How policy networks may enable transition to a sustainable Plug-in electric vehicle? [1]
Abstract
California zero emission vehicle mandate was once the most daring and controversial policy ever made regarding clean environment and sustainable transportation particularly in the United States. The policy process was not clearly revealed but the unprecedented policy impact and coerces the automakers to develop Electric Car. This essay focuses on policy networks and games to understand the failure of a ZEV ‘green’ policy.
Introduction
California Zero Emission Vehicle Mandate (ZEV) was first introduced in 1990 by the California Air Resources Board (CARB). The mandate considered as one of the most ambitious environmental policies regarding to the transportation sector. The mandate is simple, it required that if automakers want to continue sells light duty vehicle car in California they have to sell pollutants free car. It was expected that starting in 1998 the amounts of zero emission vehicle will be 2% and increased to 5% in 2001 and to 10% in 2003.
The mandate directly gave impact to automakers and coping with this mandate the automakers were only have two options, comply with the law or fighting it. However the automakers did both options.
Meanwhile CARB provided biennial reviews to examine the mandate with stakeholders. However, biennial reviews resulted with several amendments and eventually weakened particularly the percentage targeted zero emission vehicles after a decade since the mandate firstly introduced.
At the end of year 2000, Chevron Texaco bought the majority stake on the NiMH battery manufacturer of GM-Ovonic later named as Energy Conversion Devices Incorporated. Subsequently on March 6,2001 as the new Chevron’s subsidiary, Energy Conversion Devices Inc. filed suit against Toyota Motor Corporation and Panasonic EV Energy Co. for alleged patent violation. Nonetheless the term of the arrangement was kept confidential, yet Toyota closed their production facility and the batteries no longer available in the market.
In 2002 GM and Daimler Chrysler sued California Air Resources Based to calling off the zero emission vehicle mandates and the Bush administration later joins the suit. Eventually on April 24, 2003 the ZEV mandate was repealed.
This essay will focus on the policy analyses based on managing networks in the public sector (Erik Hans Klijn, 1995) and politics of network governance (Thomson, 2003) to understand the failure of California Zero Emissions Vehicle mandate.
Policy Network
The main character of a network is a set of largely stable pattern of interdependently actors within a bounded domain where interactions of many interests take place. The shape of the pattern is formed, maintained and changed by a series of game (Erik Hans Klijn, 1995) . There are four kinds of network identified included corporatism, elites, associationalism and network of dissents (NGO). (Thomson, 2003)
Figure 1 shows how various networks organized. The networks include California State Government, automakers, battery manufacturers, Chevron, the Bush administration and Environmental association and EV supporter.
CARB is a public authorities within California State Government. The board adopted the ZEV mandate in September 1990 to overcome the worst air quality issues in South California, particularly in the Los Angeles area.
The automaker networks are the big auto manufacturer in California included GM, Toyota, Ford, Chrysler, Honda, Nissan and Mazda. After several years of research, the automakers seen electric vehicles powered by 100% electric sources of battery as the answer to comply with the regulation.
The battery manufacturer networks are included Ovonic, Panasonic, Toyota and other battery manufacturer. In 1994 Ovonic founder formed a joint venture company with GM where GM had 60% stakes in the new company namely GM-Ovonic.
Chevron Texaco is one of the biggest oil company in the United States of America . Chevron Texaco considered as one of among the seven sisters company who dominated oil industry worldwide. Chevron Texaco was not directly involved in the network.
Chevron Texaco involved in the network since October 10, 2000 when GM sold its majority shares on Ovonic to Chevron Texaco . Later on Energy Conversion Devices Incorporated (the new name of Ovonic after merger) filed a suit against other automakers battery manufacturer for patent rights violations on the NiMH battery technology.
The settlement agreement forcing Toyota to pay 30 million USD and undisclosed agreement to another battery manufacturer. Eventually, Toyota’s electric car production line was closed down and the battery was not available on the market.
Bush administration involvement in the network was identified when the White House joined with GM and Daimler Chrysler to sue CARB. The lawsuit argued that the ZEV mandate violates federal laws. However it was not clear the reason behind Bush Administration involvement in the network .
