failed as the public demanded the vigorous application of the available regulatory instruments. This in turn promoted innovative thinking in government encouraged by creative thinking in the Environment Agency (UBA) in Berlin.

In Britain, too, the 1970s had started with strong environmental ambitions, but then turned into "that awful decade of strife and stress" 131 during which industrial pollution control largely disappeared from the national agenda. Neglect of air pollution became typical of British policy during the 1970s and 1980s and energy policy remained unaffected by environmental considerations other than oil spills and nuclear waste dumping at sea. The British Government has still not created for itself an integrated source of multi-disciplinary advice which combines technical, administrative, economic and legal expertise. The British political climate during the first half of the 1980s turned out to be even less favourable to environmental initiatives than that of the 1970s. Attempts to fundamentally revise and reform environmental principles and institutions did not begin until it was almost too late, namely under the impact of the 'global warming' debate and growing regulatory pressures from Brussels. iii. Political Interests

Powerful social impulses calling for better environmental management were observed in both countries, but were able to have significant impact only on the German political system. Political interests and their legitimacy were also more explicitly admitted in Germany, while British policy-makers preferred to describe their own views as rational and untinged by politics. A majority of individuals interviewed in Britain ascribed German activism directly to the influence of the Green Party and hence to 'politics' rather than rational judgement.

131 Peter Hennessy, Address to the Parliamentary Group for Energy Studies, Energy Focus. 8/1, April 1991, p.17.

78 The reasons for this (mis)perception are complex and considered to be largely historical and cultural, relating to differing legal and administrative traditions, including the differing political roles played by the mass media and the generally more open nature of political debates in Germany. In addition, the federal nature of the German state itself favoured the development of environmental awareness. Competition between the federal and regional governments over shared environmental responsibilities (combined with party-political competition) produced a degree of political involvement over 'green' issues quite unknown in Britain. This in turn generated pressures on government which required all parties to discover policy linkages between ambitious emission control targets and other societal goals. Official self-interest in environmental activism formed on both the right and the left of the political spectrum.

In Britain, in contrast, political institutions did not benefit from more stringent regulation and were not obliged to search for wider policy linkages. The growing strength of European environmental policy threatened to reduce the powers of central government and further invited resistance on political grounds. iv. Economic Considerations

Emission control was only in part a matter of environmental strategy: economic considerations were equally important if not dominant. Economic considerations include production and R&D costs, as well as their impacts on commercial competition. The world market, the strategies of multinational corporations and their competitive behaviour are therefore part of the story. A closer look at the fortunes of industry and national technological capacity (rather than industrial structure as such) is therefore essential before governmental environmental policies and their economic impacts can be understood. Both the German and the British government adjusted policy to market needs, but in the context of their own macro-economic priorities and ideological perspectives. While ideology differed little between the Kohl and Thatcher administrations, only the latter was faced with a section of the motor industry still in government ownership.

In the early 1980s car technology in Europe was generally lagging behind world 'best practice', especially in the emission control area, but many companies, especially Ford Europe and British Leyland (privatised as Rover Group in 1986),132 were promoting a

132 S W ilks, Corporate Strategy and State Support in the European Motor Industry, in L Hancher and M Moran (eds), Capitalism, Culture and Economic Regulation, Clarendon Press, Oxford, 1989, states that for the U K Labour Party, the Conservative's hurry to sell British Leyland (called British Elend in Germany) "was not simply economically unwise, it was a downright betrayal o f responsibility". By 1986 BL had hugely increased its productivity and solved many o f its internal problems. Privatisation was therefore seen as abandoning about £2.5 m illion investment made by the state in BL/Rover since 1974.

79 'European' solution based on the further development of leanbum engine technology.133 This protection was likely to decrease with the development of the Single Market and the European concept was also threatened by the expansion of Japanese cars into Europe. Japanese car technology, increasingly incorporating electronics, proved to be a growing threat to European manufacturers unless strongly protected by government.134 The fully regulated autocatalysts requires electronic components not needed by engines based on carburettor technology.

The significance of technology for the future economics of car manufacture and national economies is reflected in the estimated per car R&D expenditures achieved during the mid-1980s. These were $300 in Britain, $540 in Germany and $700 in Japan.135 It is generally agreed that the more expensive a car, the greater the profit margins and the less significant the relative cost of the adopting catalytic technology. At the beginning of the 1980s the autocatalyst presented between 10 and 20 percent of R&D costs with the greatest costs being associated with the development of new car designs and production lines, especially if all models were to have catalysts as standard equipment. However, car firms were not equally capable to adopt the new technology, in part because they had already adopted different engines types.

However, relative to car size, the conversion to autocatalysts would be most costly for smaller and cheaper vehicles. Since Germans prefer large, well-engineered cars, 70 per cent of which are produced at home and small cars with engines less than 1.4 1 are largely imported, the cost of the catalytic conversion became a major issue in commercial competition not only between companies but also between car sizes. Non- German firms specialising in smaller cars saw advantages from increasing the price of large cars only, something the Germans naturally tried to resists by demanding catalysts for all cars.

The British position in Brussels was based on the aim to protect at least one vehicle size range for the leanbum engine. The British car industry had already lost most of its markets in North America and thus faced the desired change from a position of serious weakness compounded by low efficiency and poor economic performance.136 German

133 Ford of Europe, The European Emission Situation, October 1983 and other documents kindly supplied by the Company. Annual reports of V D A were consulted and confirm that Germany at that time followed similar goals.

134 D Jones, 1985, The future of the automobile, SPRU Discussion paper No 20, Brighton and A Altshuler and D Ross, The Future of the Automobile, 1984, Cambridge, M IT Press. A ll cars sold in Japan were required to comply with very stringent emission standards, probably more stringent than American ones.

135 D Jones, May 1988, Measuring Technological Advantage in the Motor Vehicles Industry, SPU Discussion Paper no.23. Brighton.

136 J Wood, 1988, Wheels of Misfortune: The Decline and Fall of the British M otor Industry, L on do n.

80 exports to America, on the other hand, had continued to grow, especially for large luxury cars and hence ensured that most German companies were well acquainted with catalytic technology. The German car industry was economically healthy, even if occasionally troubled by falling orders due to market uncertainties. It needed sufficient time, the good will of other European car companies and, most of all, official assurances that domestic and export markets would not be endangered by unilateralism.

Because of the threat to other European firms were Germany to adopt the autocatalyst too fast (and any subsequent commercial retaliation against German cars abroad), it was in the interest of German industry to wait until most other firms, especially the French and the Italian ones, had adjusted while at the same time persuading the German government to subsidise low emission cars in the domestic market.

Opel was in fact the first German based company to switch fully to the new technology, Vauxhall in the UK followed later. Both received considerable help from their American parent company, General Motors. Ford Europe, in contrast, operated independently from Ford USA and had committed itself very firmly to the leanbum engine, concentrating its efforts on influencing EC policy via the UK where its economic interests as a multinational company coincided most with those of government.

Most firms also had an interest in maintaining some 'dirty' markets (or pollution havens) as long as possible, either to sell older models or current ones without catalysts more profitably. This explains why even some German firms, including Daimler-Benz, persist in selling high emission cars in Britain and why the debate about the reluctance of German firms only to offer cars with three way converters continued well after 1985.

