Regulator credibility

GM and Ford invested heavily in R&D and equipment installation for technologies to reduce emissions of hydrocarbons, carbon monoxide and nitrous oxides, eventually leading to production fo the automotive catalytic converter in 1975 and the three-way catalysts in 1981. Important in this respect, however, is regulator credibility, without which environmental legislation is unlikely to be effective. For example Gerard and Lave (2005) suggest that Chrysler may not have responded to the Clean Air Act by investing in R&D due to their belief that regulators would not enforce the Act (since Congress had constrained the Environmental Protection Agency’s administrative options).

Page 237 Kohler, Whitmarsh, Michie and OughtoninFoxon, T, Kohler, J. and Oughton, C. (2008) Innovation For A Low Carbon Economy Economic, Institutional and Management Approaches Cheltenham: Edward Elgar

aka “come on if you think you are hard enough”

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