On December 12 the jubilation from Le Bourget, France, a
suburb of Paris, was apparent. From a beaming Al Gore to a
euphoric U.N. Secretary General Ban Ki-moon, conference
participants cheered history being made as nearly 200 countries
the Paris Agreement, a pledge limiting greenhouse-gas
emissions in five-year increments.
Many of the signatories have already reported their targets
for 2020, including the U.S. Still, after the champagne corks
flew, just what did they agree to, and what will it mean to
investors in a still-major industry, the auto industry, for the
economy and the environment?
A number of environmentalists, including the
father of climate change, Columbia University
professor James Hansen, dont think the document goes far
enough. After all, U.S. secretary of State John Kerry made sure
the word shall was replaced with should
when the former was inserted, supposedly accidentally during
typing, in a critical part of the pact. The reason: To ensure
that the so-called agreement avoided Congress altogether.
Its also unclear how a nonbinding agreement will
affect industry. Carbon dioxide reductions that call for
keeping emissions low enough to halt the temperature rise at 2
degrees Celsius arent necessarily in many companies
short-term interests. Sure, oil and transportation companies
flocked to the
21st Conference of the Parties meeting (COP21) outside
Paris, but were their hearts truly in it? All you have to do is
drive on a highway to realize that Americans remain almost
pathologically in love with sport utility vehicles.
Brian Irwin, a Dallas-based partner at Chicago consulting
firm A.T. Kearney who leads the firm's automotive practice,
says of about 17.5 million cars sold in the U.S. last year,
only an estimated 3 percent of them were alternative-fuel cars
and light trucks.
When it comes to adopting electric vehicles (EVs) and
hybrids, Irwin is bullish, even though numbers havent
spiked. Back in 2011, we sold roughly the same amount
[percentage-wise of alternative vehicles], he says.
The penetration of alternative powertrain cars was
similar in 2011 as in 2015 as a percentage of total cars
sold in the U.S. In both years that was roughly 3
Tesla Motors, based in Palo Alto, California, sold
approximately 50,580 EVs last year, mostly Model S sedans.
High-profile Tesla buyers, such as
The Late Shows Stephen Colbert, have helped raise the
profile of these EVs.