In Germany, which clearly had no economic interest at all in acting as a 'pollution haven', the argument that an increase in the replacement rate of vehicles in the domestic market was both an effective way of reducing emissions and of stimulating domestic demand, proved environmentally and economically persuasive. For legal reasons unwilling to implement a mandatory regime unilaterally, government assisted in a process which rejuvenated the German car stock by providing economic incentives and launching a major public information campaign. For the German government the longer term goal, however, was to assist industry in the establishment of a successful European car industry which might one day dictate the rate of technological change globally.

The British government could not have had such an ambitious objective. The major reason for its persistent reluctance to view vehicle emissions in the same light as its German counterpart was the coincidence of its own interest as the owner of one section of the industry (and represented by the Department of Trade and Industry and the

81 Treasury), with that of Ford and the BL. Whitehall wanted to protect the remaining British owned part of the motor industry as it was prepared for reprivatisation. Government therefore failed to recognise the economic, ie. value-added potential, of the catalytic conversion.

For car firms either unable or unwilling to commit resources to the new technology as long as old models could be sold profitably, Britain was a most suitable ally against too rapid change. Its emphasis on smaller, cheaper (but still highly profitable) cars’37 and cut-price competition, as well as a continued preference for non-electronic technology (ie carburettors) all added to the genuine economic obstacles which prevented the quick adoption of catalysts.

In the Britain of the 1980s, therefore, a 'German' solution was not only ideologically quite unacceptable (it would have been condemned as 'corporatist' or as trying to pick winners, something government must not do and in breach of the polluter pays principle), but also politically unnecessary and economically unattractive.

Britain was, however, forced to adopt tax cuts for unleaded petrol in order to comply with its international obligations. The British government had the choice between either ignoring the industry's plight by acting according to its proclaimed capitalist principles and open the industry to market forces, or to protect the industry to gain time and recoup some investments, including those made into the leanbum engine, at least in the home market. Not surprisingly, even the Thatcher government adopted the latter course and car sales were soon booming in Britain. Nevertheless, as warned by the House of Lords in 1984, government had adopted a most risky strategy for the longer term. By in the mid-1980s British Leyland was making large losses and the primary concern of politicians was to sell this industry as quickly as possible and encourage 'inward investment' in the motor industry, especially by the Japanese.

By 1989 British firms had indeed become leaner and more competitive and in early 1990 Toyota announced plans for building 200,000 car per year in the UK. BL had become Rover and its cars were increasingly using Honda engines. By the end of the decade, the entire European motor industry was at last ready for the autocatalyst and thus the absorption of much higher proportion of electronic components. Its advertising was reaching unknown heights of 'green' rhetoric, but the catalytic conversion of Britain was proceeding only slowly.

137 C Wood, Motor Industry Survey, The Economist. 2 March 1985, p 13, cites figures suggesting that British cars are about 20% more expensive than equivalent bought on the Continent.

82 Given the overall economic significance of the motor industry, both countries decided to protect their respective industries, and with contrasting effects on technological change and competitiveness the decision by Britain to offer protection, even if mistaken in its effect and considered by some to have been too limited, was not surprising.138 What is surprising, and weakens the argument that social movements alone can initiate technological innovation, is the almost total support society gave to official British policy. The environmental movement in Britian, so large and indeed powerful in certain respects, has completely failed to compel technological change of the kind observed in Germany and Japan.

A cultural dimension is therefore indicated which attests to the importance of attitudes to technology as 'a good thing' in itself and to the criteria by which people select and hence make new products. One has to move beyond economic explanations and delve even deeper into society to fully understand competitive and diplomatic achievements.

138 The British government could have abandoned the leanburn engine earlier, as advised by Lord Nathan, or might have supported its development while delaying agreement in Brussels, thereby gaining time for Rover and Ford.

83 VIII EXPLAINING ANGLO-GERMAN ENVIRONMENTAL POLICY

Both countries started formal negotiations in Brussels from very different policy baselines. Attitudes, expectations and available policy instruments all differed significantly, but this was not sufficiently recognised. The British government in particular remained largely ignorant of the strength and depth of the social and political forces in Germany which supported environmental activism and tended to perceive ulterior motives instead.139 These different baselines can be grouped into three sets of variables (i - iii) Section iv will compare the evolution of environmental policy in the two countries. i. Corporate and industrial policy and culture

Pressed by governments, the European car industry had responded to the oil 'crises' of the 1970s primarily by investing in R&D to produce more energy efficient car engines. These oil 'crises', ie. price increases, was seen as a major problem in Britain, while Germany perceived an opportunity to solve a number of pressing problems. In the UK, attention to emission regulation came to be seen as a detraction from an already R&D intensive task which was absorbing about 10 per cent of limited resources,140 in Germany it became a part of investment in technological progress.

Because of greater experience with chemical engineering Germany was probably more willing to accept this new device and perfect it for fast cars. The autocatalyst was not despised by German engineers looking for new ways to keep up with Japanese achievements. In contrast, British engineers of the old school likened the autocatalyst to an unnecessary appendage or vacuum cleaner for a house that should be kept intrinsically clean. Speed limits, on the hand, were seen as a serious threat to German engineering and market niches. They proved to be a useful bargaining counter in societal negotiations because the cultural preference for 'freedom' on the autobahn and fast cars could be traded against the willingness to pay more for clean, but powerful cars. German industry could be persuaded to give up its opposition stringent emission limits provided Europe would 'be made' to follow.

The imperative for techno-economic restructuring within the EC was eventually recognised by all, but before Britain could join this process, it also had to overcome a deep aversion to many things 'continental'. Things could have come otherwise if the British-based precious metals firm, Johnson Matthey (JM) had been more influential. As a multinational firm importing these metals from South Africa it had not, however, sought links with the British government and preferred to lobby through professional

139 A recommendation for more successful negotiations would therefore have to be that governments pay more attention to the creation of a common basis of knowledge, understanding and evaluation.

140 T Whiston,1982, Environmental regulation and the European Automobile Industry. Report to the OECD, mimeo, SPRU, University of Sussex.

84 bodies.141 Like the German firm Bosch, which had developed a high capacity and reputation for the production of electronic components and has been described as 'value added' in the German car industry. It might have moved British emission technology forward given a different political environment.142 The prevailing commercial policy of a company reflects not only its place and ambitions in the world economy, but also its knowledge of the expectations of its customers. Figure 3 shows how British and 'overseas' firms explained their success in the market place and hints at one reason for British failure to remain competitive.

Figure 3: British and overseas firms perception of competitive advantage

Source: Roy (1990)

* The sample included 42 typical British firms and 9 successful overseas firms in the office, domestic heating and electronic business equipment and computing industries.

141 R A Searle (from JM), Car exhaust pollution control. Platinum Metals Review. 32/3. 1988 pp 1 2 3 -1 2 9 . 142 Both Bosch and JM acted quietly 'behind the scene' to push Europe gradually towards full catalytic conversion.