Many speculations raised regarding the White House involvement, but it's already well known there was a close link between the Bush administration and the oil companies. According to Center for Responsive politics, the oil and gas industries contributed more than $83m to the Republicans since George W. Bush was elected. Another report from California Interest Public Research Group revealed that oil companies and automakers spent $24m from 1990 to 1994 to lobby California officials . (LARRUE, 2003)
The role of environmental association was clear as a supporter for the mandate. Forceful environmental groups and lobbies such as the Sierra Club, the Calstart consortium and the Planning and Conservation League Foundation put a lot of tension on the Californian Air Resource Board in order to make sure the mandate would not fail.
The Policy game
The policy game is understood as interaction between multiple interests of multiple stakeholders or actors as players in the game, bargain and negotiation of their own. Good policy should be born from a subset of common interest. The policy game is a dynamic process where every actor takes their position to bargain and win their interests as a consensus among other players or actors. Along the process, each actor may change their strategies and change their bargains according to other actor position. As quoted from Erick Hans Klijn 1995, p. 439 :
Strategies change and adjustment are depend on the resources of each actor has to form an alliance, opposition or make their own position independent of other actors. However only a few players involved in the game (Erik Hans Klijn, 1995) , the role player most likely are the leading corporate which dominate the existing market to shape the policy, rule and regulation according to their own objectives and interests.
The ZEV mandate policy network clearly shows the interest group involved in the network. The various networks arose around the zero emission regulation issue. However, those networks seemingly divided into ‘pros’ and ‘cons’ to the regulation determined by their chosen strategies.
The policy game started when automakers and oil companies formed allies to lobby CARB officials. The lobby succeeded in reducing the number of zero emission vehicle from the previous scheme.
On the technology side, it can be easily seen that the battery is the vital part of the electric vehicle as well as combustion engine in conventional cars. This seemingly as the aim of GM strategy to buy majority shares of Ovonic and then sold it to Chevron Texaco,
The next strategy was to sue another battery manufacturer for patent rights violation. Consecutively the final step was formed allies with the Bush administration to sue CARB.
Conclusion
The failure of the ZEV mandate provides valuable insights about how a public policy may fail. Several issues can be addressed from policy network management theory and its limitation.
Government is not a single actor to shape and to enforce a policy particularly in a democratic government. Government acts as a facilitator to the society rather than as a ruler. However this could be problematic, giving more space to accommodate to the dominant network in term of capital and power could endanger the weak society.
The government should have ability to manage the balance, otherwise there will be no innovation and changes could be achieved since dominant network tends to avoid changes and maintain their domination. For this dominant network, accepting changes may lead to risk that endangered their domination.
This phenomena comply with the policy game theory, which nevertheless only involves a few but powerful players . This powerful players may mobilize and controlling important resources so they have a strong position to influence and defend their own interest become a legal rule and regulation. Thus it is important for the government to identify the characteristics the interest groups and managing the potential conflict between them.
Relatively cheap oil is not the only reason for disabling transition to sustainable electric vehicle particularly for nowadays, but strong domination of oil companies and automakers in fossil fuel vehicle technologies seem likely to resist to change. Oil companies tend to maintain their long history of empire business wealth and capital accumulation. The transition to electric vehicle may obstruct their business of gasoline, lubricants and its derivatives, while for auto Cars Company shifting to electric vehicle will obstruct their fast moving spare parts and its supply chain business.
What policy networks may enable transition to sustainable electric is not an easy question to answer. The network management perspective gives insights about ‘win-win situations as one property required for a ‘good’ network management. But ‘win-win’ situation is not easy to achieve if the regulation will threaten the powerful interest group in the long run.
However, the policy network management has its own limitation. We learned that CARB as the network manager had limited resources at its disposal while taking a frontal position with the incumbent powerful player is not a good strategy. In such situation two strategies may propose, firstly is using win-win strategy. This strategy could be achieved if the regulation designed to be more flexible in numbers of the vehicle, deadline time and leave a door open for negotiation and evolution. Thus the interest groups will not perceive the regulation as a threat to their business. Secondly is encouraging new players to involve in the electric car development and leave the competition in the market.
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[1] Plug-in Electric Vehicle refers to electric vehicle powered by 100% electric sources of battery instead of combustion engines.
