Reducing automotive emissions–The potentials of combustion engine technologies and the power of policy

Reducing transport emissions, in particular vehicular emissions, is a key element for mitigating the risks of climate change. In much of the academic and public discourse the focus has been on alternative vehicle technologies and fuels (e.g. electric cars, fuel cells and hydrogen), whereas vehicles based on internal combustion engines have been perceived as close to their development limits. This paper offers a different perspective by demonstrating the accelerated improvement processes taking place in established combustion technologies as a result of a new competition between manufacturers and technologies, encouraged both by more stringent EU legislation and new CAFE levels in the US. The short‐term perspective is complemented by an analysis of future improvement potentials in internal combustion technologies, which may be realized if efficient regulation is in place. Based on a comparison of four different regulatory approaches, the paper identifies the need for a long‐term technology‐neutral framework with stepwise increasing stringencies, arguing that this will encourage continual innovation and diffusion in the most effective way.