85 British firms were looking to price rather than to technical performance. This supports the general argument that the value put on technology by industry in particular and society in general may influence environmental policy. In Britain, a more limited value attached to technology weakened the psychological ability to adjust to European environmental debates.143 A similar lack of pressure on industry to innovate is revealed by a closer analysis of how the acid rain debate developed in Britain and from the general nature of environmental policy in each country.

ii. 'Acid Rain* and Public Opinion

The 1 Waldsterben' (or forest die-back) story cannot be told here except to point to its considerable salience in German electoral politics between 1981 and 1985 and to the widespread political consensus which existed at that time about its causation, the deposition of wet or dry sulphur and nitrogen oxides originating from coal-fired power stations and motor vehicles. Public opinion is usually made responsible for the 1982/1983 German policy reversal on 'acid rain*.

This role is, nevertheless, ambiguous. Public opinion was both cause and effect of government policy. By becoming part of a major electoral battle at home and regulatory disputes in the EC, outcries about 'Waldsterben' and its alleged cause served to arouse and mobilise the voters and hence gave the issue a degree of political salience and exposure quite unmatched in Britain. This in turn ensured that in the end, almost all political institutions supported some form of action to abate vehicle emissions.

These outcries were never dampened by government and were in fact, for a time, encouraged. 'Waldsterben' allowed the German government to implement a range of potentially unpopular federal and regional policies with the full public support. Energy and vehicle emission policy were adjusted in environmentally beneficial ways without conflicting with macro-economic policies. The willingness of consumers to spend on the environment and German products was enhanced. The Green Party, which threaten the expanding commitment to nuclear power, could be contained because it its unrealistic energy policy. In particular, the abatement of acid emissions offered considerable advantages to the energy and macro-economic policies of the right-wing parties which came to power in the autumn of 1982, parties which governed the forested and nuclear power dependent South.

Public opinion was therefore as mucha cause as an instrument of policy. It created pressure on industry and increased demand for cleaner products. German environmental publicists have celebrated a close relationship between policy and 'environmental awareness', but this was not observed for nuclear policy where government has been fighting public opinion for almost two decades.

143 Acording to N. Williams, The Guardian. 23 April 1991, p.11, more than a third of British companies have come to realise that they were not spending enough on innovation to meet future competitive pressures. 'Innovation plea by CBI chief.

86 In the UK a similar convergence of policies, public opinion and politics was not possible. The political elite distrusts public opinion and the single party in power tends to need it less. Both the cultural and political differences hinted at above find fullest expression in the third set of variables. iii. The Nature of Environmental Policy

The powerful and well established British environmental movement remained least effective in the realm of industrial pollution control, while in Germany a very recent environmental grass root movements appeared to achieve enormous success. Each movement was clearly facing a very different type of environmental policy. From comparative analysis six factors have been identified as explaining the impact of environmental movements on official environmental policy. The factors discussed below are grouped under two headings: the development of environmental awareness and the nature and evolution of the environmental policy itself. a) The creation of environmental awareness

In Germany, the origins of a rather unspecified demand for environmental protection are often traced no further than to the growing environmental awareness of the general public. While this can measured statistically, the causal relationship between ’awareness' and policy is by no means clear.

Environmental awareness promotes and underpins a proactive environmental policy provided it is widely shared in society. Awareness creates new social pressures which may force government to press industry to provide 'solutions' to environmental problems through technical innovation. Without 'awareness', public opinion cannot become an instrument of policy. A government (or sections of it), once it wants to encourage innovation, may wish to promote environmental awareness to justify tighter regulation. The likelihood of government promoting regulation with the help of public opinion is influenced by the nature (and style) of environmental policy.

Environmental awareness is probably best viewed as a product of open and intense public debate, including the wide availability of knowledge. Government action may either hinder or promote such debates and by the example it sets, governance itself may become a factor in the social learning process.

Open debate, in turn, is determined to a large extent by four factors:

- the sensitivity of political parties to minority views;

- legal traditions and the structure of the decision-making process;

the institutionalisation of counter-knowledge and

87 - the range of attitudes to technological change.

All these factors discouraged open debate in Britain while enhancing it, for acid rain, in Germany. They are discussed below.

In Germany environmental awareness was activated by a strong belief inside the machinery of government that it was its duty to protect society from environmental threats. To find and deal with such threats was therefore a task of government which both strengthened state power and justified it. Given the prevailing commitment to technological rationality the State would search for solutions, preferably technological ones. For this to succeed, legal and institutional conditions must be framed accordingly. If 'technical fixes' can be discovered which also assist with the attainment of non-environmental objectives, such as economic growth and international standing, a highly 'rational' situation for government intervention in favour of the environment has been created.

Under the ’acid rain' programme, for example, wealthy utilities could be required to invest heavily without increasing generating capacity, the social acceptability and relative costs of nuclear power could be improved, and old coal-fired plant could be phased out. More relevantly here, car technology could be pushed towards 'best international practice' and the market for electronic components and precious metals be stimulated. A product of higher value and higher technical quality could be created. Without environmental 'awareness' the new cars would not have been 'needed' and regulation would have led to commercial failure.

In Britain, conditions were rather different. Environmentally engaged citizens failed to persuade government for a variety of institutional and cultural reasons. These included a lesser love for cars, motorways, and forests, and also administrative secrecy and an electoral system which makes it extremely difficult for minority views to be heard unless they are very concentrated geographically. The difficulties faced by British environmentalist when trying to influence policy were particularly great during the Thatcher years when traditional channels between lobbies and the administration proved ineffective.

These traditional ways were weak because they tended to bypass both the public and the political parties, and hence Parliament. As the sensitivity of political parties to new knowledge and minority views is also weaker in Britain compared to Germany, the environmental movement was condemned to relative impotence whenever the media refused to take up its causes. The very structure of the political decision-making system compounded their problems. In the British electoral system, the 'winner takes all' which allows the largest party, with considerably less than 40 per cent of the total vote in a general election, to gain very large absolute majorities in the Lower House. The pressure on opposition parties to remain united, and hence dispute not in public, is therefore also considerable. New knowledge and new attitudes tend to be kept at the margins of the decision-making system until the single party in power and/or senior

88 politicians experience a change of heart.144

This electoral system also tends to reduce the role of parliament, political parties and even that of advisory bodies to that of 'rubber stamping' single party or Cabinet decisions. Neither the Upper nor the Lower House can effectively overrule such decisions. For 'acid rain* this meant that decisions tended to be based less on consensus formed after open scientific and political debate than on pre-existing policy commitments and the political priorities of a Conservative Cabinet. Environmental policy in general, during the 1980s, was often made by the Prime Minister herself in consultation with a small number of unelected advisers with strong commitments to vested interests. Such decisions, being confidential, were not widely known or understood outside a small policy community. Policy convergence and the tradition of collective responsibility ensured that dissenting voices received little hearing and had even less influence.

For the environment therefore, the famed British pragmatism lost out to 'conviction politics' and economic orthodoxy, namely that spending on the environment is a cost that should be kept as low as possible and that environmental regulation was, in principle, undesirable as it meant interference by the state with market forces. In practise this meant that senior politicians made environmental decisions on the basis of a strong faith in the ability of firms to regulate themselves.

Lack of political sensitivity to minority views further prevented the politicisation of environmental issues and hence reduces media involvement. This in turn helps to retard the growth in environmental knowledge among the general public.145 Single party dominance promoted a policy orientations at the macro-level which not only weakened the legitimate knowledge base, but also disenfranchised a large number of groups from influence on policy via the political process.

