Eco-friendly vehicles are all the rage these days as consumers become more environmentally conscious. Nearly every vehicle model now has or will have a hybrid version but how eco-friendly are these vehicles? Sure the vehicle itself doesn’t emit much emissions nor consume additional fossil fuels, but they simply adopt another form not easily seen by your regular consumer. Norway conducted a study on global warming potential of the lifecycle of electric vehicles and showed an improved of 24% over gasoline powered vehicles and 10-14% over diesel, but depending on the energy source those numbers dwindle to 12% over gasoline and on par with diesel. Surely thoughts of an eco-friendly vehicle do not include diesel powered vehicles. A classic example of externalities.

As the sustainable movement tries elevate itself to becoming the standard every stakeholder is being held more accountable. More importantly businesses are becoming more conscious of their externalities and trying to identify ways of internalizing them yet all is lost upon consumers. A regular consumer might be conscious of the issue but rarely research beyond their criteria during the purchase decision, and they aren’t expected to. Labeling thus becomes the medium of communicating to consumers the externalities of their purchase. While there are many highly reputable labels that promote sustainability the automobile industry does not. The only credible label consumers can rely on is the estimated mileage information. These labels would clearly indicate how green these hybrids and electric vehicles are but they cannot illustrate the entire picture. Along with the mixture of messages from the manufacturers on how environmentally friendly their products are consumers would be hard pressed to provide the contrary.

The solution to better informing consumers would require new standards to be established that specifically directed towards them. Governments may have many policies in place to uphold environmental standards but they’re not easily accessible to consumers. Either the government or the industry needs to define what an eco-friendly vehicle is and be held accountable to those claims. If sustainability is subject to consumer choices then the consumer ought to provided with the information to make those choices. The auto industry have made strides to become more environmentally conscious but misguiding consumers only hurts the process.

Sources:

Don’t Look So Smug: Your Tesla Might Be Worse for the Environment Than a Gas Car