Are North American Automakers Ready for a New Paradigm?

The state of the North American auto industry has become an internationally relevant crisis that few of us can ignore. Of course, many of us will say ‘they had it coming’, and we environmentalists will secretly welcome the prospect of an end to business models and marketing responsible for spewing forth parking lots full of SUVs.. however, this won’t be a walk in the park for anyone. The North American economy in general is highly dependent on the Auto industry, and in many local economies its significance is much greater. The secondary effects of a downturn in this sector are likely to branch out to all areas of the economy. Some hard-core environmentalists may argue that for the environment this is not necessarily a bad thing, as consumption is reduced, so is the impact associated with it. However, for environmental market transformation, this is not great news. As economies falter, prices for energy fall, reducing incentives to conserve and drive markets for new, more efficient products.

Clearly some kind of bailout is necessary to avert the economic and social crisis that could befall North American automakers, but will it be enough to get them on track? Can the same leadership that got them into their current position be trusted to bring them out of it? How effectively will a strategic change be implemented across the vast, unionized, and capital intensive operations of the auto sector? The road ahead for these companies is a path full of obstacles. The global economy is one, however even with a strong economic outlook the writing is on the wall for Chrysler et al. Chinese automaker BYD just announced its first hybrid, a plug-in hybrid that effectively leapfrogs the incumbent competition, and offering a 100km range on batteries alone, and a price of roughly $22,000. This is still expensive for the Chinese market, but looks pretty good compared to the alternatives here in N.A. If this company is able to access the full potential of its export market, it stands to do very well. Warren Buffet seems to think so, as he’s currently invested in 10% of the company.

One notable difference between BYM and the struggling North American automakers is that it began life as a battery company- it makes 30% of the world’s cell phone batteries, which gives it an edge on a critical component for plug-in hybrids. For this reason it is far better suited to changing the technological paradigm of personal transportation than its competition. Auto manufacturers are steeped in the history and culture of the internal combustion engine. Envisioning the automobile of the future as an intelligent, electro-mechanical appliance as opposed to an integral link in the petroleum economy will be far easier for companies who possess the capacity for innovation, and for re-imagining the cultural relationship between cars and people.

LCA is the answer, but who bears responsibility?

Lately there have been some interesting headlines. “Hybrids less sustainable than Hummers” was the general gist of a CNW report analyzing so-called ‘dust to dust’ emissions impacts from manufacture and use, a full life-cycle analysis (LCA) if you will. Are there some tenuous assumptions at the root of this? Probably. Is there any truth to it? Yes. This is a prime example of why life-cycle analysis is important- buying a car because it is more efficient to use ignores the environmental costs that the consumer doesn’t see- when there is no requirement for companies to build these costs into the products, there is no incentive to avoid them. In the end, auto makers care more about selling cars, while the market must demand efficiency. However, the use of LCA to justify the ‘green superiority’ of current technology over emerging technology is misleading. The truth is, nobody who buys a hummer or a hybrid is doing the environment a favour- both require enormous energy and raw materials to produce, and require fossil fuels to operate. However, whereas hybrids can reduce ongoing fuel use, especially as energy for production can increasingly be sourced from cleaner alternatives (such as renewables), conventional gas-guzzler technology marries consumers to a future of increased fossil fuel dependence. Hybrid technology is at the beginning of its cycle- meaning it is more costly to produce (financially and environmentally) at this point in time, but as adoption grows and efficiencies from scale can be acheived, these costs will be expected to decrease. Choosing a hybrid therefore means being part of the vanguard of market transformation, as opposed to being part of the resistance to it.

The same analysis applies to the debate on local vs. imported foods. Fuel use in transportation is not the only environmental impact of food production, and evaluating food with this metric alone ignores the fact that some places are simply better for growing more food at a lower cost (both financial and environmental). Agriculture and specialization are social advances that allowed us to produce more, using less energy than our hunter-gatherer ancestors. That being said, a lack of inclusion of environmental costs throughout food production and supply chains means that consumers are once again left without any clear indication of what is the more ’sustainable’ choice.

It turns out a big reason for CNW’s low scoring of hybrids in terms of environmental impact stems from the quantities of nickel used in their batteries. Much of this comes from our very own Sudbury, Ontario, and the operations there have not had a stellar record in terms of the environment (though they are improving). So how can Toyota minimize the impacts of the nickel that goes into their batteries? The choices, including buying nickel somewhere else, or switching technologies (future hybrids will almost certainly use lithium batteries, for capacity reasons) may not make economic sense- and we can’t expect companies to operate against prevailing economics. If Inco or Falconbridge on the other hand had to factor environmental costs into their prices, then there would be an economic incentive both for them, and their customers, to seek less polluting alternatives. Unfortunately, leveraging a local tax or fee against a commodity will necessarily harm export revenues- few governments would be willing to take this on as a policy project.

On the other side of the coin, would increasing the costs of such commodities mean that technologies such as hybrids wouldn’t get developed? Well, let’s not forget that steel, petroleum and other more conventional raw materials all have associated costs too- a comprehensive integration of environmental impacts into all raw materials would drive us to use less of everything- maybe we’d forget about the hybrids vs. hummers debate and be riding bicycles more.