British public concern over acid rain in the mid 1980s could be described, at most, as a shallow concern which did not receive sustained attention in the media. Concern existed only among directly involved individuals: some scientists and science writers, some officials and researchers charged with ensuring that Britain would comply with its international obligations. The concern among industrialists remained primarily one of costs.

The decision-making structure as such should not, however, have prevented British policy-makers altogether from adopting a more active technocratic emission control policy based on economic interest calculations. Technocratic decision-making, a long

144 Such a change of heart took place in 1988 when Margaret Thatcher was persuaded that global warming presented a real threat. The policy implications were significant. 145 For example, in 1990 a majority of people were reported to believe that unleaded petrol helps to reduce global warming. A publication by the Industrial Society, Europe and the Environm ent, claimed that a catalytic converter, while reducing acid rain, emitted three times as much carbon d io xid e.

89 British tradition in pollution control, is in principle able to produce proactive policies. But as shown above, economic and political interest calculations by politicians directly limited this administrative capacity. Lack of political support and insufficient resourcing are only part of the story, however, there was also, for vehicle emissions in particular, a serious lack of regulatory tools.

The conservatism of the British legal traditions, in strong contrasts with their perhaps excessive exuberance in Germany, did not encourage the emergence of environmental law as a distinct and proactive branch. A small Environmental Law Association representing practitioners and deliberately not acting as an environmental lobby, was set up as recently as 1985 and had about 1000 members in 1990. It prefers not become involved in 'politics’ or take sides in environmental disputes. Part of the reason for this reluctance may relate to traditional preference of British courts not to become involved in the implementation of pollution control. Pollution had therefore remained, until the very recent entry into force of the 1990 Environmental Protection Act, a largely a administrative matter subject to discretionary political intervention.

Without significant legal changes initiated by Parliament to weaken the powers given to senior politician, ie the Secretary of State for the Environment and officials appointed by him, the precedent bound common law tradition in Britain had fundamental difficulties in coping with new principles and issues, such as transfrontier pollution or rapid changes in science and technology.146

This once again contrasts with developments in Germany, where an already highly legalistic regulatory system based on the implementation powers of the Länder was modernised by the concepts of precaution, cooperation and the allocation of responsibility for remedial or other action to the polluter, during the 1970s. German environmental policy benefited considerably from an increasing professional interest in environmental protection by lawyers and the especially the administrative courts with their broad enforcement powers.147

Regionalism and decentralisation in German decision-making processes and implementation also contrast sharply with arrangements in Britain. Regional actions over vehicle emissions repeatedly activated policy in Germany. Once a environmental goals had been accepted by any one of the Länder, competitive and experimental elements were introduced into the national system. The increasing weakness of regional bodies in Britain, ie of the Counties and Local Government Authorities and their poor resourcing under the centralising regime of the Thatcher administration had the reverse effect. While institutional reform of environmental policy-making and implementation is now underway, this reform does not affect the underlying centralisation and closed,

146 K Hawkins, 1984, Environment and Enforcement: regulation and the social definition of pollution, Claredon, London.

147 E Müller, 1986, Die Innenwelt der Umweltpolitik, Westdeutscher Verlag, Opladen.

90 discretionary decision-making. These changes remain much less ambitious smaller than some had proposed.148

The institutionalisation of 'counter-knowledge' is another way by which environmental awareness may be created and disseminated. Environmentally engaged research institutes and scientific working groups will challenge established perceptions and research tied too closely to industry or government. Such bodies became well developed in Germany during the 1970s and 80s. While not absent in Britain and showing considerable growth in the 1980s, they are afflicted by the same difficulties as the environmental movement in general. The influence of independent environmental bodies in Britain seems to be directed more towards informing industry of European and British legislative 'threats' and requirements than in influencing attitudes and thus policy. The close links between research and central government research funding in Britain, and between government ministries and research laboratories may add to this weakness of independent science in public policy debates.

A greater faith in technology and technological progress, while not shared by everybody and seriously debated,149 is nevertheless judged to be more relevant in Germany than Britain. This reflects a tradition of higher status attached to engineering as a profession and the role of the engineer in society and as adviser to government. It surely underlies the more technology oriented environmental policy observed in Germany and may well have been a decisive factor in the differentiation of Anglo- German vehicle emission policy. In Germany, environmental awareness combined with a greater cultural readiness to accept technological change and risks. This in turn contributed to the tendency to satisfy the obligation to act with precaution by promoting best available technology (Stand der Technik). The range of professional expertise upon which a policy rests is clearly a major explanatory factor which determines the precise nature and direction of environmental policy. Here a further significant distinction between German and British environmental policy can be noted, b) Science or technology as driving force of policy

The role played by scientists and scientific thinking in the making and implementation of environmental policy is clearly of importance but may vary considerably given the large number of factors and types of knowledge which legitimately influence regulatory policy. Science alone is quite unable to initiative an active environmental policy. The belief that environmental policy should be based on 'sound science' was, however,

148 For proposals to alter the British institutional and philosophical basis see T O'Riordan and A Weale, 1990, 'Greening the Machinery o f Government', Friends of the Earth Discussion Paper N o.3. This publication was circulated in draft form in the Department of the Environment and claims that environmental politics has Anally arrived in Britain and proposed institutional changes with Germany as an example. 149 Only German appears to possess the concept of 'Technologiefeindlichkeit' - (hostility to technology).

91 strongly believed by British politicians (who are rarely trained in any scientific subject) and deserves to be analysed for its impact on regulatory policy.

In Britain the role played by natural scientists and employed by government either as advisers in quasi-govemmental bodies or as government scientists in Whitehall on associated government laboratories, is of major significance for environmental policy, while the legal and engineering professions appear to be much more neglected. They tend not to be seen as making contributions to the environmental policy formation process, but are called upon at later stages when practical matters have to be solve with respect to implementation or legislation. Scientists and/or politicians, therefore, tend to decide what is necessary or reasonable, given the constraints of economics and hence the limits imposed by the Treasury. Policy-making is viewed largely as a linear process in which great emphasis is placed on peer group pressure to reach consensus, but which excludes the public, the media and even political parties.

In the 1980s scientifically trained civil servants, many with direct and recent research experience in government laboratories, based their advice-giving on the view that environmental policy ought to be science-based. This meant that science, government scientists and research findings should play the major function not only in the identification, understanding, and measuring of environmental changes and damage, but also in providing the judgements and instruments required in the regulatory process itself. Preferred instruments for this science driven approach are not the formulation of discharge or emission standards, but rather environmental quality standards based on monitoring, risk and environmental damage assessment, as well as the identification of dose and effect relationships. Ideally, pollution control should be integrated in the sense that the impacts on all media should be assessed jointly and weighed against each other. Once environmental quality standards are fixed and the absorptive capacity of the receiving environment is defined, a largely site or land-use specific regulatory process with impacts on consents and, eventually, technology choice can begin. The inherent ability of this process to promote technological innovation is limited.

