The transport sector is the Europe's biggest obstacle to meeting its climate-change targets. But there are several ways in which the EU can take the initiative and lead both its citizens and its automotive industry in a cleaner direction. Bruegel fellows Simone Tagliapietra and Georg Zachmann discuss their research and policy conclusions in this episode of 'The Sound of Economics'
Just how exposed is Europe’s automotive sector to a potential escalation in the EU-US trade war?
A country’s relative strength in exporting a certain product is likely to persist. But it is easier to gain a comparative advantage in exporting low carbon products. When it comes to R+D, strength in a certain technological field is much less linked to past specialisation. This also holds for low carbon technologies. Finally, our preliminary findings are consistent with the view that R+D can help a country specialise in clean technology exports. However, we are not yet able to show that policy action supporting R+D in clean technologies is a sensible way to develop a comparative export advantage in these sectors.
Trade with Mexico is a controversial topic for the new US administration. And the automotive sector is emblematic of Trump’s promise to bring manufacturing jobs back to the USA. But a look at the numbers reveals risks in any shake-up of cross-border trade. 22% of US automotive exports to Mexico are later reimported as part of cars “made in Mexico”. And disrupting production chains could have repercussions around the world.
On Friday 18th September 2015, the U.S. Environmental Protection Agency (EPA) reported that according to their analysis, Volkswagen engine software had been manipulated to show lower pollution results when engines were tested.