A Look Inside the "Black Box"

In 2004, Ford's internal Climate Change Task Force faced a dilemma. After an extensive study, it was clear to the cross-functional group of senior executives that several forces were converging to fundamentally change vehicle markets, especially in North America and Europe. Current and anticipated climate change and fuel economy regulation, rising fuel prices and growing consumer awareness of the climate change issue all pointed to a shift in sales toward cars rather than trucks and toward smaller and more fuel-efficient vehicles. We needed to rapidly reorient our product offerings.

But what should drive new product goals? As a practical matter, the Company needed to be able to meet new regulatory mandates. Beyond that imperative, we had taken to heart our responsibility to contribute to meeting the challenge of climate change. So, Task Force members decided to base product planning on the goal of climate stabilization, and they asked Ford's in-house scientists to devise a way to test scenarios for meeting that goal.

In 2005, Ford's scientists began development of a CO2 model. To create it, they modified the Sustainable Mobility Project model (developed by the International Energy Agency) and combined it with global carbon-dioxide (CO2) emission-reduction pathways for varying levels of atmospheric CO2 stabilization (as described by the Model for the Assessment of Greenhouse-gas Induced Climate Change, developed by the National Center for Atmospheric Research). The scientists then calculated the CO2 emission reductions required of new light-duty vehicles up to the year 2050 for a range of CO2-stabilization levels and different regions of the world, using a simplifying assumption that the rates of CO2 emission reduction should be the same across all sectors.

At the lower CO2-stabilization levels, the required emission reductions are extremely challenging and cannot be accomplished using vehicle technology alone. Joint investigations with BP provided insight into how the best new vehicle technologies and low-carbon alternative fuels can jointly and realistically fulfill the low CO2-emission requirements. Ford's CO2 model and other modeling tools were combined to explore assumption sensitivities around vehicle technologies, baseline fuels, biofuels, costs and consumer response. The CO2 model is not intended to provide "the answer," but rather a range of possible vehicle and fuel solutions that contribute to a pathway to CO2 reductions, and eventually, climate stabilization. Our blueprint for sustainability – and the product actions it spells out – are based on options developed through this modeling exercise.

The model and its results have been a centerpiece of discussions with a variety of stakeholders. Below are some of the questions that have been raised through these discussions, and answers to them.

How does the model account for emissions growth or reduction in developing countries?

We recognize that developing countries generally have relatively low per capita energy use but high rates of emissions growth, reflecting growing economies. The CO2 model uses a science-based approach that allows for equitable growth in developing countries, to derive CO2 reduction targets for light-duty vehicles consistent with 450 parts per million (ppm) to 550 ppm CO2 stabilization pathways.

Since fuel use is the dominant cause of CO2 emissions, how does the model account for projected changes in the carbon footprint of automotive fuels?

Ford has studied multiple scenarios in which the auto industry and the energy industry work together to reduce overall well-to-wheels CO2 emissions from the light-duty transportation sector. These joint-strategy scenarios (see figure below) allow us to develop a least-cost vehicle technology roadmap. For the carbon footprint of fuels, we rely on the well-to-tank CO2 emissions for different alternative fuels estimated by different region-based models, including the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model for North America, and the EUCAR/JRC/CONCAWE analysis for Europe.

Are you continuing to test alternative scenarios?

In the long run, the roles of consumers, governments and fuel availability will be pivotal in dictating actual CO2 emission reductions, and Ford continues to take them into consideration in fine-tuning a truly viable and sustainable CO2 stabilization pathway.

How does the model consider the cost of technologies and alternative fuels?

The costs of technologies and alternative fuels that are not yet in the market are separately estimated. These estimates obviously have large uncertainties, but are useful for planning purposes. Ford has other models that look into potential market response to fuel/vehicle cost variations.

In a separate study, Ford has developed a model that looks into minimal-cost scenarios across different sectors and explores assumption sensitivities around vehicle technologies, fuel technologies, connections between the different energy sectors, and biofuels. The model provides information on the combinations of options that will yield the required emissions reductions at an affordable cost. We have used this model to develop scenarios to assess the global lowest-cost vehicle and fuel technology solutions consistent with CO2 stabilization.