Unfortunately for Britain and its excellent science base, the human and financial resources which must underpin either a science based environmental policy, declined sharply during the 1970s and 1980s. This was particularly true for air pollution science and happened in spite of ambitious plans made in the in early 1970s.150 Earlier important improvement in air pollution had already reduced the attention paid by British pollution science to air as distinct from water. In the 1970s the monitoring of water in order to improve the regulation of waste disposal into rivers and estuaries

150 UK DoE, Central Unit on Environmental Pollution, The Monitoring of the Environment in the United Kingdom, Pollution Paper no.l, HM SO, London, 1974. The claim was made that Britain was probably better monitored for environmental quality than any other large, industrialised country.For reasons o f cost, however, only three were stations were planned for N O x .

9 2 attracted more funding and policy interest.151 Air quality (other than in inner city areas) was not generally considered to be a major environmental problem, in part for objective reasons related to atmospheric circulation.

The financial neglect of air pollution science continued until confronted with the German policy reversal on acid rain in 1982. Then the first response of government to demands for immediate stringent regulation was a call for more British scientific knowledge as the rational basis for decision-making. For this government had to rely largely on scientists and funds from the electricity and forestry industries, at that time both still owned by the nation. While there is no evidence to show that these 'institutional links' influenced the quality of the science that was done, anyone working for the Central Electricity Generating Board or the Forestry Commission was well placed to provide science-based arguments against taking very costly or hasty regulatory action.152

The British scientific community eventually became deeply involved in the debate about what types of damages are caused by acid rain, but only a handful of selected scientists was asked for advice. The members of the British scientific establishment who were included saw their role as one of supporting their government which they perceived as having been accused of unneighbourly behaviour without satisfactory scientific proof. They have remained sceptical about the causal links between acid deposition and forest damage and discovered many reasons for acid rain having positive as well as minor negative impacts. Government and industry in turn would use scientific scepticism to justify their own reluctance to act.

The British refusal to base policy on 'foreign' science and to insist on its own research in advance of making policy commitments, has since been openly criticised by the government scientist perhaps most deeply involved in the issue at the time. Martin Holdgate, at the time Chief Scientist at the Department of the Environment, wrote in 1989 that

"Repeated UK resistance to action to curb emissions of gases creating acid rain and emissions from motor vehicles, on grounds of 'not proven' did not help our reputation, since these actions appeared to many to constitute an arrogant dismissal of overseas experience and expertise." 153

151 S A Boehmer-Christiansen, 1990, 'Emergencing international principles of environmental protection and their impact on Britain, The Environmentalist, vol 10, no 2, Summer 1990, p p .9 5 -1 1 4 . 152 A recent view by the Forestry Commission agrees with R A Skeffington, a scientist responsible for CEGB based acid rain research, that 'pollution presents an additional stress (on forests), the impact of which is largely unknown'. John L Eines, Forest conditions and air pollution in Great Britain, Chemistry and Industry. 4 February 1991, p 79-81. 153 Martin Holdgate, 1989, The UK: helping to build the path towards sustainable development, CEED Bulletin No, 24. July/August , p 6. The Department of the Environment wanted to join the 30% Club for S02 emissions but was overruled in Cabinet.

93 In addition to this insistence on in-house research, advice was based on a second tradition; a pollution control philosophy that had developed during the 19th century and recently been abandoned in favour of more ambitious formulations.154 This was based on dilution, dispersion and monitoring concepts which did indeed require the continuous scientific assessment of effects in the environment.

From a more political perspective, it can therefore be argued that the British scientific community had developed an important role for itself in the administration of pollution control which was being threatened by new concepts from Europe and which it naturally resisted. By protecting their own legitimate interests, British scientists may have assisted in the weakening of British environmental policy. The advice which government received and the justifications by which politicians could be expected to be persuaded were very much dependent on trusted 'science' arguments, and even more importantly in the end, their cost implications. Science could therefore save policy as a figleaf.

British science therefore had good reason to distrust the environmentalists' precautionary arguments. A technology driven environmental policy tends to reduce the direct need of policy-makers for scientific advice, scientific research and hence funding, employment and influence. Tradition and interest ensured that British environmental policy would remain based on scientific evidence of harmful effects in the environment rather than on 'principles' like precaution or technical capacity or, even worse, public opinion. The weakness of this approach was revealed, however, when the power of making decisions passed increasingly into the hands of senior politicians with little knowledge or understanding of science or environmental problems, especially as the scientists advising government are strongly discouraged by law and /or peer group pressure from communicating with the public.155

German policy justification relied less directly on science and scientific advice, but more on public opinion and moral philosophy. Both of these were naturally influenced by science, but science coming from many sources and schools of thought, including those described above as 'counter-knowledge*. Post-war regulation had weakened the once very strong links between research, science and government, leaving the judging of the scientific evidence to the public rather than the government alone.

German law also helped. The 'Stand der Technik' criterion, the availability of technology, could replaced scientific evidence of harm as the operative principle for the implementation of precaution. This in turn would appeal to those whose job it was to encourage economic growth based on technical innovation and to industries in the

154 New key words are 'integrated pollution control', 'best available techniques'(NOT technologies), 'duty of care' and 'environmental stewardship’.

155 D A Everest, 1986, The provision of expert advice to government on environmental affairs: the role of advisory committees, Science in Public Affairs, vol 4 ,no 1, pp 17-40.

94 forefront of technological development. The commercial implications of such an approach, and its potential for being misunderstood abroad are obvious. In some British quarters at least, the German approach tended to be perceived as either 'political' and hence irrational and unscientific, or as motivated by commercial interest rather than genuine environmental concern.

By the early 1990s British environmental policy was still in turmoil. It had not yet recovered from the onslaught of European impacts, although legislative adjustment was well advanced. It had lost the distinctiveness and institutional underpining which it enjoyed under the label of environmental pollution control during the early 1970s. New institutions, in the shape of Regulators attached to newly privatised industries and equipped with powerful legal tools but as yet little else, were facing the difficult task of reversing economic fortunes with the aid of economic rather than environmental regulation. iv. The Evolution of Environmental Policy in Britain and Germany a) A three stage taxonomy

A three stage taxonomy of environmental policy developments has been recognized as typical of Western market economies. The three stages are 'ecological ignorance', the development of a 'symbolic policy’, and the achievement of 'technocratic effectiveness'.

While Germany has passed through these stages for most sources of air pollution during the 1970s and 1980s, Britain became trapped in the second phase for the reasons outlined above.156 An automatic progression from one stage to the next by all industrialised countries simultaneously and for the same environmental problems is clearly not indicated.

As shown above strong environmental pressures have allowed the German state to direct its power of legislation, persuasion and compensation into areas where industry would be most capable of effective action without doing harm to primary national goals, such as economic growth, the development of new markets and export potentials.

Recent governments in Britain, on the other hand, have been plagued by economic problems which were either not perceived as being related to environmental impacts because such impacts tended to be denied until acceptable solutions were available, or environmental regulation was not perceived as being able of playing a positive role in

156 This explanation is less obvious for large combustion plants. If the U K switches rapidly to combined cycle gas turbines for electricity generation (which is by no means certain), it would achieve large S02 and C02 reductions at minimal costs compared to Germany and with a greater efficiency of energy conversion.