LCA is important in evaluating the overall impacts of the products we buy and use, but asking consumers to make choices where the economic realities don’t reflect the environmental realities doesn’t make sense. It all comes down to creating economic instruments that reflect the existing externalities associated with industrial activity. While there is opportunity for voluntary action by companies, what consumers need are standards and assurances of transparency, without having to do all their homework themselves. We clearly need policies to put this in place- unfortunately this will probably degenerate into finger pointing over who bears the responsibility for what costs, and how much each industry and sector must pay.

Governments have to start thinking strategically- like some of the best-in-class companies who are taking the lead on environmental issues, and creating the infrastructure needed to transform themselves. Think of BP, DuPont or Shell as companies that have taken on the responsibility to transform themselves towards sustainability. This requires the destruction of traditional sources of value, but in the end will enable the creation of new ones which are better positioned for the future. In particular, Canada cannot let itself become complacent in an environment of rising commodity prices. The resource sector is booming, but we are already seeing a rapid erosion of domestic ownership in resource companies. While our natural endowment in resources is largely responsible for our strong economic position now, if we don’t invest in innovative sectors such as clean technology, we risk compromising future competitiveness.

Lifecycle Analysis Site

The Institute for Lifecycle Environmental Assessment has reviewed and summarized some research papers on lifecycle environmental assessment, and although many of the analyses are dated, and limited by criteria used, there is some interesting reading. For example, foam vs. paper cups vs. reusable cups? Ever wondered about the environmental impact of various packaging materials? How about the energy usage and toxic materials produced during manufacturing and use cycles of automobiles?

The site does not go into a great deal of detail, but does provide a basic summary of the research. This would be a good starting point for anyone doing research on LCA topics.

Sustainable Condo at IIDEX

Just thought people would like to hear some good news for a change…:)

IIDEX/NeoCon 2006 will feature a “sustainable condo” exhibit, designed by Busby Perkins Will Architects, for EcoSmart Foundation, in partnership with the Government of Canada and others. More details on the features and design elements of the condo model can be found at www.sustainablecondo.com. Very cool.

And there’s more good news: Until September 15, attendees can get free admission to the exhibit hall ($25 otherwise) by registering at the IIDEX/NeoCon website.

And in case you’re not going to IIDEX/NeoCon, you also get a chance to see it at the International Home Show and the Toronto Regional Green Building Festival later this year.

Cities: The Careless and the Carless

An article in the travel section of the Globe and Mail today prompted this entry- it was an article about Montpellier France, an urban centre off-limits to cars. One observation is how pedestrians in a city are able to experience much more, and without the worry of cars, people are more free to do so. As a former automobile commuter, I now appreciate the ability to take public transit, walk, or bike to almost everywhere I need to go (benefits of living and working downtown Toronto- this model certainly doesn’t extend far enough across the GTA). I’ve also noted a distinct difference in perception resulting from the use of different transit modes. For example, nothing creates a more insular detached and uninspiring view of the urban environment than car travel. Whether walking or taking public transit, we are forced to be aware of those around us (either pleasantly or unpleasantly, but the experience nevertheless has a grounding effect on our conception of social reality), and the immediate human-scale amenities of the city (or lack thereof).

This brings to my mind other inspiring examples of transportation planning done right. Curtiba, Brazil, is a noted example and has employed networks of buses to achieve ridership rates of 70% among commuters, despite having one of the highest rates of car ownership in Brazil. As a side note, the bus system is privatized- 10 companies own and operate the bus systems, and operate without any subsidies.

The article’s author, John Allemang, contrasts the city’s philosophy on urban development with that of Toronto, where a streetcar right of way project on St. Clair Ave. has produced considerable opposition. Toronto stands, along with many North American cities, as an example of automobile-centric planning philosophy- plagued by smog, traffic congestion, and sprawl. An underdeveloped public transit system fails to compete with the alternative, and without ridership growth, must rely on government funding to continue to operate.

The worry of groups such as “Save our St. Clair” that oppose further development of public transit is that it will disrupt local businesses by reducing car traffic. I believe that this is a short-sighted objection- and I would contend that these local businesses are able to survive because St. Clair has the benefits of local pedestrian traffic due to the proximity of relatively dense neighborhoods, and streetcar transit. By giving free reign to cars, St. Clair will become simply a 2 lane thoroughfare, allowing expanded development in the west end of the city (where already a cluster of big-box stores has emerged), and impacting the local businesses.

We already know that car-centric design and sprawl are unsustainable. This concept of urban planning is based in a time where the abundance of fossil fuels seemed limitless, and that an automobile centered lifestyle would provide us with social advantages of freedom and convenience, instead of confining with congested freeways and downtown gridlock.

Transportation is a major planning concern, especially for a city which is already so spread out. There are plenty of working models we can look to, whether it is the streetcars and pedestrian-only areas of Montpellier, the buses of Curtiba, or the bikeways of many European cities. Toronto needs to take as example the best practices of cities that have succeeded in gaining reductions in automobile use while preserving the utility of urban spaces.

Dissertation on Sustainable Design via You Tube

Ok, more amusing than insightful, but has a message. Besides, when was the last time you were inspired by a cardboard box costume?

http://www.youtube.com/watch?v=6M-5fkLQVs4