Sustainable transport: growth of UK car industry driven by climate change policies

Policies focused on cutting carbon emissions have played a crucial role in getting the UK’s stalling automotive sector back on the road, according to a new report.

Published on Tuesday, the study shows how consistent government policies and stakeholder involvement could result in both green achievements and sustained growth.   

In the early 2000s, the British car industry was in decline, until collaborative policies were introduced because of the need to decarbonise road transport, the report says. 

Since the launch of the Low Carbon Vehicle Partnership (LowCVP) in 2003, which brought together the industry and government, as well as investors and green groups, the sector’s turnover rose from £46.3 billion to £64.1 billion in 2013. 

Productivity is also up by 45% per worker and exports are up to 77% from 70%, while production has almost returned to pre-recession levels.

Over the same period of time, fuel economy has risen from 42.2mpg to 56.3mpg and average new car tailpipe emissions have fallen by 25%, meeting the EU’s 2015 target two years ahead of schedule. 

Carried out by consultancy firm E4tech and the Centre for Automotive Industry Research at the Cardiff Business School, the industry survey involved extensive interviews with stakeholders, senior executives and industry leaders.

Overwhelmingly, these interviewees agree that the last decade’s progress can be credited to a long-term policy approach.

In particular, respondents praised the EU’s rigid fuel efficiency and emission reduction standards and the UK Climate Change Act – regulation that created certainty and stability.

“It’s unusual to receive such a consistently positive message when reviewing the effects of government policy,” said Adam Chase, director of E4tech and an author of the report.

“Time and again we heard that a long term vision, collaboration and supportive policies are giving companies the confidence to invest in low carbon developments. Where these are missing the opposite is true.” 

However, the report also warns against complacency, noting that much must still be done to meet the UK’s long-term climate change targets.  

Andy Eastlake, managing director of LowCVP, said, “The job is far from done.

“We urgently need to repeat the success seen in our passenger car and bus sectors, in all aspects of road transport such as the truck and commercial vehicle industries and of course the supply of low carbon fuels and energy to power all forms of transport.”

Further reading:

Seven carmakers set to miss EU emissions target

Electric cars clock up half a million miles on Ecotricity’s Electric Highway

Traffic emissions could rise but are ‘manageable’, UN says

Paris bans half of cars from its roads to tackle pollution

The Guide to Sustainable Transport 2014