95 technical modernisation. Deindustrialisation, (as Eastern Europe is now experiencing) reduced some types of pollution during the 1980s. In the absence of consensus about how to deal with pollution problems, environmental ambitions largely remain separated from efforts to stimulate economic growth. In this context, British environmental policy, especially industrial pollution control, had greater difficulties in establishing itself as an independent policy area. In contrast to Germany, inherited structures and philosophies tended to prevail at least until the middle of the 1980s.

The Federal Republic moved from the symbolic phase to effective implementation of acid emissions abatement towards the end of the 1970s. Most significantly, in 1974 the Federal Interior Ministry (BMI) had achieved the right to co-determine vehicle emission policy. During the early 1970s senior administrators in BMI enjoyed the full support of Willy Brandt and Hans-Dietrich Genscher and, during the acid rain debate, of the Kohl Cabinet. The former two statesmen ensured that the fundamental principles, legislative instruments and institutional structures for an independent environmental policy were in place, even though the political support for tough measures was not always forthcoming.

By 1982 the BMI could count on the support of the Federal Council (Bundesrat), a growing number of other ministries, especially of the Ministry responsible for agriculture and forestry. There was no Energy Ministry to oppose it on fuel efficiency or industrial grounds, the Ministry for Economic Affairs (BMWi) was politically weak and the Finance Ministry could be persuaded with the help of the Chancellor. The transition from symbolic policy to active implementation with respect to vehicle emission abatement could take place, as well as be observed to do so. This meant, above all, overcoming the inherent resistance of industry to commercial risk taking. Technological capacity, export performance and financial health made this task easier by allowing bargaining (including the creation of significant uncertainty and the encouragement of public protest) without threatening industrial decline, as might have been the case for British Leyland.

British environmental groups, less able to work through the political system and public opinion, had to rely on pressure group tactics. This probably encouraged the transition to symbolic policy, but tended to fail in relation to industrial technology, ie. in areas where the influence of industry on government was considerably stronger and votes where not at stake.

If there has been a major failure in Britain (as is suggested here), it has been a political one which can be traced, via the electoral system, to the very top of government and its decision-making machinery. The Conservative government of the 1980s turned to increased price competition as the answer to economic problems and to the withdrawal of state support to industry. Given these priorities, a proactive environmental policy became internally inconsistent and a major instrument to encourage what government in fact wanted most, new markets, new products and technological innovation, remained unused. To balance this generalisation, however, it also needs to be remembered that

96 British choices in the early 1980s were more difficult, given the state of the car industry and the ideological assumptions underlying macro-economic policy.

The British Environment minister tended to remain a 'single voice' in Cabinet, overloaded with even more problems than the German Interior Minister before the setting up of a separate Environment Ministry in Bonn in 1986.157 Without support from the most senior politicians and especially the Treasury, he could achieve little unless public opinion was deeply upset. This did not happen and is in any case a rare event in Britain.158 Symbolic policy, or even ignorance, tended to prevail in the acid rain debate. Vehicle emissions had little chance of becoming a subject of prolonged public attention.

At the administrative level, however, institutional weakness with respect to environmental issues such as air pollution, was not the major British problem. Had the system of air pollution control by Her Majesty's Pollution Inspectorate been given the human, financial and political resources it needed, it would probably have been able to cope on the basis of traditional arrangements, as had been expected during the early 1970s. HMIP was not, however, involved in the regulation of vehicle emissions which remained, at the crucial time, the joint responsibility of three ministries: Trade and Industry (DTI), Transport(DoT) and Environment (DoE), with the formal responsibility lying with the DoT and remaining there when the DTI relinquished its interest in the car industry in 1988.

In contrast to Germany, the British became increasingly involved in the vehicle emission debate not because of its legal responsibility, but because the EC Commission considered vehicle emissions to be an environmental subject and decided that negotiations were to be in the hands of environment ministers. It is therefore be argued that the UK missed its chance to move from symbolism to action when it failed to make environmental policy an independent policy area as happened, for example, in Japan, the USA and West Germany.

In late 1990, with the publication of the British government's long awaited environmental strategy for the next century, Britain again seemed stuck at the symbolic level for fear what action might mean for industrial competitiveness, inflation and the electoral chances of the 'party of government'. By 1992 the intention

157 The U K Department of the Environment remains a large bureaucracy responsible for housing and local government (including dog licences and the 'poll tax' which both interfered with environmental policy-making.) Cooperation across ministries remains difficult, especially if there is competition for funding and status, but is a remnant o f an earlier philosophy which wanted to 'integrate' the environment into all ministries.

158 That this need not always be the case is demonstrated by the revolt against the 'poll tax' which helped to bring about the downfall of Margaret Thatcher in November 1990.

97 of government to allow the integrated HMIP to develop into an independent US type regulatory agency, while holding some promise provided its powers and resources are improved, had not advanced by mid 1992 because of interministerial and interagency disputes.

The possibility of environmental policy becoming trapped in the symbolic phase is clearly not merely a matter of social movements and their impact, but needs to be explored in the broader political context and in relation to institutional as well as industrial developments.

b) Continued Industrial Decline in Britain or 'Ecological Modernisation' in Europe?

Those who decided the fate of British policy in recent years had an overarching aim which differed little from that of Bonn: to encourage economic growth and promote competitiveness. The instruments differed, however. Britain hoped to achieve its goals 'directly' on the basis of free market principles, through deregulation, weakened trade unions, the reliance on market forces and the price mechanism. Public expenditure was to be kept down by 'rolling back the state' wherever possible and increasing the disposable income of individuals to be spend as they saw fit. Not being able to increase the wealth of all, Thatcher accepted redistribution towards wealthier sections in the hope that this would stimulate investment and motivate innovation.

The German Government could not afford to be as radical, even had it wanted to be. It held on to the 'old-fashioned' social market economy, regulation and subsidisation of micro-economic activity, especially of R&D and environmental protection. By the end of the 1990s the German economy, in spite of problems relating to unification, appeared to be in considerably better shape than its British counterpart.

The reasons for the now apparent failure of the Conservative's programme for halting Britain's economic decline are complex, but it can be asked whether at least part of this failure is attributable to Britain's reactive, cost conscious and science-driven environmental policy. If this were to be the case to some extent, as is suggested by our analysis, then the hypothesis can be advanced that Britain's industrial decline is the partial result of its failure to develop an effective technocratic environmental policy in the 1970s, ie. of moving towards stage three of environmental policy-making. This in turn, leads to the more challenging hypothesis that the causes of British industrial decline may not be associated primarily with economic and cultural factors, but is due to the processes by which major decision are made and especially social movements were excluded from having an effective impact on these decisions. The challenge is directed at the nature of the political system, ie. to a dimension of society of which Britain is particularly proud and which may be more difficult to change than many others.

In support of this hypothesis, it can be shown that industry itself recognized (after 1985) that official disinclination to regulate may have been a serious commercial

98 mistake,159 When industry finally made its voice heard in the late 1980s, it was however, about to face a major recession with high inflation and high interest rates making arguments against investing in seriously in environmental protection (beyond what is now required by EC directives) as strong they have ever been. Society itself was becoming increasingly dissatisfied with the political system, as illustrated by the 'brutal' dismissal of Margaret Thatcher from office in December 1990, the cautious discarding of many of her policies and growing support for proportional representation, an elected second chamber, a freedom of information act and a bill of rights.160

UK environmental policy is therefore likely to remain symbolic and reactive to European initiatives, as happened in the vehicle emission case. Yet the outcome of this dispute should give British policy-makers much food for thought, and there is some evidence that this has indeed been the case. It is impossible to show that the government's noble fight for lower standards helped British industry to maintain its industrial and technological capability.

In the sense that the outcome of the European vehicle emission debate strengthened the integration of a European market for the production and consumption of vehicles by promoting techno-economic restructuring, it was clearly successful. Yet it may well have done so at the expense of the total environment, of technologically weaker firms, more vulnerable environments and weaker economies. Our final question can now be raised.

c) Can market economies solve regional or global environmental problems?

The vehicle emission case, once it is placed in the wider environmental policy context, can be used to identify the main responses which make international agreements involving a common technological solution possible. The impacts of these solutions on the parties themselves and on others countries then allows some speculation about the general consequences of common regulatory solutions for economies at different stages of ecological modernisation and for their natural environments.

It remains difficult to conclude that the resolution of vehicle emission conflict has achieved very much for the environment. In Germany, car ownership, and the large, high performance car have not lost their socially acceptability and speed limits remain unacceptable. The Single Market will further encourage the Britain to promote a general 'catching up' in car ownership by building more roads to cope with an envisaged doubling of the number of cars and increased lorry traffic.

159 Interviews with the members of the Confederation of British Industry and CBI documentation.

160 The Rowntree Trust's 'state of the nation' poll revealed tha 50 % o f these interviewed supported proportional representation (27% had no opnion); 40 % wanted an elected second chamber, 77% a freedom of information act and 72% a bill of rights. The Guardian. 25 April 1991, p. 7.

99 Two chief variables have been identified as essential for ecological restructuring:

the industry must remain competitive globally, ie. lean and efficient, which is also synonymous with job losses or the loss of future jobs for young people in a particular area or industry;

the 'greening' of political environment to ensure a market for the new product.

Both industry and politicians in France and Italy (major car producing countries successfully exporting to West Germany) in the end saw benefits for themselves in switching to catalytic cars. A classic development towards an effective technological solution had taken place. But what were the consequences for Britain?

The UK owned car industry has virtually disappeared, more Britons than ever now buy foreign cars, but are selling fewer of their own.161 This has helped to make the British trade deficit the largest in history. Britain is now the most open car market in Europe and is beginning to prepare itself for accommodating another 30 million cars by the year 2010.

More generally, the possibility that rapid adoption of higher environmental standards by firms in one area may have considerable negative economic effects on other, weaker firms and hence regions, must be envisaged. This means that our initial hypothesis, ie. that all capitalist states would behave similarly and benefit equally, both environmentally and politically, from the demands of new social movements for more environmental quality, must be qualified. Weaker national industries will collapse or require protection from too rapid technological change. Otherwise regional inequalities will increase. Protection of weaker industries seems justified as long as the delays won by intergovernmental negotiation are used to catch up in competitiveness. Yet this alone does not solve the questions of growing unemployment which appears to be increasingly associated with the emergence of highly competitive firms.

In the end, as this case study demonstrates, it has been commercial considerations rather than environmental ones which have determined the outcome of intergovernmental environmental standard setting for vehicles. It is difficult to envisage anything else for such a major industry. Uniformity of standards does not ensure uniformity of environmental protection, especially if the environment as a whole and not merely air quality is taken into account.

161 This is not entirely true as exports from Britain picked up in 1990, but total employment levels in the industry continued to fall rapidly.

100 X CONCLUSIONS OF THE REPORT

Two classes of conclusions are put forward, the first relating to the specific issue of Anglo-German negotiations on uniform emission standards for vehicle exhaust gases in the context of European economic integration, the second, more tentatively, to the role of social movements in environmental regulation and the international impact of such regulations.

Seven major conclusions can be drawn from the vehicle emissions debate and its resolution, six from the study of social movements and their impacts. Together they are to contribute to the discussion of the two questions raised at the beginning: why did social movements in Britain fail to have a similar activating impact on British environmental policy and hence the modernisation of industry, and what are the likely international effects of successful technological environmental crisis management in one advanced industrial country.

i. The Anglo-German Negotiations

1) Because of its major technological and economic impacts, vehicle emission regulation is a highly complex technical and political process. Industry therefore became a major partner in the negotiations.

Negotiations were required between at least four types of actors - firms (some national, others multinational), government departments, Commission directorates and governments. These took place at four levels - corporate, intercorporate, governmental and intergovernmental. Social movements and political parties further complicates matters and are best viewed as potentially able to influence all actors. The goals (or preferences) of the parties at all these levels changed over time, making time itself a major ingredient of the negotiations by allowing for adjustments and revised perceptions. Even if justifiable exclusively with reference to environmental impacts, emission standards cannot be understood as exclusively environmental instruments.

British competitive weakness was threatened by stringent emission standards, but the strategy adopted (resistance and delay) led to further losses because of decisions based on short-term economic criteria. Technological weakness and the unwillingness to make new investments persuaded firms and government to reject the autocatalyst until overruled in Brussels. In Germany, on the other hand, the decision in favour of catalysts, while by no means easy, meant that government shared the risk of adopting a higher cost technology. Environmental awareness was therefore promoted by government both to put pressure on industry to invest and to ensure markets for the low emission car.

101 2) Commercial competition was particularly intense because of the impact of emission standards on technology choice (autocatalysts or leanburn) and hence compliance costs for individual firms. Intergovernmental conflicts, already reflecting commercial competition were sharpened further by allegations of transfrontier environmental impacts.

Because of differences in compliance costs at national and firm levels, agreement on uniform regulations for all cars was particularly difficult to achieve. Compliance costs were largest in both countries, but considerably larger (both absolutely and relatively) for British firms. Conflict resolution therefore had to take into account asymmetries between countries and members of the same industry. Compliance costs were larger for the producers of smaller vehicles using certain types of engines. In the bargaining over the allocation and acceptability of these costs, firms with strong links with the United States, producers of high performance cars and using engines more readily adopted to the use of unleaded petrol, enjoyed advantages. All these factors favoured Germany.

Car firms did not, however, behave highly competitively and agreed, through their own European and national organisations, to resist regulation until most disadvantaged companies had been able 'to catch up'. This in the end meant that the more successful firms had to bear more of the development costs and risks associated with the adoption and acceptance of a new technology. Technology transfer desired on ecological grounds will not be a smooth process which government and even less so industries, can arrange among themselves.

3) Given different political contexts, technological and environmental regulatory baselines, as well as environmental knowledge bases which were by no means agreed, long-drawn bargaining processes were unavoidable.

These differences endowed each government with a different space for policy action ('Handlungsspielraum'). The German policy space was not only considerably larger, but was deliberately enlarged by government when it appealed to public opinion, actively promoted environmental awareness and adopted a proactive stance towards vehicle emissions in the early 1970s. Once the German government had succeeded in turning its own industry 'around', the outcome was virtually predictable given Germany's influence in Europe, the capacity of its car industry and the strength of the German vehicle market. It is also clear, however, that the creation of an agreed knowledge base would not have removed the major causes of disagreement.

4) The regulatory debate about emission control technology choice was eventually decided by a complex mix of commercial interests and corporate preferences rather than environmental cost/benefit analyses.

102 Environmental and economic science played only a background role in standard setting and intergovernmental negotiations. These were concerned primarily with technology choice and compliance costs.

If science played any role beyond the revising of threat perception, this was to serve as justification rather than as a determinant of policy. The costs to industry changed as technology advanced towards the 'electronic car', autocatalysts became more reliable and the facilities for their testing and maintenance became available. Governments or parent companies assisted weaker companies to adopt the new technology, but industry also ensured that 'pollution havens' remained were older models could be sold profitably. Britain has remained such a haven because of political failure.

5) Britain fiercely resisted autocatalysts in order to protect a weak car industry undergoing privatisation. This was politically possible because environmental policy had badly neglected mobile emission sources.

British resistance itself was both strategic (reflecting a genuine European engineering debate about the future of vehicle technology given a range of conflicting objectives) and tactical, concerned with gaining time for British industry to become more competitive by privatisation and attractive to inward investment. Yet after 1988, EC emission policy changes meant that the cost of having backed the wrong technology fell on the weakest firms based in Britain. By having supported the leanburn engine for too long, the British government probably assisted the decline of the British owned car industry and manufacturing base in general.

6) Adjustments in Britain had to happen largely in response to external pressures and with little public involvement. In contrast, an alliance between industry, government and significant sections of the public in favour of autocatalysts had been created in Germany by 1985.

The nature of British and German society, especially differences in the impact of environmentalism on politics and environmental policy, were ultimately responsible for the debate and its outcomes. This outcome also reflects the changing decision making rules in the European Community and the gradual emergence of a leaner, more competitive European car industry with reduced British participation.

7) The perceptions of environmental and health threats associated with vehicle emissions in general was considerably stronger in Germany than Britain.

103 This is best seen as both cause and effect of German environmental policy, initiated by both official action and environmental lobbies. Environmental priorities in Britain remained much less focussed on air and technology. From the late 19th century until the 1960 Britain had been in the vanguard of air pollution control and its relative ’environmental backwardness' is a fairly recent event reflecting a deeper societal malaise.

ii. The Role of Social Movements

The comparison of two similar countries, which have yet diverged significantly in recent decades in industrial strength and environmental performance, stimulates a number of thought provoking hypotheses.

1) Success achieved in some countries may delay rather than encourage progress elsewhere because of the economic and political impacts of such leadership abroad. If environmental protection is a prize to be won by success in competition, then environmental quality among the losers is not likely to improve.

This raises very much deeper questions about the role of government in societies which do not generate commercial winners. If market economies with different technological and political capacities find themselves in unequal competitive situations, should state intervention protect industry, allow its decline or help industry to catch up? Assuming that the ability of the state to intervene effectively depends on the political strength of social movements, ie. on the willingness and capacity of the state to use their strength as an ally in the modernisation process, then the nature of the state and how it makes and implements decisions becomes of the utmost importance.

2) Fundamental political and institutional asymmetries, rather than the more apparent economic ones, best explain the partial failure of environmental pressures to compel a technology-based environmental policy in Britain.

If this analysis is correct, national decision-making structures and capacities are of vital importance in explaining international policy differences and hence offer an understanding of the obstacles to international environmental agreements. The relative isolation of British administrators from broadly-based expert advice, as well as the remoteness of political decision-makers during the 1980s from large sections of their own society and European thinking, probably weakened official learning capacities in Britain. In the early 1990s there were some signs that British society was questioning its own assumptions and institutions., while Germany appeared to be turning inward as it attempted to cope with the acquisition of the former East Germany. Societies are continually changing and to make predictions about the future course of environmental policy would be foolish indeed.

104 3) The British state had been less able than the German one in 'steering the economy' towards effective pollution control because of its reliance on party-political preferences rather than policies based on societal concsensus.

During the 1980s, under the influence of free market doctrines, the British state reduced its formal powers over economic activity without, initially at least, a compensatory strengthening of environmental regulation. There was no attempt therefore to use the power of social pressures (other than voluntary consumer behaviour) in the promotion and dissemination of technological and behavioural change. The British consumer remained unconvinced about the damage associated with air pollution and government, by its inaction, strengthened this perception.

4) Britain therefore remained the 'dirty man of Europe' with respect to emissions to the atmosphere for much longer and with harmful economic effects than would have happened had government pursued a more active, technology based environmental policy.

This surely reflects and inability to arrest industrial decline rather than a lack of concern for the general environment. The reasons for British industrial decline are complex, but appear to relate, in part, to the British failure to create a system in which demand for more pollution control could express itself and be translated into technological change.

5) If the hypothesis that environmental policy must force technological change in order for advanced industrial societies to survive politically as well environmentally, is correct, then the political stability of Britain must now be considered endangered.

There is some evidence that profound changes are desired by British society. The United Kingdom may well split into two or more parts and some fundamental institutional reforms may have to be undertaken. On the other hand, environmental decision-making may move almost entirely to the EC. The question then becomes whether the European Community together will achieve technological competitiveness and environmental protection and what the impacts will be on the global environment.

6) Uniform intergovernmental technological solutions tend to produce outcomes which are likely to benefit technologically more advanced firms and economies. Weaker countries and their national environments may be further degraded.

Moving Europe together towards sustainability will not be free of conflict. In Germany, environmentalists tend to doubt that European integration and the Single

105 European Market will satisfy its own ambitions.162 The attitudes of environmentalists in different countries to uniform environmental standards, so much beloved by sections of industry as creating 'level playing fields', are therefore likely to be as conflicting as those of their governments. Any conclusions one might draw about strong positive linkages between social movements, political stability and effective environmental policies, however relevant at some national level, would seem to be based on very insecure foundations internationally.

The feared (and now largely realised) negative impacts of uniform European regulation on British industry not only help to explain the indecision with which British society faces Europe, but also raise questions of the distribution of wealth internationally. Further growth in this imbalance may not be 'sustainable' politically because of the absence of redistributing supranational institutions. Environmentalists outside the EC will not be able, like the British environmental movement, to call for a redistribution of funds as a common environment deteriorates because of economic weakness.

7) The international impact of 'successful' ecological crisis management by a few members of developed capitalist states weaken global environmental protection.

As other countries attempt to catch up with the 'winners', but in different social, environmental and economic circumstances, the exploitation of natural and human resources is likely to increase either through trade, excessive development or lower living standards. The transfer of advanced clean technology remains unlikely in conditions of poverty and insufficiently developed skills.

Profound disagreements among environmental movements, governments and industries about the stringency of environmental standards and the need for uniformity in international technical regulations are likely to continue at the global level. There are no other tools available for the resolution of such conflicts of interest, perception and priority than informed and open bargaining. The Anglo-German vehicle emissions debate was resolved by bargaining lasting almost a decade. Much of this was behind closed doors and might have been shorter and less painful had it been better informed as well as less concerned with national rather than European interests.

162 For details, see EG-Binnenmarkt und Umweltschutz aus der Sicht ausgewahlter gesellschaftlicher Gruppen, ifo-Schnelldienst 16-17/ 1990, Munich.

106